Earlier this year, the Taxation Laws Amendment Act was officially promulgated. Most of it deals with niche technicalities that are of limited interest, so it never received much media attention. However, there was one provision in particular with widespread significance: the extension of the Employment Tax Incentive (ETI).
If you aren’t already aware, the ETI was launched several years ago to stimulate job creation. Any time you hire a new employee, you can claim a monthly PAYE rebate of up to R1,000 provided several qualifying criteria are satisfied. You can claim these rebates for the first two years of employment, although their value is halved for the second year.
The ETI was set to expire this year, but the Taxation Laws Amendment Act has extended it to 28 February 2029. Furthermore, the remuneration thresholds that determine the incentive value that you can claim have been increased, which means that more employees will qualify. For example, originally employees wouldn’t qualify if they earned more than R6,000 per month. However, that limit has now been increased to R6,500.
In my experience, the ETI is grossly under-utilised by SMEs, which is ironic because they stand to benefit from it the most. The addition of just one or two employees can make a dramatic difference to small business owners who are bogged down in low-value administrative or operational responsibilities. Think about how much more time you would have to grow your business if you could delegate that tedium.
If you aren’t yet taking advantage of the ETI, familiarise yourself with it today and check with your accountant whether there are any backdated incentives that you can still claim.
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