Employment Tax Incentive (The Youth Employment Subsidy) questions

[Mike C]

I have just updated my payroll and had to enter an ETI (Standard Industry Classification Code) for the company as well as each employee. Can anyone tell me what this is all about?

[Dave A]

You can try this tool at Stats SA.

If the company is registered for SDL, there should be a SIC code on that registration.

[Christel]

For anybody that is interested in this topic, there is a YOUTUBE session on it: http://youtu.be/0WBhVEHfOZc

I'm sure most of your questions will be covered...

[Dave A]

Following on with SIC codes, scratching around I get the feeling this might be a bit of a minefield.

Stats SA seems to have the responsibility for creating and allocating SIC codes, but then there's also some indication that CIPC also has a hand in this.

Then when I check the SETA lists... Well, things don't tie up as neatly as one might expect.

I've attached the SETA list of SIC codes for everyone's convenience.
(Although I'm a little concerned this might just add to the confusion).

[Mike C]

I get the feeling this might be a bit of a minefield.

I must admit that I am rather confused. Who "allocates" the SETA code ... or perhaps it is better to ask ... is this code officially registered against a business? Can you change the SETA code without going through official channels, or is it merely for statistical purposes.

I have looked at our CK documents and don't see it listed anywhere there, and can't find any registration of SDL so can't link any SIC codes to that.

Furthermore Pastel Payroll has an extensive list of SIC codes, but not as extensive as the tool at stats SA. So I can't get an exact match.

Still more confusing is the fact that you can give individuals in the company different SIC codes.

[Dave A]

Furthermore Pastel Payroll has an extensive list of SIC codes, but not as extensive as the tool at stats SA. So I can't get an exact match.

I'm finding the same problem with the Intercode software I'm currently setting up - hence my current scratch around the SIC code issue.

What I do know (from the time I was actively involved with AgriSETA) is the SIC codes are (or were) being made more granular and has been added to in a fairly big way over the past 5 years or so. What I don't know with absolute certainty right now is who is in charge of generating them (just who is the authority here?).

I also suspect issues with matching them up across different sources, although I haven't got to closely interrogating that aspect as yet.

When it comes to the limitations of software in this regard, I expect our next step would be to give the software developers feedback on the issue.

[Christel]

Hello,
I've just returned from a PAYE update course and can report that the SIC codes they are referring to w.r.t. ETI is called the SIC7 codes, and I found it on the SARS website. It is NOT the same as the SDL/SETA SIC codes.

I found a list in the document called: SARS_PAYE_BRS - PAYE Employer Reconciliation_(Including the ETI Requirements)_v12 1 3.doc - Appendix E (From page 68 onwards).

[Dave A]

Well, the good news is the Stats SA tool I linked to earlier are also the SIC7 codes, and the results do tie up with the SARS document Christel referred to above.

And yes, after testing some samples, the SETA SIC codes don't correlate. Not even close.

[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]

The ETI guide states:

10.2 Income tax
Any amount of ETI received by an eligible employer under the ETI Act that reduces the employee’s tax payable by that employer is exempt from income tax under section 10(1)(s) of the Income Tax Act.

The Income Tax Act states:

10. Exemptions
1)There shall be exempt from normal tax--
the receipts and accruals of the government of the Republic in the national, provincial or local sphere;
s)any amount by which the employees’ tax as defined in section 1 of the Employment Tax Incentive Act, 2013, payable by an employer as contemplated in section 3 of that Act is reduced in terms of section 2(2) of that Act or paid in terms of section 10 of that Act; [added by the Employment Tax Incentive Act, 2013];

As the ETI claim is referred to as a "receipt" or "accrual", I will classify it as other income. I will also deduct it from taxable income as it is exempt in terms of Section 10.

[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.