Company Tax Incentives: Employment Tax Incentive (ETI)

The ETI was introduced to encourage employers to hire younger less experienced workers in an effort to reduce the disproportionately high unemployment rate among young South Africans.

This incentive effectively allows an employer to share a portion the cost of hiring younger job seekers with government without impacting the salary of the employee. This is achieved by reducing their monthly PAYE liability by up to R1,000 per a qualifying individual for the first 24 months of their employment.

The ETI is available to all tax compliant employers who hire staff between the ages of 18 to 29 and who earn less than R6,000 per a month. This is not available for connected parties, spheres of government or domestic workers.

The Employment Tax Incentive came into effect on 1 January 2014 and will be available till February 2019.

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