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ETI Changes required January 2020

The Taxation Laws Amendment Act, 2019 was published on 15 January 2020. Refer to page 78: Amendment of section 4 of Act 26 of 2013.

The below change to ETI is effective from 1 August 2019 and must be backdated accordingly.

For an employee to qualify for ETI, he/she must be paid at least the minimum wage (among other qualifying criteria, which is not changed by this amendment).

Before 1 August 2019, the minimum wage was:

  • the minimum wage according to the wage regulating measure, or
  • if no wage regulating measure was applicable, R2000 per month for 160 employed and remunerated hours.

 From 1 August 2019, the minimum wage is:

  • the higher of -
    • the national minimum wage (R20 per hour, R18 per hour for farm workers, R15 for domestic workers, R11 per hour for workers employed in a public works programme and the minimum weekly learnership allowance for learners), or
    • the minimum wage according to the wage regulating measure (sectoral determination, bargaining council agreement or collective agreement).
  • If none of the above is applicable (for example the employer is exempt from the national minimum wage after successful application and there is no wage regulating measure), then the R2000 wage per month for 160 ordinary employed and remunerated hours should be used as the minimum wage.

What is required from Payroll users who claim ETI

1. Based on the information provided in the diagram below, determine if it is required for you to make any changes

2. If you need to make changes, click here to download a document that will provide the relevant steps

Take Note: Our Support will only be able to clarify the process or a step as implementing these changes fall outside the scope of the Support Desk. Should you require assistance in making these changes, you can click here to book a consultation.