ETI Changes to Remuneration Brackets

ETI is aimed at reducing youth unemployment by providing a tax incentive to employers who hire young workers aged 18 to 29. It was meant to end on 28 February 2019, with no further tax credits being granted. However, towards the end of 2018 it was confirmed that, due to the success of ETI, it would be extended until 2029.

As of 1 March 2019, the ETI remuneration brackets have also been amended to account for inflation. Employers must still pay employees who work 160 hours per month a minimum of R2 000 in order to claim ETI. However, the maximum that employees can earn and still qualify for ETI has now increased to R6 500 (from R6 000). As a result of this increase, the R2 001 – R4 000 bracket has also been amended. Employers can claim a R1 000 tax credit per month for the first 12 months for employees earning R2 000 to R4 500.

The new remuneration brackets are as follows:

Monthly
Remuneration
ETI monthly tax credit
in first 12 months
of employment
ETI monthly tax credit
in second 12 months
of employment
R2 001 – R4 500R1 000R500
R4 501 – R6 500R1 000 – [0.5 x
(Monthly Remuneration
– R4 500)]
R1 000 – [0.25 x
(Monthly Remuneration
– R4 500) ]

As always, we take the hassle out of payroll for you and have already updated the system to reflect these changes.

If you have any questions regarding ETI, read more on our help page here. Alternatively, contact our friendly support team.

Team SimplePay



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