Important: RSA COVID-19 - Revised Further Employment Tax Incentive Amendments- South Africa

Dear X3 HR and Payroll User, 

The Ministry of Finance published the revised draft Disaster Manager Tax Relief Bill on 19 May 2020. These revised draft Bills provide for relief measures for employers i.r.o the employment tax incentive (ETI), PAYE and SDL. Although not promulgated yet, these draft Bills provide the necessary legislative amendments required to implement the Covid-19 tax relief measures.

These proposed relief measures are deemed to come into operation on 1 April 2020 for a 4-month period until 31 July 2020. These measures will only apply to employers who are registered for employees’ tax with SARS on or before 25 March 2020. Employers who are not registered for employees’ tax with SARS on or before 25 March 2020 may claim ETI, but not the additional ETI relief as set out in the revised draft Disaster Manager Tax Relief Bill of 19 May 2020.

 Summary of the proposed changes for ETI contained in the Bills:

  • Amendments were made to the ETI incentive amounts effective from 1 April 2020 – 31 July 2020.
  • The “date of employment” qualifying criteria of “employed on/after 1 October 2013 by the employer or associated person” has been removed from 1 April 2020 – 31 July 2020 with regard to the additional reliefs.
  • The remuneration used to calculate the ETI incentive should not be grossed-up from 1 May 2020 – 31 July 2020.

 It is important to take note of the following:

  • This patch contains all changes to apply the additional ETI relief and should only be integrated where the employer does qualify according to criteria specified in the attached document.
  • These changes must therefore not be implemented if the employer has been registered after 25 March 2020. In this case, the original ETI rules and calculations apply.
  • If the previous patches for ETI released in April 2020 and May 2020 were not integrated, only the attached patch(es) for ETI should be integrated.
  • A total recalculation should be performed to backdate April and May’s ETI values.  Please see the attached document for more information.
  • After the four month period passed (31 July 2020), a patch containing the original ETI headings and grid values, will be supplied. If customisation was done on the statutory payplan for ETI, I suggest that a patch should be created with the current ETI headings and grid values which can be restored again after the 4 month period passed.

Please get in touch with our Support team for this detail documentation and the patches related to the amendments 

Kind Regards, 

X3 HR and Payroll Support Team