THE Employment Tax Incentive (ETI) calculations explained

Top Tip: Before you get started, make sure you are a qualifying employer.

Formulas are sometimes difficult to understand so we have step-by-step examples and a handy ETI calculator. The examples and the ETI calculator are intended to help you work out your incentive amount which may be claimed.

Important: The value of the ETI amount the employer may claim depends on the value of the monthly remuneration paid to the qualifying employee. If the employee was employed less than 160 hours in the month, the remuneration must be ‘grossed up’ to 160 hours per month to determine the full remuneration as if the employee was employed for the full month. Determine ETI amount by using this full remuneration.  Once the ETI amount is determined, this amount must be ‘grossed down’ to determine the portion that the employer can claim in proportion with the actual hours the employee was employed. See more information here.

 
Employment Tax Incentive per month during the first 12 months of employment of the qualifying employee


Number of hours for which qualifying employee was employed in this month
Total remuneration paid/payable to qualifying employee for this month
Full Monthly Remuneration
 
ETI Amount employer can utilise in the month
 


Employment Tax Incentive per month during the next 12 months of employment of the qualifying employee​

Number of hours for which qualifying employee was employed for this month
Total remuneration paid/payable to qualifying employee for this month
Full Monthly Remuneration
 
ETI Amount employer can utilise in the month
 

 
We draw your attention to the following:
 
  • Disclaimer:
    What is contained in this calculator is intended as a guide only and is not considered to be a legal reference nor is it a binding ruling. The calculator does not take the place of legislation and readers who are in doubt regarding any aspect of the information displayed in the questionnaire should refer to the relevant legislation, or seek a formal opinion from a suitably qualified individual.
  • More information
    • Contact your own tax advisor/tax practitioner
    • If calling from within South Africa, contact the SARS Contact Centre on 0800 00 SARS (7277)
    • If calling from outside South Africa, contact the SARS Contact Centre on +27 11 602 2093 (only between 8am and 4pm South African time)
      Visit your nearest SARS branch
  • It remains the responsibility of the employer to ensure the information provided, when using the ETI calculator, is accurate and the requirements are met for the employer and the employees to qualify.
  • The result provided, using the ETI calculator, is what may be claim for one employee only who qualifies.
 

Monthly Remuneration ​ ETI per month during the first 12 months of employment of the qualifying employee ​ ETI per month during the next 12 months of employment of the qualifying employee​
R 0 - R2 000 ​ ​50% of Monthly Remuneration ​25% of Monthly Remuneration
 
You have 3 employees, who qualify, each earning R2 000 a month. They have been employed from 1 October 2013.

Top Tip: Remember follow the 4 simple steps to calculate you ETI.
  1. Identify all qualifying employees for the month - 3 employees
  2. Work out the applicable employment period for each qualifying employee - Within the first 12 months of the ETI programme
  3. Then work out each employee’s “monthly remuneration” - R2 000 per month per qualifying employee
  4. Calculate the amount of the incentive per qualifying employee according to the calculation.
The amount which may be claimed on the EMP201 is:
Monthly Remuneration ​ ETI per month during the first 12 months of employment of the qualifying employee ​ Amount which may be claimed on the EMP201
R2 000 per employee
​50% of Monthly Remuneration
50% X R2 000 = R1 000 per employee
​R1 000 per employee X 3 employees who qualify =
R3 000 per month

From the 13th month of employment, the incentive amount will be calculated as:
Monthly Remuneration ​ ETI per month during the next 12 months of employment of the qualifying employee ​ Amount which may be claimed on the EMP201
R2 000 per employee
​25% of Monthly Remuneration
 
25% X R2 000 = R500 per employee
​R500 per employee X 3 employees who qualify =
R1 500 per month
 

 

Need help?

Call the SARS Contact Centre on 0800 00 SARS (7277), or visit your nearest SARS branch.

Last Updated: 07/10/2016 9:01 AM     print this page