Take advantage of the Employment Tax Incentive

TRAVEL agency owners
wanting to hire new young
employees can take
advantage of the Employment
Tax Incentive Act, which took
effect on January 1, says
Gareth Cremen, partner at
Ramsay Webber attorneys.
Gareth says the move by
government is to encourage
the employment of the
millions of matriculants
and others in special
circumstances who are not
currently able to participate in
economic activity due to lack
of skills and training, as well
as educational resources.
According to SARS, the
Employment Tax Incentive
value during the first year will
be 50% of the monthly wage
up to a monthly wage of
R2 000. For wages between
R2 000 and R4 000, the
value of the incentive will
be R1 000 and for wages
between R4 000 and
R6 000 the incentive value
will decrease linearly from
R1 000 to zero.
The incentive is available to
all private-sector employers
in all sectors of the economy
who are registered with SARS
for PAYE:
 Employers can claim the
incentive on a sliding scale
for any employee between
the ages of 18 and 29 hired
on or after October 1.
 These employees must
possess a South African
ID and currently receive a
monthly salary above the
relevant minimum wage
but less than R6 000
per month.
 If there is no legal
minimum wage applicable
in a particular sector, the
monthly salary must be
greater than R2 000.
 Employees connected or
related to the employer are
not eligible.
For more information, visit
www.sars.gov.za/TaxTypes/
PAYE/Pages/Employment-TaxIncentive.aspx.