Employment Tax Incentive (The Youth Employment Subsidy) questions

[Dave A]

I see SARS has put up a page on what they think we need to know about the Employment Tax Incentive - or as it is more commonly referred to, the Youth Employment Subsidy.

It does a fairly good job, but it doesn't seem to answer one of my questions. So I ask here just in case someone knows the answer.

I've employed a youngster who qualifies (employed from 1st November 2013). Can I claim the incentive for November and December 2013 in my January 2014 return?

[Mike C]

To add to Dave's Question.

Employee is 18 to 29 years old (please note that the age limit is not applicable if the employee renders services inside a special economic zone (SEZ) to an employer that is operating inside the SEZ, or if the employee is employed by an employer that operates in an industry designated by the Minister of Finance;

1. What is the SEZ (specialized Economic Zone)?
2. Which industry has the Minister of Finance designated?
3. When they say that the age limit does not apply - do they mean that ANY age applies to these, or that the Employment Tax Incentive does NOT apply to these?

[Mike C]

Found this info on the Techforum Website, which answers my third question and tells me that the SEZ has not yet been specified.

Further, to encourage economic activity within Special Economic Zones (SEZ), the same incentive will be available to an employer who conducts his business in one of these zones (still to be specified), with the added advantage that the incentive is not limited to young people but is available in respect of all employees who qualify in terms of the other requirements.

[Dave A]

Maybe let's accumulate questions here, and I'll give SARS a call next week for answers.
One call to answer them all

(No sense on us all calling and asking the same questions)

[Houses4Rent]

Oh dear, most of these abreviations are greek to me and I do not have a payrole either nor any accounting software. I intent to employ/contract a juntior admin girl. Do I have any chance of getting a benefit which can be managed/claimed without all these complicated things?

[Christel]

If you are PAYE registered then you could get a benefit...

[Beancounter]

If you are PAYE registered then you could get a benefit...

You can only claim ETI if you are registered for PAYE. Refer to ETI guide paragraph 3:

"Section 3 stipulates that an employer is eligible for the ETI if the employer is registered under paragraph 15 of the Fourth Schedule for purposes of withholding and paying over to SARS employees’ tax and is not excluded under section 3(b) or 3(c). Paragraph 15 requires every person who is an employer to apply to the Commissioner for registration in accordance with Chapter 3 of the TA Act."

[Greig Whitton]

Oh dear, most of these abreviations are greek to me and I do not have a payrole either nor any accounting software. I intent to employ/contract a juntior admin girl. Do I have any chance of getting a benefit which can be managed/claimed without all these complicated things?

Yes, you do! You don't need a payroll system or accounting software to claim from the ETI, so the SIC codes referenced in this thread won't be relevant to you if you don't. I have a plain English introductory guide to the ETI that may help.

[Christel]

Hi Dave,
You can only start claiming the Incentive from the January salary, so you would not have any claim on the Oct/Nov/Dec salaries. SARS has updated their info page to include this: (http://www.sars.gov.za/TaxTypes/PAYE...Incentive.aspx) look under the second heading - "top tip" .

The SAIT is having a webinar about this on the 13th. I can give more feedback after that. Or if someone wants to add more questions, I can try and really listen (for a change) and give some feedback afterwards.

Thanks.

[Dave A]

The SAIT is having a webinar about this on the 13th. I can give more feedback after that. Or if someone wants to add more questions, I can try and really listen (for a change) and give some feedback afterwards.

My next question is the practicalities of capturing the incentive for accounting purposes. For now I'm going with an "Other Income" account, but a definitive guide would be useful.

And finally (for now) - would the incentive income form part of taxable income for income tax purposes?