EMPLOYMENT TAX INCENTIVE (ETI) EXPLAINED
SARS AT YOUR SERVICE
| Monthly RemunerationMin SIC Wage or R2000.00 | First 12 months of EE’s employment | Second 12 months of EE’s employment | |
| R1 to R2 000 | 50% or monthly remuneration | 25% of monthly remuneration | |
| R2 001 to R4 000 | R1 000 (fixed) | R500 (fixed) | |
| R4 001 to R6 000 | R1000 – (0.5 x (monthly remuneration – R4 000)) | R500 – (0.25 x (monthly remuneration – R4 000)) | |
| > R6 000 |
0 |
0 |
|
Example
For weekly employees:
• Total remuneration for the month (whether 4 or 5 weeks), check length of service and then use the
above table to calculate the ETI that could be claimed.
• EE earns R750-00 per week and is in their first year of employment
• Number of weeks in the month : 5
• Total earnings for the month : R750-00 x 5 = R3750.00
Using the above table check which bracket the total monthly earnings falls within (R2001 – R4000) this will give a fixed amount of R1000.00
If the same employee earned R1000.00 per week and there were 5 weeks in the month – total earnings for the month would be R5 000-00.
Calculation : R1000.00 – (0.5 x (R500.00- R4000)) : R1000.00 – (0.5 x R1000,00 =R500) = R500.00 (first year)
R500 – (0.25 x (R5000 – R4000)) : R500 – (0.25 x R1000,00 = R250) = R250.00 (second year)
Monthly employees: the salary for the month would apply.
Criteria for ETI
Employers are eligible when
• They are registered for the purpose of withholding and payment of employees tax
• They are not part of the Government of RSA
• They have not been disqualified from the Incentive by the Minister of Finance
• All their tax affairs are in order (PAYE, VAT and Company Taxes)
Employees qualify for this scheme if the employee
• Is not less than 18 years of age
• Not more than 29 years of age at the end of any month in respect of the month that the ETI is being claimed unless the employee is working in a SEZ (Special Economic Zone)
• Is employed by an employer in an industry designated by the Minister of Finance
• Is in possession of an ID document or an Asylum seeker permit
• In relation to the employer is not a connected person
• Is not a domestic worker
• Was employed by the employer on or after 1st October 2013
• Earns more than the minimum wage of his/her SIC. If no minimum wage defined then apply minimum wage of R2 000.00
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