South African Revenue Service issues draft guidance for Employment Tax Incentive South African Revenue Service issues draft guidance for Employment Tax Incentive

South African Revenue Service issues draft guidance for Employment Tax Incentive
29 Jan 2018

The South African Revenue Service (SARS) has released draft guidance intended to clarify the circumstances in which employees are eligible for the Employment Tax Incentive (ETI).

The ETI is designed to encourage employers to hire young workers by reducing the amount they have to remit to the government through the Pay-As-You-Earn system.

Workers must be between 18 and 29 years old, be employed and paid a wage of between ZAR2,000 (US$154) and ZAR6,000 (US$462) per month for working at least 160 hours. The scheme does not cover domestic workers nor those 'connected' with their employer.

But according to SARS, many employers have been uncertain as to whether the 160-hour working hours requirement relates to only ordinary hours of work or whether overtime could also be included. It has now clarified that overtime does not count and only 'ordinary hours of work' are covered.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

The South African Revenue Service (SARS) has released draft guidance intended to clarify the circumstances in which employees are eligible for the Employment Tax Incentive (ETI).

The ETI is designed to encourage employers to hire young workers by reducing the amount they have to remit to the government through the Pay-As-You-Earn system.

Workers must be between 18 and 29 years old, be employed and paid a wage of between ZAR2,000 (US$154) and ZAR6,000 (US$462) per month for working at least 160 hours. The scheme does not cover domestic workers nor those 'connected' with their employer.

But according to SARS, many employers have been uncertain as to whether the 160-hour working hours requirement relates to only ordinary hours of work or whether overtime could also be included. It has now clarified that overtime does not count and only 'ordinary hours of work' are covered.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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