Who qualifies for the ETI?
Qualifying employees: The employee is a natural person who works directly for another person and receives remuneration from that other person and must have a valid South African identity document, Refugee identity document or Asylum Seeker Permit. The employee is between 18 and 30 years of age.
What is ETI and how does it work?
WHAT IS ETI? ETI is a tax concession made to encourage employers to hire young people with no work experience. The employer may claim the ETI from the South African Revenue Service (SARS) by reducing the amount to be paid over in terms of PAYE by the total ETI calculated on the basis of qualifying employees.
Who benefits from ETI?
The benefits of the ETI are: It will 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.
What is included in ETI remuneration?
The monthly calculated ETI amount per qualifying employee is determined as follows: For the first twelve months of employment –…Determination of the Employment Tax Incentive.
| Monthly Remuneration | Determination | Monthly Calculated ETI Amount |
|---|---|---|
| R2000 – R4499 | Fixed at R 500 | R500 |
What is ETI in accounting?
EMPLOYMENT TAX INCENTIVE (ETI) – On Accounting.
How far back can I claim ETI?
24 months
The ETI is calculated per employee per month using a SARS formula and can be claimed for a maximum of 24 months for any one employee.
Are ETI refunds taxable?
It follows that the benefit enjoyed in the form of the above employment tax incentive is exempt from income tax, and will be accounted for as income in the accounting records of the employer.
What is ETI in tax?
The extraterritorial income (ETI) regime was enacted in 2000 to provide domestic taxpayers with special tax benefits for certain export-related income. At the time, many taxpayers assumed that ETI benefits were also discontinued for all income recognized after 2006.
Is Eti an income?
There is no obligation to claim ETI. Therefore, one can choose to simply ignore ETI. If, however, ETI is claimed, it will constitute tax-free income for the qualifying employer claiming it, however, employers are cautioned as to the slightly heavier compliance burden placed upon them.
What is ETI refund?
Employers may be refunded the amount of the allowable ETI that wasn’t used to reduce the employees’ tax amount payable at the end of each six month reconciliation period (1 March to 31 August and 1 September to 28/29 February). An ETI refund will only be paid if an employer is tax compliant.
How much must you earn to pay tax in South Africa?
R83 100 if you are younger than 65 years. If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) is R128 650. For taxpayers aged 75 years and older, this threshold is R143 850.