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Employment Tax Incentive Guide (updated)
- 15 October 2024
- SARS Issues
- South African Accounting Academy
Summary:
SAICA has issued a newly updated Guide on the Employment Tax Incentive (ETI), which provides an overview of the employment tax incentive ‘benefits’ that are available to “eligible employers” and how an employer may qualify for these benefits.
Article:
This guide was originally published by SAICA in September 2021. This updated version of October 2024 contains numerous examples to better illustrate the ETI.
The employment tax incentive (ETI) was implemented during January 2014 and will cease on 28 February 2029.
The purpose of the incentive is to encourage employers to hire young and less experienced workers in order to assist in reducing unemployment in the country, as part of the National Development Plan, by reducing the Pay-As-You-Earn (PAYE) payable by qualifying employers, to SARS.
Contents of the updated Guide:
- Introduction
- Purpose, Scope and Limitations of the Guide
- Legislation
- Terminology
- Qualifying periods in relation to the allowance
- Calculation of monthly ETI
- Non-Compliance with Tax Obligations (Section 8, ETI Act)
- Roll-Over Provisions (Section 9, ETI Act)
- Reimbursement of ETI (Section 10, ETI Act)
- ETI Documentation to be retained for Verification purposes
- How to claim the ETI?
- Examples
The information contained in this guide is in terms of legislation as at 11 October 2024; i.e. the date of commencement of the Taxation Laws Amendment Act 18 of 2023.
However, this guide does not take into account any additional allowances made available as a result of the impact of the COVID-19 pandemic.
Click here to download the 18-page Guide:
Relevance to Auditors, Independent Reviewers & Accountants:
- Practitioners should adhere to the tax requirements of the ETI.
- Auditors, Independent Reviewers and Accountants should always be aware of the latest publications issued by regulators, professional bodies and standard-setting boards, such as SAICA, as well as the contents of any practical considerations contained within this guide.