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Can you benefit from the ETI if you've never paid PAYE?

by , 01 April 2015
The following topic debates the possibility of still benefiting from the employment tax incentive (ETI) in a situation when you don't pay PAYE. Sounds impossible? OIr is there a regulation that allows you to still benefit from it?

You're about to find out...


ETI and PAYE: What's the link


You should know that even if you don't pay SARS any PAYE as part of your monthly payroll (let's assume all your employees earn below the threshold), you can still benefit from ETI.

That means that SARS will reimburse you the total of your unclaimed ETI amount twice a year once you've submitted your 6-month and annual EMP501 reconciliations (Section 10 of the ETIAct).

Note that you are allowed to choose to keep the ETI rollover amount, instead of SARS reimbursing you. However, in the case where SARS reimburses your ETI rollover amount, you must subtract this amount from your ETI rollover balance.


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Here are some quick facts to keep in mind when dealing with the ETI:

• You can only receive an ETI claim for 24 months for each employee.

• Don't forget to include your ETI rollover amount when calculating your monthly ETI claim amount.

• Gross up remuneration for staff who don't work every working day of a month. Also keep in mind changes coming to the ETIAct early 2015 where this method moves away from "month" and "day" to hours.

• ETI currently runs until 1 January 2017, but will be reviewed at that date and either scrapped or extended.

• ETI can't result in negative PAYE. If it does, it means you have an amount you should be rolling over.

• If any employee changes employmentwithin the same group of companies (associated person), this will be deemed to be continuous employment.

We believe that the above information clarifies any possible misunderstanding regarding the context of benefiting from the ETI (under the previously mentioned circumstances).

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