Employment tax incentive (ETI)

The Employment tax incentive came into effect on 1 January 2014. The aim of this incentive is to encourage employers, who are registered for PAYE, to hire young workers and give them work experience over the medium term. This incentive will apply to staff members, excluding domestics and related employees, with valid South African ID documents aged between 18 and 29 years old that were hired on/after 1 October 2013 and earn between R2000 – R6 000 per month. The employees will only be eligible to claim the incentive for 24 months while they fall into the age bracket, the months do not need to be consecutive. The incentive will be calculated according to their monthly salary and will half in the last 12 months that they are eligible. Employers must be up to date on all their taxes to be able to claim and can be penalised if the incentive is exploited or abused. There is a full summary and an example of the incentive available on our website; alternatively you can contact Christel (christel@acsaccounting.co.za) for information.