Partner Login | Training Login
Simple. Comprehensive. Affordable.

ETI a welcome opportunity for your business


HOME »
2014-06-16

ETIEmploymentTaxIncentiveSARS

We all embrace the opportunity to save our companies some money. The Employment Tax Initiative (ETI) has therefor been a welcome introduction for SMEs and much has been said and written about the topic in recent times.

The process seems simple enough:
ETI is done by means of a reduction in the employees’ tax that an employer must pay over to SARS every month. During the specified time frame, a qualifying employer identifies all qualifying employees in respect of each month, determine the monthly remuneration for each of these qualifying employees, and calculate the amount of the incentive per qualifying employee. The employer’s total employees’ tax liability for the month is simply reduced by the total ETI that the employer qualifies for during that month. The incentive is available per qualifying employee for a total period of 24 months and does not provide any benefits for the employee and does not appear on any employee documentation including the payslip.

The process and requirements are described very clearly by SARS at http://www.sars.gov.za/TaxTypes/PAYE/Pages/Employment-Tax-Incentive.aspx and calculations examples are provided at http://www.sars.gov.za/TaxTypes/PAYE/Pages/Employment-Tax-Incentive.aspx

But what are the practical implications for your company? Part of the answer is of course, more administration. SARS requires all participating employers to keep additional records of supporting data substantiating the ETI calculation in terms of each eligible employee.
The process can be significantly eased through the use of compliant automated payroll software where a monthly report of ETI calculations provide the necessary information. This should include the following:
• Employee Name
• Employee Number
• SA ID number or Asylum Seeker Permit
• Date of Birth
• Remuneration
• ETI claimed by month over the 36 month period

On a more positive note, it means you may qualify for a subsidy of up to R 1 000 per month per qualifying employee, for up to 24 months.
 

DESIGNED AND DEVELOPED BY DSI - ONLINE SOLUTIONS PROVIDER