What The New Employment Tax Incentive Limits Mean for Your Business

Admin
Image

During Finance Minister Enoch Godongwana’s 2022 Budget Speech, a substantial 50% increase in the limits for the Employment Tax Incentive (ETI) was announced, effective from 1 March 2022. This will increase the amount of tax relief employers can claim when employing young people.


ETI fast facts

  • An incentive encouraging employers to hire young work seekers aged between 18 and 29 years.

  • Reduces the employer’s cost of hiring young people through a cost-sharing mechanism with government.

  • Can be claimed for a 24 month period for all employees who qualify.

  • Came into effect on 1 January 2014 and will end on 28 February 2029.

  • ETI is claimed by reducing the amount of Pay-As-You-Earn (PAYE) due by the company, leaving the wage received by the employee unaffected.

 

As the monthly remuneration increases, the amount of the rebate reduces: at the upper limit with a monthly remuneration of R6 400, the monthly rebate is R750.

Even so, especially for companies with many employees, these rebates will add up on a monthly basis, and stack up over two years. There is no limit to the number of qualifying employees that you can hire.

Read more here

Image
Get in touch
Get more information on our services by contacting us.

Chat To Us