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2 Employment Tax Incentive rules you must follow to avoid disqualification

by , 14 March 2016
Even though the Employment Incentive (ETI) Act gives clear guidelines for when an employer will be disqualified from an ETI, there is still something you should keep in mind...

SARS applies these rules monthly!

This means that even though you may qualify for the ETI in one month, you could just as easily be disqualified in the next month.

So if you're hoping to benefit from the ETI, make sure you follow these 2 critical rules in order to avoid a sudden and costly disqualification, or even a fine of as much as R30 000...


The Employment Tax Incentive Act can help you:

·         Legally claim a tax incentive when you hire temporary employees
·         Claim a tax incentive on learnerships
·         Manage the risks and penalties involved with the Employment Tax Incentive Act

Click here to find out how


You must pay to train and/or educate staff, for whom you claim the ETI for, as directed by the Minister of Finance.

At this stage, nothing has been published yet.

But to protect your business from being disqualified by this rule, you should regularly keep an eye out online, on the media and on SARS notifications to see if any new conditions have been published regarding ETI compliance.

Also ensure that your tax practitioner keeps herself updated with tax issues, and make sure that she lets you know about any new ETI conditions you must comply with.


Don't unfairly dismiss, or even retrench, existing staff and replace them with staff who'll qualify for the ETI.

Doing so will lead to an immediate disqualification by SARS.

If an employee you dismiss, for the above-mentioned reasons, happens to take you to the CCMA, you could risk disqualifying your entire
ETI claim for all of your qualifying employees.

If you do plan to dismiss or retrench someone whom you'll replace with an ETI-qualifying individual, ensure that you do so in accordance with labour law. And be very careful along the way, as complications can easily arise here.

Remember that SARS will keep a very close eye on you if you retrench staff for financial reasons, or downscale, and replace those staff members with ones who qualify for the ETI.
*Page over to chapter E 06 in your Practical Tax Loose Leaf Service handbook to learn more great advice on complying with the
Employment tax Incentive Act, or click here to order your copy today. 

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