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TAX TALK

TAX TALK

Author: Natalie Wocke
Date: 2014-05-30
WHO CAN CLAIM THE YOUTH EMPLOYMENT TAX INCENTIVE?

The Youth ETI offers a real reduction in cash outflow for employing young people in our community. No limits on who they are, or what they do.admin staff, waitrons, cane cutters, crche assistants, sales staff, petrol pump attendants, delivery staff.as long as they are 18 to 29.

To claim the ETI, employers must be registered for PAYE, must be in a position to obtain a tax clearance certificate, and must employ qualifying employees.

Qualifying employees are any persons between the ages of 18 to 29, who commenced employment on or after 1 October 2013, in possession of a green ID book or card, not a connected person in relation to the employer, and not domestic workers. Interestingly, asylum seekers may also qualify.

The employee should earn between R2,000 and R6,000 per month, further subject to sectoral minimum prescribed wages (if applicable). In the event that the minimum wage is less than R2,000 - the employee will still be eligible.

The ETI is available for 3 years, commencing 01 January 2014. The claim per employee is limited to a 24 month period. The amount is based on a formula, applied to monthly remuneration.

The incentive can result in a reduction of PAYE by as much as R1, 000 per employee, per month. Mechanisms are also being put in place to allow a refund to be paid out, where the qualifying claims exceed PAYE payable.

Qualifying employers not compliant in a month, may roll forward the amount of the incentive claiming this in a later period when they are compliant, subject to generous limitations.

With such a generous incentive, there are obviously provisions to discourage abuse. An employer who claims the ETI when not eligible will be penalised, and there are provisions to prevent old employees being dismissed and re-employed to claim the ETI.

Could you benefit from this incentive, while providing much needed work experience to young people in our community?

For an analysis of your eligibility, call Roberts and Chaplin on 032 586 0387 or 032 947 1010.