Here's how employers will benefit from the Employment Tax Incentive Act
President Jacob Zuma signed the Employment Tax Incentive Bill into law in December last year.
The Act, which encourages private employers through tax incentives to create job opportunities for young people aged from 18 to 29, officially came into effect in January this year.
While the benefits for young people (potential employees) have been well highlighted, the benefits for employers haven't been well highlighted.
If you don't have enough clarity on this, we've got you covered.
The Employment Tax Incentive Act can help you:
Employment Tax Incentive Act: Here are the four benefits for employers
SARS says the benefits of the Employment Tax Incentive Act are as follows:
#1: It'll reduce your cost of hiring young people through a cost-sharing mechanism with government, by allowing you to reduce the amount of Pay-As-You-Earn (PAYE) you pay while leaving the wage received by the employee unaffected.
For example, employers who are registered for PAYE and who employ a person for the full month of February 2014 and earns R2000, will get R1 000 off their monthly PAYE liability (provided that the employee is a qualifying employee based on all the other remaining requirements). Click here to find out about qualifying employees.
#2: You'll be able to claim the incentive for a 24 month period for all employees who qualify.
#3: The incentive amount differs based on the salary paid to each qualifying employee and whether the qualifying employee was employed during the first 12 months or second 12 months of the Employment Tax Incentive programme.
#4: This incentive will complement existing government programmes with similar objectives, for example, learnership agreements.
Now that you know about the benefits of the Employment Tax Incentive Act, click here to find out if the Employment Tax Incentive Act applies to you.