Under certain circumstances, you may claim the Employment Tax Incentive (ETI) from SARS. More information about ETI can be found in the following section:
The ETI that can be claimed for a particular month, is available to be set off against the PAYE Liability, i.e. the amount of employees’ tax that you have deducted from employees during that month and have to pay over to SARS. The amount that is set off against the PAYE Liability for a particular month is referred to as the ETI Utilised on the EMP201.
ETI does not, however, appear on payslips; therefore, when the monthly posting of payroll information is done from Pay Runs (on the left-hand menu) on SimplePay to an accounting system such as Xero, the ETI Utilised will not yet be taken into account. For this reason, an additional posting from the Filing section might be required to post the ETI Utilised. The steps to do this are as follows:
Initial Posting of ETI Utilised
- Go to the Filing section and find the month for which you want to post the ETI Utilised.
- If the information in the PDF document is correct, click on Finalise next to the relevant EMP201 (if it has not been finalised yet).
- Once the EMP201 is finalised, you can click on Send ETI Utilised to Xero under the Accounting Info heading*.
- Check the information that will be posted to Xero and click on Post.
- Click Confirm.
- You can check the posting in Xero by clicking on View in Xero under Accounting Info.
*The first time you post ETI Utilised, you will be prompted to do the Submission Account Mappings. We would recommend the following mappings:
- Debit Employee Tax Payable / SARS Liability (in other words, the same account – but the opposite side – that you mapped Tax to as part of your Pay Run Account Mappings)
- Credit ETI Income (you might need to create such an account in Xero if you haven’t used it previously when doing manual journals) – this would be non-taxable for Income Tax purposes
If you would like to change the mappings for posting the ETI Utilised at any point after that, you could do so as follows:
- Go to Settings > Accounting System Integration > View / Change Submission Account Mappings.
- You will now be able to confirm and / or change the mappings for the posting of the ETI Utilised.
- Click Save.
Posting ETI Utilised Adjustments
The steps above will be sufficient in most cases. However, it could happen that changes need to be made to payslips after the usual month-end procedures including finalising and posting have been completed.
In cases where a new EMP201 is generated because of changes to payslips, you can follow the steps below to deal with ETI Utilised adjustments that might be required:
- Go to the Filing section and find the month for which you want to post ETI Utilised adjustments.
- If the information in the PDF document is correct, click on Finalise next to the relevant new EMP201 (if it has not been finalised yet).
- Once the new EMP201 is finalised, you can click on Send ETI Utilised adjustment to Xero under the Accounting Info heading.
- Check the information that will be posted to Xero and click on Post.
- Click Confirm.
- You can check the posting in Xero by clicking on View in Xero under Accounting Info.
If the ETI Utilised had been posted before a new EMP201 was generated, the posting of the ETI Utilised adjustments will result in the initial journal being voided in Xero and a new journal being posted, which contains the updated ETI Utilised amounts.
If the ETI Utilised had not been posted before a new EMP201 was generated, the posting of the ETI Utilised adjustments will simply result in the updated ETI Utilised amounts being posted to Xero.
Cutoff Date
By default, the posting of ETI Utilised (adjustments) will be available for all months that you have used SimplePay to do your monthly submissions. However, you might have already done manual journals regarding the ETI Utilised for the months before the SimplePay feature became available.
Therefore, in order to avoid duplication, you might want to set a “cutoff” date, which will be the month from when the ETI Utilised (adjustments) could be dealt with in the Filing section. If you set a cutoff date, it will not be possible to do ETI Utilised (adjustment) posts in the months prior to the cutoff month.
You can set up a cutoff date as follows:
- Go to Settings > Accounting System Integration > View / Change Submission Accounting Cutoff Date.
- From the drop-down menus next to Cutoff Date, you can then select the year and month that you would like to start using the system to do the posting with regards to ETI Utilised.