Government Gazette 7498 (Notice No.67) was published, effective 1 April 2021, in which the definition of “remuneration” was amended. The remuneration on which the VET levy should be calculated no longer referred to remuneration as defined in Chapter 1 of the Labour Act, but instead referred to “remuneration as defined in Part I of Schedule 2 of the Income Tax Act”. It was therefore interpreted that remuneration for the purpose of calculating PAYE must be used to calculate the VET levy.

 The NTA (National Training Authority) published a notice to employers on 27 July 2021 to clarify their interpretation of the amendment as well as their intention thereof. The definition of remuneration as per the Income Tax Act should be used to determine the VET levy – however, any part of the definition which is meant to determine the taxability for PAYE purposes, must be disregarded.  

 This means that the intention was not to change how employers calculated the VET levy, but rather to focus on the broader definition of remuneration to ensure nothing was incorrectly excluded.

 In Release 5.6b, you were advised to amend your Payroll system definitions. Basically, this change must be reversed, and you must revert to the original include/exclude fields where necessary and ensure all the fields are incorrectly included/excluded.

NOTE: The changes require user intervention. To learn more about how to make these changes on your system, click here to access the knowledgebase article.