FAQ

All your questions answered below.

General

What is ETI?

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

Who benefits from the ETI?

The employer benefits from ETI.

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

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

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.

Claims

Which employees can I claim for?

Qualifying employees are between the ages of 18 and 29 who earn less than R6 500 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.

Criteria

Do special rules apply to Special Economic Zones?

There are no employee age restrictions in SEZ.

Is this BBBEE 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.

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.

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 as this is used in the formula to calculate ETI each month.

Payments

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.

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 or VAT payable on the cash received.

Deadline

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 and then again to February 2029.

Process

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.

Risk

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. We get paid when you get your ETI benefits.

Cost

How much will this cost me?

Our fees are success based. We get paid when you get your ETI benefits.


What Our Clients Say

 "Really professional and save me a lot of time to find and pinpoint where the problems are and what we claiming back from SARS.  They do all the work, and you sit back.  They would only require a backup of your payroll and will do all the work offsite.  They gave my results in less than a week. I’m impressed."

Marinda T. Brandt
Group Financial Manager
Shapiro Shaik Defries & Associates

 

Need ETI Advice?
Speak to our master tax practitioner on 083 675 8228