LAST CHANCE TO CLAIM ETI AMOUNTS IMMINENT
The Disaster Management Tax Relief Bill No. 11 (2020) proposed amendments to the provisions of the Employment Tax Incentive Act No. 26 (2013), entitling qualifying employers to claim additional ETI amounts for the period 1 April 2020 – 31 July 2020.
The last opportunity to claim any additional ETI amounts is in the August 2020 EMP201.
AMENDED AND NEW ETI CLAIM AMOUNTS
For the period 1 April 2020 – 31 July 2020, the following employees will also be qualifying employees, provided all other requirements of section 6 of the ETI Act have been met:
|Qualifying employees||Employment date||Monthly remuneration||ETI claim amount formula||Employee worked less than 160 hours in a month|
|Qualifying employees aged 18 – 29 years||On / after 1 October 2013||April 2020: Gross-up remuneration for employees that worked less than 160 hours
May 2020 – July 2020: Actual amount paid / payable: No gross-up calculation required
|First 12 months: Apply amended section 7(2) formula||Apportion calculated ETI claim amount as per section 7(5):
ETI Claim amount x
[Number of hours that the qualifying employee was employed and is paid remuneration / 160 hours]
|Next 12 months: Apply amended section 7(3) formula|
|Qualifying employees aged 18 – 29 years and have already qualified for ETI for 24 months||On / after 1 October 2013||Apply new section 7(3A) formula|
|Qualifying employees aged 18 – 29 years||Before 1 October 2013||Apply new section 7(3A) formula|
|Qualifying employees aged 30 – 65 years||Before, on, or after 1 October 2013||Apply new section 7(3A) formula|
The amended section 7(2) and 7(3) formulas, as well as the new section 7(3A) formula are as follows:
|Monthly remuneration amount||Section 7(2)||Section 7(3)||Section 7(3A)|
|R0 – R1 999,99||87,5% of monthly remuneration||62,5% of monthly remuneration||37,5% of monthly remuneration|
|R2 000 – R4 499,99||R1 750||R1 250||R750|
|R4 500 – R6 499,99||R1 750 – [87,5% x (monthly remuneration – R4 500)]||R1 250 – [62,5% x (monthly remuneration – R4 500)]||R750 – [37,5% x (monthly remuneration – R4 500)]|
CUT-OFF DATE FOR SUBMISSION OF ETI CLAIMS
Where an employer does not reduce PAYE with the amount of ETI claims, despite such amount being available to the employer, the employer is entitled to claim such ETI in the next EMP 201. However, the last opportunity that the employer has to claim any additional ETI amounts, is in the EMP 201s for August or February of each year.
For example, where an employer was only able to quantify the additional ETI claim amounts to which it is entitled as a result of the provisions of the Disaster Management Tax Relief Bill in July 2020, the employer should claim the additional ETI amounts in the August 2020 EMP 201. The employer will not be able to claim the additional ETI amounts in the August 2020 EMP 501, or in any of the EMP 201s following the submission of the August 2020 EMP 501 (i.e. for the period September 2020 – February 2021).
This means that any unclaimed ETI amounts relating to the period March 2020 – August 2020, will be forfeited. It is, therefore, advisable that employers prioritise the finalisation of any additional ETI claim amounts in time for the submission of the August 2020 EMP 201.
if you require more guidance or have any related queries regarding your corporate tax compliance challenges. To keep track of tax-related COVID-19 measures, please follow us on social media .