Paymaster Magazine

Employment Tax incentive Bill (VIDEO)

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The draft Employment Tax Incentive Bill was published on 20 September 2013 and a revised Bill was published on 24 October 2013. The Bill proposes an incentive to employers to employ young employees due to the high unemployment rates amongst the youth. An amount can be deducted from the total PAYE amount in respect of each qualifying employee that is employed. In other words, the employer will reduce the total PAYE liability of the month with the incentive amount. This amount will be available to employers to encourage employment creation. It will, however,
not affect the employee in any way.

Qualifying employees are defined as employees with a South African ID card, who are between the ages of 18 and 29 years and 11 months and who were employed by the employer on or after 1 October 2013.

The employee will only be a qualifying employee if the employee earns more than the minimum wage (according to the sectoral determination or the bargaining council) and earns less than or equal to R6 000 per month. If the employee is not affiliated to a bargaining council or sectoral determination, the employee should earn at least R2 000 per month to be a qualifying employee.

The incentive amounts for each qualifying employee will be as follows:




Employment tax incentive per month during the first 12 months of employment

of the qualifying employee

Employment tax incentive per month during the next 12 months of employment

of the qualifying employee

R0 – R2 000 50% of monthly remuneration 25% of monthly remuneration
R2 000 – R4 000 1000 500
R4 000 – R6 000 Formula: R1 000 – (0.5x (monthly remuneration -R4 000)) Formula: R500 – (0.25x (monthly remuneration -R4 000))


  • Monthly Employer Declaration (EMP201)
  • Employer Reconciliation Declaration (EMP501)

The effective date is January 2014. The new EMP201 for the Month of January 2014 that is payable 07/02/2014 has been changed to the new layout.


Employment Tax Incentive (ETi) PAYE Overview:

Impact on Paymaster online – currently in development:

The ETi calculations and qualifying employees will be determined by Paymaster on line.

The new EMP201 will be revised for January 2013

The declaration process/requirements for the yearend 2014 IRP5’s will be revised as per the Business Requirement Specification document released by SARS.


Adrian Baillie-Stewart

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