Employment Tax Incentives – ETI Allowance

Monthly remuneration – When calculating the remuneration amount to be used for the ETI calculation, if the qualifying employee has been employed for:

  • 160 hours in the month, the actual remuneration amount paid must be used
  • Less than 160 hours in the month, the remuneration amount must be ‘grossed up’ to 160 hours per month to calculate the value of the ETI. The amount can then be calculated and be ‘grossed down’ in the same ratio.

Monthly Calculated ETI amount per qualifying employee is determined as follows:

Monthly Remuneration ​ ​Determination Monthly Calculated ETI Amount​
​R0 – R1999 50% x monthly remuneration ​R0 – R999.50
R2000 – R4499 ​Fixed at R1000 ​R1000
​R4500 – R6499 ​Formula: X = A – (B x (C – D))
X = monthly calculated amount
A = R1000
B = 0,5
C = Monthly Remuneration
D = R4500
​R 1000 – R0.50
​R6500 and more Nil R0.00

 For the second twelve months of employment:

​Monthly Remuneration ​Determination ​Monthly Calculated ETI Amount
R0 – R1999 ​25% x monthly remuneration ​R 0 – R499.75
​R2000 – R4499 ​Fixed at R 500 ​R500
R4500 – R6499 ​Formula: X = A – (B x (C – D))
X = monthly calculated amount
A = R500
B = 0,25
C = Monthly Remuneration
D = R4500
​R500 – R0.25
R6500 and more ​Nil ​R0.00

ETI is calculated on 12 qualifying months and not calendar months, in other words, those months where the qualifying employee did not qualify for ETI due to additional income being received, are included in the qualifying months not excluded.

Cessation of the employment tax incentive:

The incentive will not be available to employers on or after 1 March 2029.

Above table taken from SARS.