Employment Tax Incentive (ETI)

Transcription

1 ETI 2017

2 Employment Tax Incentive (ETI) The ETI is an incentive aimed at encouraging employers to hire young work seekers. It was implemented with effect from 1 January 2014 The aim of this incentive was to increase the overall employment and the level of job experience for youth. Eligible workers are aged between 18 and 29 and earn above the minimum wages between R2 000 to R6 000 per month. Changes: Ø Continuation of the ETI until 28 February Ø Introduction of an annual cap of R20 million on the claim allowed to each employer.

3 employer Is not in the national, provincial or local sphere of government Who Qualifies The employer is eligible to claim the ETI if the Is not a public entity listed in Schedule 2 or 3 of the Public Finance Management Act Is registered for Employees Tax (PAYE), or must be eligible to register for PAYE Is not a municipal entity Is not disqualified by the Minister of Finance due to the displacement of an employee or by not meeting the conditions as may be prescribed by the Minister by regulation.

4 How do I determine who is a qualifying employee? An individual is a qualifying employee if he or she Has a valid South African ID, Asylum Seeker permit or an ID issued in terms of the Refugee Act Is 18 to 29 years old (please note that the age limit is not applicable if the employee renders services mainly inside a special economic zone (SEZ) to an employer that is operating inside the SEZ, or if the employee is employed by an employer that operates in an industry designated by the Minister of Finance) Is not a domestic worker Is not a connected person to the employer

5 How do I determine who is a qualifying employee? Was employed by the employer or an associated person to the employer on or after 1 October 2013 and Is paid the minimum wage applicable to that employer or if a minimum wage doesn't apply, is paid a wage of at least R2 000 (where the qualifying employee was employed for 160 hours in a month) and not more than R Important: The value of the ETI the employer may claim depends on the value of the monthly remuneration paid to the qualifying employee. If the employee has worked less than 160 hours in the month, the remuneration amount must be grossed up to 160 hours per month to calculate the value of the ETI. The amount can then be calculated and be grossed down in the same ratio.

6 The benefits of the ETI It will reduce the employers cost of hiring young people through a costsharing 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 Employers will be able to claim the incentive for a 24 month period for all employees who qualify. The incentive amount differs based on the salary paid to each qualifying employee and whether the qualifying employee was employed during the first 12 months or second 12 months of the ETI programme. This incentive will complement existing government programme with similar objectives e.g. learnership agreements.

7 Example 1 - Employees who earn between R0 - R2 000 Identify all qualifying employees for the month - 3 employees Work out the applicable employment period for each qualifying employee - Within the first 12 months of the ETI programme Then work out each employee s monthly remuneration - R2 000 per month per qualifying employee Calculate the amount of the incentive per qualifying employee according to the calculation. The amount which may be claimed on the EMP201 is: Monthly Remuneration Remuneration ETI per month during the first 12 months of employment of the qualifying employee ETI per month during the next 12 months of employment of the qualifying employee R 0 - R % of Monthly Remuneration 25% of Monthly Remuneration

8 Example 1 - Employees who earn between R0 - R2 000 continue The amount which may be claimed on the EMP201 is: From the 13th month of employment, the incentive amount will be calculated as: Monthly Remuneration ETI per month during the next 12 months of employment of the qualifying employee R2 000 per employee 25% of Monthly Remuneration 25% X R2 000 = R500 per employee Amount which may be claimed on the EMP201 R500 per employee X 3 employees who qualify = R1 500 per month

9 Employer Enhancements August 2017 Employer Interim Reconciliation: 15 September and run to 31 October 2017

10 Overview: Last Season Recap Reconciliation Process has not changed Employee database management - Active and Inactive status - Bulk printingof IRP5/IT3(a) certificates Audit Functionality Added - Action centre to manage audit letters

11 Overview: Last Season Recap Audit result not included in certificates Tax paid by employer on behalf of employees efiling Reconciliation process Import a CSV file Inclusion of code 4582 to align with retirement reforms Release notesavailable online Please visit the SARS website for additional documentation and guides.

12 Overview: August Enhancements New employer version: Addition of New Fields and Source codes to align with ETI Employee Demographic information Enhancements to the EMP501 Introduction of validation on ETI efiling authentication enhanced

13 set up file can be downloaded from efiling

14 Select Download for Windows Option

15 Always accept updates- Latest version

16 Employee Demographic information

17 Employee Demographic information

18 Employee Demographic information

19 Employee Demographic information

20 Addition of Fields and Source codes

21 ETI screen (Before 2018 YOA)

22 ETI Validations

23 Enhancements to the EMP501

24 Enhancements to the EMP501

25 EMP501 - Offline

26 EMP check

27 EMP 501 SARS/Own data

28 EMP Status

29 EMP 501 Pre-submit

30 EMP 501 Online check

31 efiling authentication enhanced

32 Enhancements to the EMP501

33 General efiling and Questions?