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Take this test to see if an employee qualifies for the Employment Tax Incentive

by , 26 February 2016
The Employment Tax Incentive (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.

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

To see if an employee qualifies for the Employment Tax Incentive, you should be able to answer 'yes' to these 8 questions...

Question#1:
 
Is the employee a natural person?
 
Companies, close corporations, trusts, labour brokers and personal services companies don't qualify.
 
Quesiton#2:
 
Is the employee a South African citizen?
 
Or is the employee in possession of a valid asylum-seeking permit?
 
Question#3:
 
Is the employee older than 18 years, but younger than 29 years at the end of the month which you're claiming the ETI?
 
If the employee is turning 29 during the month, then he'll no longer qualify.
 
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**********************
 
 
Question#4:
 
 Is the employee an UNCONNECTED person with regard to your business?
 
In other words, is the employee, for example, a family member irrespective of whether the relation is direct or indirect?
 
Question#5:

Is the employee something other than a domestic worker?

You see, domestic workers are specifically excluded from qualifying here.

This includes maids, gardeners, household drivers, au pairs and caretakers.
 
Question#6:

Is the employee employed for the first time after the 1st of October 2013?

The employee MUST be a first-time employee.

This means that you must NEVER had employed the person, NOT EVEN as a casual employee!

If, for example, the employee was employed 5 years ago, and you re-employ her, then she won't qualify.

If you can answer 'yes' to all of these questions, including the other 2 questions… then the employee will qualify for the Employment Tax Incentive.

*To find out what the other 2 questions are, simply page over to chapter E 06 in your Practical Tax Loose Leaf Service handbook, otherwise click here to order yours today. 


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