Newsflash: Employment Tax Incentive Extension: Clarification

It has come to our attention that there is inaccurate information circulating in Industry with regards to the Employment Tax Incentive (ETI) that was negotiated at NEDLAC and agreed to under the Jobs Summit Agreement. The information is inaccurate in that it purports that the ETI has been increased to earnings of R8000.00 and age, increased to 35 years, from 1 April 2019.

We have confirmed this with National Treasury, through Business Unity South Africa (BUSA), and referenced the relevant legislative provision (the Taxation Laws Amendment Bill) passed by the National Assembly yesterday. Both the current age limit (up to 30 years of age) applicable to ETI and the monetary limit of R6000 remain unchanged, but the ETI applicability has been extended to 1 January 2029 as per the Jobs Summit Agreement.
The ETI is the only direct employment incentive in South Africa. The extension of the time period of application of the ETI to 10 years is a positive development as it creates the necessary stability in the short and medium term for businesses to enhance the use of the incentive in order to promote employment of young people. It is also a sufficient period for smaller businesses to take up the opportunity if they may not have already done so, due to the short duration of the previous incentive.
The RMI acknowledges the good work done by BUSA’s NEDLAC negotiating team in securing both the extension of the scheme, and obtaining the clarity required.