​ETI VALIDATION RULES

Some employers may experience Employment Tax Incentive (ETI) validation errors when submitting their Employer Reconciliation Declaration (EMP501) to SARS. We have provided guidance further down on how to resolve the validation errors.  


How to resolve ETI validation errors?

In terms of ETI Act, the following rules are validated by SARS on receipt of the EMP501 reconciliation:
 
  • Qualifying employees:

    • The employee is a natural person who works directly for another person and receives remuneration from that other person and must have a valid South African identity document, Refugee identity document or Asylum Seeker Permit.
    • The employee is between 18 and 30 years of age. This does not apply if the employee is employed in a Special Economic Zone (SEZ Code = Valid). Note: The age validation must take the month of birth into consideration, e.g. if the employee’s month of birth is April then the employer may only claim ETI from April going forward in the year the employee turns 18 and up to March in the year the employee turns 30.
    • The employee receives a monthly remuneration of less than R6000.

  • Qualifying period: The employee was employed on or after 1 October 2013.

  • Employer not subject to wage regulating measures: The employee’s wage must be at least R2000 per month.

  • Employer subject to wage regulating measures: The employee’s wage must not be less than the minimum wage prescribed by the relevant regulating measures.

  • The Monthly Calculated ETI amount per qualifying employee is within the prescribed legislated threshold:

    The monthly calculated ETI amount per qualifying employee is determined as follows, see the tables on the How does the ETI work webpage.


Need further help?

For more information concerning any aspect on the interpretation and administration of the employment tax incentive legislation, you may call the SARS Contact Centre on 0800 00 7277.

 

Last Updated: 12/09/2019 10:22 AM     print this page
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 Top FAQs

Why does my 2015 recon fail ETI now when it was submitted successfully in 2015?
SARS has not applied any ETI validations systematically prior to the August 2016 release. The validations that were introduced now applies to all tax years since the inception of ETI in 2014.

ETI validation reason - Monthly Minimum Wage is greater than the value in Monthly Remuneration?
The monthly minimum wage must be apportioned to the number of ETI hours. ETI may not be claimed if the employee is remunerated less than the monthly minimum wage.

ETI validation reason - If Minimum wage is 0 then Monthly Remuneration must be at least R2000?
ETI may not be claimed if the employee is remunerated less than R2000. The R2000 must be apportioned to the number of ETI hours and the value specified in the minimum monthly wage.

ETI validation reason - Monthly remuneration cannot be greater than R6000?
ETI may not be claimed if the employee is remunerated more than R6000. If no ETI is claimed, all the ETI fields for the month must be zero.

ETI validation reason - Amount utilised for the employee is not within the threshold?
ETI must be calculated as per the formula provided in the ETI guide. SARS Home > Legal Counsel > Legal Counsel Publications > Find a Guide > Guide to the employment tax incentive