Burden to the Employer or a catalyst to a thriving economy?
By now we would assume that all employers within our domain (LabourNet Payroll Solutions) would know what ETI (Employee Tax Incentive) is. For those outside of our circle, this is an incentive aimed at employers to employ the inexperienced youth of South Africa and receive an incentive back from SARS through a rebate on PAYE.
Not something you hear every day; you receive something back from SARS as an employer!
Have you participated in employing the youth and growing the economy? If you haven’t, then you have not been contributing your share to kick start a thriving economy. The good news is that you can still benefit from this initiative as a business, as you can still participate until the end of 2019. Therefore only a few more months are left!
To qualify for ETI as an employer is as easy as to apply the following validations to new recruits:
Individual must be in possession of a valid South African ID and aged between 18 and 29 years
Not be related to the employer
Be remunerated at the minimum wage applicable to that employer sector / industry or at least R2000 but not more than R6000.
The above excludes domestic workers.
Further to the above our newly appointed President, Mr. Cyril Ramaphosa announced a “Youth Employment Service (YES)” The “YES” initiative aims to offer paid work experience over the next three years to more than one million young South Africans. This initiative is a partnership between government, business, labour and civil society. About 100 companies signed up for the initiative already, with big-hitters like ABSA, SASOL and Investec amongst others.
With this initiative, businesses will create one-year paid positions for youth aged between 18 and 35 with a minimum paid stipend of R3500 a month.
If your businesses do not have the capacity to place people in their organization you have the option of sponsoring the salary for a one-year placement in small and medium enterprises, or to help young people start and grow their own businesses through seed funding. In return companies will receive incentives by government for participation in this “YES” initiative which may include ETI.
The Department of Trade and Investment views the participation in YES to be in line with the objectives of B-BBEE policy and has a keen interest that there be maximum impact resulting in empowerment of young South Africans. In order to create certainty and ensure rapid uptake in YES, it has agreed to delink the YES and the Bursary target of 2.5%. This means that the Bursary contributions will not be a precondition to obtain BEE recognition as a YES participating entity.
How YES Works.
Government has introduced a new Youth Employment B-BBEE recognition, allowing a business that meets YES targets and complies with registration criteria to move up a level on their current B-BBEE scorecard. In addition, to encourage demand-side job creation, companies employing youths between 18 and 29 years old will qualify for the Employment Tax Incentive.
There are 6 000 000 unemployed youths in South Africa. YES is applying fresh thinking to create new work opportunities; giving youth a chance to establish a future, becoming self-directed and restoring their dignity.
“Our most grave and most pressing challenge is youth unemployment. It is therefore a matter of great urgency that we draw young people in far greater numbers into productive economic activity.” President Cyril Ramaphosa
So you see dear reader we all need to work together to build our economy, to a place where we all want it to be. It is no longer only Government’s job to grow and boost our economy, it is now also our RESPONSIBILITY.
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