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What is the Employment Tax Incentive (ETI)?

Tuesday, 24 January 2017   (0 Comments)
Posted by: Debbie Botha
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This is an incentive offered to employers to hire young work seekers thereby increasing the employment of youth in South Africa.

The benefits of the incentive are to reduce the employers cost of hiring young people through a cost-sharing mechanism with government by allowing you to reduce the amount of Pay-As-You-Earn (PAYE) you pay while leaving the wage received by the employee unaffected.  The benefits are substantial and members are encouraged to visit the SARS website or SARS Contact Centre for additional information.

Employers are able to claim the incentive for a 24-month period for all employees that qualify in the age category of 18 to 29 years old.


Members may be aware that the Employment Tax Incentive expired in 2016 and that negotiations took place at NEDLAC around possible changes to the scheme in the new period.  BUSA and BBC were instrumental in driving these discussions in particular ensuring that calls from organised labour to exclude ‘labour brokers’ from accessing the scheme and proposed caps on claims, made by Treasury, were addressed.

APSO participated in research conducted by BUSA that framed the business position during these negotiations.

The President signed the extension of the ETI as part of a suite of amendments in January 2017. The ETI remains unchanged and valid for a further two years until the end of 2018.

APSO would like to extend our thanks to the CAPES team for their diligent and determined efforts in these negotiations through their participation at BUSA and the BBC, which has ensured that our members are able to utilise the benefit offered by the ETI.

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