Section 3 (ETI) – Eligible employers

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3       Eligible employers

 

An employer is eligible to receive the employment tax incentive if the employer-

 

(a)     is registered for the purposes of the withholding and payment of employees’ tax by virtue of paragraph 15 of the Fourth Schedule to the Income Tax Act; and

 

(b)     is not-

 

(i)      the government of the Republic in the national, provincial or local sphere;

 

(ii)     a public entity that is listed in Schedule 2 or 3 to the Public Finance Management Act, 1999 (Act 1 of 1999), other than those public entities that the Minister of Finance may designate by notice in the Gazette on such conditions as the Minister of Finance may prescribe by regulation;

 

(iii)    a municipal entity defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000); and

 

(c)     is not disqualified from receiving the incentive—

 

(i)      by the Minister of Finance in accordance with section 5(1)(b), due to the displacement of an employee by virtue of section 5(2); or

 

(ii)     by not meeting such conditions as the Minister of Finance, after consultation with the Minister of Labour, may prescribe by regulation, including—

 

(aa)   conditions based on requirements in respect of the training of employees; and

 

(bb)   conditions based on the classification of trade in the most recent Standard Industrial Classification Code issued by Statistics South Africa.

Section 2 (ETI) – Instituting of employment tax incentive

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Part I
Employment tax incentive

 

2      Instituting of employment tax incentive

 

(1)     An incentive, called the employment tax incentive, in order to encourage employment creation is hereby instituted.

 

(2)     If an employer is eligible to receive the employment tax incentive in respect of a qualifying employee in respect of a month, that employer may reduce the employees’ tax payable by that employer in an amount determined in terms of section 7 or receive payment of an amount contemplated in section 10(2), unless section 8 applies.

Section 11 (ETI) – Reporting

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11    Reporting


(1)     The Commissioner of the South African Revenue Service must submit to the Minister of Finance a report in the form and manner and containing the information that the Minister of Finance may prescribe by regulation in the Gazette for the purposes of the monitoring and evaluation of the employment tax incentive.


(2)     The Minister of Finance must publish information on the employment tax incentive twice a year

Schedule (ETI)

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SCHEDULE

(Section 13)

No. and year

Short title

Extent of amendment

Act 58 of 1962

Income Tax Act, 1962

1.  Amends section 10.

2(a)-(b).  Amends Paragraph 2 of the Fourth Schedule.

Act 34 of 1997

South African Revenue Service Act, 1997

1.  Amends Schedule 1.

Act 28 of 2011

Tax Administration Act, 2011

1.  Amends Section 70.

Index to ETI

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ARRANGEMENT OF ACT

Section 1 – Definitions

Part I
Employment tax incentive

Section 2 – Instituting of employment tax incentive

Part II
Eligible employers and qualifying employees

Section 3 – Eligible employers

Section 4 – Compliance with wage regulating measures

Section 5 – Penalty and disqualification

Section 6 – Qualifying employees

Part III
Determining amount of employment tax incentive

Section 7 – Determining amount of employment tax incentive

Section 7A – Minister may announce altered amounts

Section 8 – Unavailability of employment tax incentive for reducing employees’ tax

Section 9 – Roll-over of amounts

Section 10 – Refund

Part IV
Miscellaneous

Section 11 – Reporting

Section 12 – Cessation of employment tax incentive

Section 13 – Amendment of laws

Section 14 – Short title and commencement

Schedule

BE IT THEREFORE ENACTED by the Parliament of the Republic of South Africa, as follows:

ARRANGEMENT OF SECTIONS (ETI)

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Reproduced under Goverment Printer’s Authorisation (Authorisation No. 11837) dated 30 November 2020.

Please remember to periodically “Check for Updates”!

EMPLOYMENT TAX INCENTIVE ACT 26 OF 2013

(ASSENTED TO 17 DECEMBER, 2013)

[Commencement date: 1 January, 2014]

[English text signed by the President]

as amended by

Taxation Laws Amendment Act 43 of 2014

Taxation Laws Amendment Act 25 of 2015

Taxation Laws Amendment Act 15 of 2016

Taxation Laws Amendment Act 17 of 2017

Taxation Laws Amendment Act 23 of 2018

Rates and Monetary Amounts and Amendment of Revenue Laws Act 32 of 2019

Taxation Laws Amendment Act 34 of 2019

Disaster Management Tax Relief Act 13 of 2020

Tax Administration Laws Amendment Act 16 of 2022

Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2022

Tax Administration Laws Amendment Act 43 of 2024

Latest 2026 Live Updates: COMPLETED!

Rates and Monetary Amounts and Amendment of Revenue Laws Act 3 of 2026

To report an issue, please contact us at service@hApp-e-tax.co.za

ACT

To provide for an employment tax incentive in the form of an amount by which employees’ tax may be reduced; to allow for a claim and payment of an amount where employees’ tax cannot be reduced; and to provide for matters connected therewith.

PREAMBLE

SINCE the unemployment rate in the Republic is of concern to government;

AND SINCE government recognises the need to share the costs of expanding job opportunities with the private sector;

AND SINCE government wishes to support employment growth by focusing on labour market activation, especially in relation to young work seekers;

AND SINCE government is desirous of instituting an employment tax incentive,