FAQ: Will an employer qualify for a refund; should their Employment Tax Incentive (ETI) be more than their Pay-As-You-Earn (PAYE) liability?
Yes, employers will qualify for a refund if their ETI is more than their PAYE liability but certain requirements must be met. See more information on the ETI refund process.
FAQ: How does an employer determine the “monthly remuneration” of an employee who qualifies?
The “monthly remuneration” of an employee who qualifies is the amount paid or payable for that full month. Where an employee has only been employed for part of a month, the “monthly remuneration” is calculated as the amount that would have been payable if the employee has been employed for the full moth.
FAQ: Must an employer pay the minimum wage to be entitled to the Employment Tax Incentive (ETI)?
Yes, an employer will be entitled to the ETI, provided at least the minimum prescribed wage for the relevant sector is paid or if a minimum wage doesn’t apply, is paid a wage not less than R2 000 to R6 000 where the employee has been employed for at least 160 hours in the month.
FAQ: What is an associated person?
An associated person is any entity in relation to each other which is directly or indirectly managed or controlled by substantially the same person (e.g. two subsidiaries under a holding company). Top Tip: Where an employee moves between companies (who are part of a group) with the same PAYE reference number, for ETI purposes this […]
FAQ: How will the Employment Tax Incentive (ETI) affect current learnership agreements and the internships process?
If an employer meets all the necessary requirements, the employer is entitled to claim the ETI, the learnership allowance and the internship process remains unaffected.
FAQ: Why can’t an employer back-date the Employment Tax Incentive (ETI) claim to October 2013?
The ETI became effective 1 January 2014, and an employer is only eligible to receive the ETI from this date. However, back-dated ETI may only be claimed for a maximum of 6 months which falls within a 6 months employer reconciliation period (EMP501), provided it is claimed under the ETI Calculated amount on a current […]
FAQ: How will I determine an employee’s age for Employment Tax Incentive (ETI) purposes?
An employee’s age must be determined at the end of each month for which the employer is claiming the ETI. Therefore an employee will start to qualify in the month that they turn 18 and will end in the month prior to the month in which they turn 30, e.g. if the employee’s month of […]
FAQ: Will the Employment Tax Incentive (ETI) also be applicable to seasonal employees (i.e. 6 or 8 months) and/or fixed term contract employees?
The Act does not exclude them as long as they meet the requirements as an employee who qualifies, i.e. Has a valid South African ID Is 18 to 29 years old (please note that the age limit is not applicable if the employee renders services inside a special economic zone (SEZ) to an employer that […]
FAQ: How does the roll-over of the Employment Tax Incentive (ETI) work?
An incentive amount may be rolled over – If the incentive amount available exceeds Employees’ Tax due in a month. The excess may be carried forward to the next month If the employer does not reduce the PAYE by the ETI, despite the ETI being available to that employer and If the ETI was not […]
FAQ: When will an employer not be allowed to claim the Employment Tax Incentive (ETI) in a specific month?
An employer can’t claim the ETI (i.e. reduce their PAYE (Employees’ Tax) liability) if on the last day of the month, the employer- Has failed to submit any return/declaration Has any tax debt outstanding, excluding a tax debt – o Where an agreement has been made for a deferral payment o That has been suspended pending an […]
