Did you know that the Employment Tax Incentive (“ETI”) programme has been expanded to assist employers in the wake of the COVID-19 pandemic and the national lockdown?

This expansion has been introduced in order for tax compliant employers to improve the cash flow of their business, so that they may continue to maintain existing staff levels and pay salaries to their employees.

The expanded ETI programme, applicable to qualifying employers, will apply for the period 01 April 2020 – 31 July 2020 and may be summarised as follows:

The maximum incentive (previously R1,000.00 in the first qualifying twelve months and R500.00 in the second qualifying twelve months) that can be claimed per employee, has been increased by R500.00 per month for those private sector employees, between the ages of 18 and 29 years, earning below R6,500.00 per month.
The age group in terms of which the ETI incentives can be claimed has been temporarily expanded, in order to include all employees between the ages of 30 and 65 years earning below R6,500.00 per month, who now qualify, for the four month period, for an incentive of R500.00 per month.
Where the aggregate ETI amount available to the employer exceeds the employees’ tax withheld and due to SARS, SARS will make the refund monthly, as opposed to twice a year, as a means to assist the cashflow of tax compliant employers, as a matter of urgency, in order to assist their businesses.

Requirements to qualify are as follows:

The incentive applies to employers that were registered with SARS as at 1 March 2020.
The current compliance requirements for employers under of the ETI Act will continue to apply.

It should be noted that details regarding communications with SARS during the lockdown period are available on their website at www.sars.gov.za. You may also consult the Explanatory Notes on the COVID-19 Tax Measures published by National Treasury and SARS, for further information.

For the moment and at date of publication, this is the information we have obtained. We will keep you updated should any further relevant information come to our attention.

Although we have used our best efforts to ensure that all information contained in this communication is accurate as at the date hereof, we cannot guarantee the accuracy thereof and recommend verification thereof before use.