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Do you qualify for the Employment Tax Incentive? Find out here

by , 29 September 2015
The Employment Tax Incentive Act (ETI Act) came into effect for all payroll periods as of the 1st of January 2014.

The ETI Act is there to help you bear the cost of offering employment unemployed youth in South Africa. It is also referred to as the youth wage subsidy.

But you can only benefit from the ETI Act if you have positions in place that can be taken up by individuals who meet the criteria for the ETI Act.

If you and your employees qualify, then you can reduce your monthly PAYE payments to SARS.

So here is what you need to know as to who qualifies for the Employment Tax Incentive (ETI):


Legally pay less tax           

139 reasons SARS doesn't want you to see this
Your business will qualify for the ETI if you're registered, as an employer, for PAYE with SARS and you have been issued a PAYE number.
But there are three types of employers who are automatically disqualified from ETI. So take not. They are:
·         National, provincial or local government;

·         All public entities as listed in Schedule 2 or 3 of the Public Finance Management Act. This is unless the Minister of Finance allows otherwise.

·         A municipal body as per Section 1 of the Local Government Municipal Systems Act.
It would appear that private sectors are bound to benefit from the ETI Act. But be certain as there is still a chance you could be disqualified from ETI.
As was stated earlier, the ETI sets out to assist unemployed youth find jobs. Based on this fact, you can already begin to piece together what constitutes a 'qualifying employee'.
The ETI is determined as per employee as well as per month for that particular employee.
The ETI Act outlines what constitutes a qualifying employee in Section 6.
You can use the employee test to determine if they still qualify for ETI.

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