What is ETI?

  • ETI is a tax incentive by government to employ young people

Who benefits from the ETI?

  • ETI benefits the employer

So, what sets the ETI aside from all other incentives?

  1. There is no application process,
  2. It is a self-assessment system,
  3. You receive the benefit each month, there is no waiting,
  4. You need only pay the balance of your PAYE liability after deducting the credit

Which employees can I claim for?

  • Qualifying employees are between the ages of 18 and 29 and earn less than R6000 per month

How much can I claim for?

  • The claim is calculated using a SARS formula which is based on the number of qualifying employees. A maximum of R1 000 per employee per month can be claimed. Subsequently, if you had 10 qualifying employees your maximum claim would be R10 000 for that month.

Do special rules apply to Special Economic Zones?

  • There are no employee age restrictions in SEZ.

Is this BEEE specific?

  • There is no race, gender, BEE or training requirement in order to qualify.

What other qualifying criteria are there?

  • Employees must have one of the following: a green ID book, an asylum-seeking permit or a refugee identity document.

Are certain jobs excluded from claiming ETI?

  • Yes, independent contractors and domestic workers are excluded. As a result, ETI cannot be claimed for them

How do I get this money back from SARS?

  • Your claim amount is offset against your monthly PAYE, so you do not have to pay this amount over to SARS.

So how do I let SARS know that the reason I have not paid all the PAYE is because I have deducted ETI?

  • You include your ETI claim on your monthly EMP201 Form

What if the amount I am claiming is more than the PAYE?

  • If your company has an ETI claim that is greater than the calculated PAYE, your company will receive a cash refund every six months via EFT into its bank account, tax free.

Will I pay TAX or VAT on the credit or “cash back” I receive?

  • No tax payable on the cash received.

How frequently will I receive cash back?

  • Every month if you have qualifying employees

Can I claim ETI even if our company has outstanding taxes owing to SARS?

  • No, you must be tax compliant i.e. have no outstanding tax returns or debt with SARS to claim ETI

Do learnerships qualify for ETI?

  • Yes, they do, as long as the learnership employees meet the qualifying criteria.

What do I do if an employee doesn't qualify each month?

  • Only the months in which the employee qualifies are taken into account.

Will the Employment Tax Incentive (ETI) also be applicable to seasonal employees?

  • Yes, seasonal employees qualify for ETI

I heard that ETI ended December 2016. Is that correct?

  • It was supposed to end in December 2016, but it has been extended to 28 February 2019.

This sounds really complicated. Can you help me to do these claims?

  • Yes, we can do the back claims and the ongoing monthly claiming for you.

What do you need from us in order to check that we are not underclaiming?

  • We would like to meet with your team and look at either your EMP501 or payroll information. You do not have to worry about sharing this information with us, as Gareth, the owner of the company who works with this information, is a Master Tax Practitioner. We will also sign an NDA at this initial meeting.

What are the catches?

  • As with any incentive the concept is simple but the administration and legislation is intricate. The system required to manage this is needs to be compliant and is complicated. The application of relevant legislation is complex but this is why our service offering will mitigate all compliance risks.

How much will this cost me?

  • Our fees are success based. Simply put we get paid when you get your ETI benefits.

Why are the number of qualifying employees I have relevant, the benefit is for the employer not them?

  • The number of qualifying employees are important since as this is used in the formula to calculate ETI each month.


Making a difference

The reason we help companies claim ETI is because we want to create opportunities for youth to find employment. If we can employ the youth, over 40% of whom are unemployed, we will make a significant difference in improving their lives and the state of the economy. Read more about ETI

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