Employment Tax Incentive ETI 2017

So, can Employment Tax Incentive ETI still be claimed after 31 December 2016 and is it still valid in 2017? We have been following up with SARS to ensure we are up to date on this matter at all times. We have been advised that the review process is still in progress. Thus, Employment Tax Incentive ETI is still valid and should be applied in 2017 until further notice.

Employment Tax Incentive (ETI) was implemented with effect from 1 January 2014. Companies have been able to claim ETI for all of their qualifying employees. There have been many questions and uncertainties from various Employers, whereby some don’t completely understand how it gets calculated and this led to certain employers feeling anxious about the effect it might have on their Pay-As-You-Earn (PAYE) and their annual returns in the near future.

To add to this uncertainty, the incentive’s effectiveness was to be reviewed to determine whether to incentive (scheduled to end of 31 December 2016) will continue or not. The Employment Tax Incentive Act, Act No. 26 of 2013 also mentions that the incentive ends on 31 December 2016 – “an employer may not receive the employment tax incentive from 1 January 2017”.

Below is a short summary focusing on the main aspects of ETI followed by the calculations :

Should you have any further questions regarding the above, please feel free to contact us on 021 447 9565 or send us a email on payrollsupport@e2e.co.za and we will give you a call to assist.

What is Employment Tax Incentive ETI:

  • In short, the Employment Tax Incentive (ETI) was implemented to encourage employers to employ “young workers”.

Some of the benefits include :

  • Improving the skills and experience of young South Africans whilst also improving the high unemployment rate in our country.
  • Reducing the employers PAYE amount due to SARS on a monthly basis, with the incentive allowing the employer to reduce the Total Gross PAYE on their EMP201 with the combined ETI total calculated for all qualifying employees.
  • Employers can claim the incentive for all qualifying employees for a 24 month period.
  • Employees’ wages unaffected while the employer can reduce the companies PAYE liability.

Qualifying Employees :

  • Employee has a valid SA ID, Asylum Seeker permit or ID in terms of Refugee Act
  • 18 – 29 years old
  • NOT a domestic worker
  • Employee is not a Connected Person to Employer
  • “A connected person or relative means your spouse or anybody related to you or your spouse by blood in the third degree (e.g. great great grandfather etc.), and any spouse of these persons.”
  • Employed ON or AFTER 1 October 2013
  • Paid a wage of at least R2000 and not more than R6000
  • Where employee was employed for 160 hours in a month

Qualifying Employers :

  • Registered for Employees Tax (PAYE)
  • Is not a municipal entity
  • Is not in national, provincial or local government sphere
  • Not a public entity listed in Schedule 2 or 3 of the Public Finance Management Act
  • Not disqualified by the Minister of Finance due to the displacement of an employee or by not meeting the conditions as may be prescribed by the Minister by regulation.

Employment Tax Incentive ETI Calculations :

Some Employers might have experienced certain ETI errors when submitting their Employer Reconciliation Declaration (EMP501) due to certain validation rules.

It is crucial to ensure that your ETI has been setup correctly on your Payroll software, and that the calculations are accurate and correct. For more information regarding the setup on your Payroll please contact us on the details provided.

Below is a summary on how ETI is calculated based on the different formulas :

  • For the first twelve months of employment :

 

Remuneration Tax % RebateTax Rebate Amount
R0 – R200050%R 0 – R999.9
R2001 – R4000FixedR1000
R4001 – R6000Formula X = A –(B x (C-D)) X = tax rebate A = R1000 B = 0,5 C = Monthly Remuneration D = R4000R 0 – R999.9
  • For the For the second twelve months of employment :

 

RemunerationTax % RebateTax Rebate Amount
R0 – R200025%R 0 – R499.9
R2001 – R4000FixedR500
R4001 – R6000Formula X = A –(B x (C-D)) X = tax rebate A = R500 B = 0,25 C = Monthly Remuneration D = R4000R 0 – R499.9

We would like to ensure all of our clients that we will continuously monitor and provide updates with regards to the review process and possible “cut-off” date in which you are able to still claim ETI.

Regards

Anton

Sage Income Verification 2017

New and exciting ways to simplify your life through innovation from Sage brought to you by End 2 End Business Solutions.  Sage Income Verification enables organizations to provide their employees’ payslip information to registered Financial Services Providers (FSP).

For assistance with Sage Income Verification Log a support request and we’ll contact you: Click Here

Powered by Sage HR & Payroll, and endorsed by the Banking Association of South Africa, our valued customers now have the opportunity to participate in the Sage Income Verification program.

What is Income Verification?

Sage Income Verification enables organizations to provide their employees’ payslip information to registered Financial Services Providers (FSP), through a secure platform managed by Sage HR & Payroll. Participating FSP’s can then access the necessary payslips once the individual provides consent to the FSP during a financial application.

  • Convenient and streamlined financial applications
  • Supports responsible lending
  • Secure platform reduces payslip fraud.
  • Strengthens obligations set out by the Protection of Personal Information Act (POPI)

How does Sage Income Verification work?

Historically, when applying for finance through a Financial Service Provider (FSP), ‘John Brown’ would have been required to provide 3 months worth of payslips as well as the other legally required documentation. (FICA, Bank Statements and ID etc.)

Going forward, if John’s employer is participating in the Income Verification program, then John simply has to give the FSP consent to request the necessary payslips electronically.

Benefits to employer and employee:

Sage Income Verification presents a range of benefits to both the company and the individual, including the following:

  • There are no additional costs to the employer or employee.
  • Reduced phone calls from creditors to businesses for verification of employee income.
  • Reduced phone calls from creditors for verification of employment.
  • Stronger compliance to the POPI act (Protection of Personal Information).
  • Reduces the need to supply physical documentation when applying for credit.
  • Supports responsible lending practices.
  • Reduces the time that employees spend out of the office to complete credit applications.
  • Applications take less time to complete and receive approval from the FSP.
  • Fully automated process.
  • Consent driven program, eliminating abuse and fraudulent requests of information.
  • Independent audits rated the security model of the highest standard internationally.

 

How to participate using Sage Pastel Payroll & HR

In order to participate, clients can go to Setup…Company Parameters.  On the Company-tab, clients can select to participate.

Sage Income Verification E2E

Selecting the option to participate allows Sage Pastel Payroll & HR to upload all payslips to the secured online platform, from where the authorized users can access the pdf payslips.

Once clients have selected to participate, payslips will automatically be uploaded whenever the users do a Payroll Run or process an employee individually.

Users can also upload payslips for previous periods, by selecting View…Payroll   Reports…Reprint Payslips.

Process Sage Income Verification

 

Would love to hear from you.

E2E

SARS Interim EMP501 Submission 2016

Dear Readers, SARS Interim EMP501 Submission 2016 is now open.  It’s that time of the Year again to get your Company EMP501 Recon and Declarations Submitted.  There have been many changes and SARS updates to get compliant with.  I listed the SARS top tips on the current and recent changes.

Contact us on payrollsupport@e2e.co.za for any additional assistance.

SARS Interim EMP501 Submission 2016 E2E

SARS Interim EMP501 Submission 2016 E2E

SARS Interim EMP501 Submission 2016

  • Employer Interim Reconciliation 2016
    Employers are required to submit an EMP501 confirming or correcting the amounts declared for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL), Unemployment Insurance Fund (UIF), and Employment Tax Incentive (ETI) in their EMP201s submitted, the payments made and the tax values of the Employee Tax Certificates [IRP5/IT3(a)]. The interim reconciliation is for the six-month transaction period 1 March to 31 August and must be submitted during September and October.For the 2016 Employer Interim Reconciliation the following legislative and system changes should be noted:

    • From 1 March 2016 contributions to Pension, Provident and Retirement Annuity Fund is deductible for payroll taxes
    • New source codes (3817, 3825, 3828) have been created to differentiate between Pension, Provident and Retirement contributions and new source code (4582) to indicate the total value “remuneration” portion where the source codes allow a 20/80 split
    • Medical expenses tax credit for people over 65 years who are still employed have been introduced
    • New source code(4120) has been created  to capture the additional medical expenses tax credit for employees over 65 years
    • Taxpayers will be able to submit a request for correction in relation to audited periods after the audit has been completed. Audit outcomes will be communicated to taxpayers via listed email on SARS records, posted letters will only be sent to taxpayers who do not have an email listed under their profile
    • EMP 501 has been updated to enable employers to print both EMP 501 and IRP5/IT3 (a) as a package. There is also an option for taxpayers to write the postal address in their preferred unstructured format
    • e@syfile Employer enhancements include an upgrade to Windows 8, and bulk printing of IRP5/IT3(a) certificates
    • Capturing of an EMP 201 return prior to 1999 will be allowed.

Top Tip: The latest e@syFile™ release notes is version 6.7.0.

  • 13 June 2016 – 2016 IRP5/IT3(a) : 4018
    Income Protection Policy Premiums (4018) is not allowed as a deduction from 1 March 2015. Some employers have taken this deduction into account for the 2016 PAYE calculations.   This resulted in the under-deduction and payment of PAYE.These employers are requested to rectify such under-deductions and payments to SARS. Incorrect IRP5/IT3(a) certificates should be corrected, submitted to SARS and re-issued to affected employees. Employers are requested to make these corrections urgently to ensure that the correct details can be pre-populated by SARS on the employees’ income tax returns (ITR12s).The 4018 deduction may still be reflected on the 2016 IRP5/IT3(a) certificate although it no longer qualifies as a deduction for tax purposes.
  • 1 April 2016 – Employer Annual Reconciliation Employers are required to submit their Pay-As-You-Earn (PAYE) Employer Annual Reconciliations between 18 April and 31 May 2016 to SARS, confirming or correcting payroll tax amounts which were declared during the 2015/2016 tax period.This year, employers are urged to accurately verify and update each employee’s personal and financial details before submitting their Annual Reconciliation Declaration (EMP501) and Employees Income Tax Certificates [IRP5/IT3(a)s] to SARS.Should these details be incorrect on an IRP5 certificate, the employee will be unable to file his/her Income Tax Return for Individuals (ITR12) during Tax Season.  Individuals will no longer be allowed to make any corrections to pre-populated IRP5 details on their returns.In cases where details are incorrect, employees will have to revert to their respective employers who will need to make changes on the IRP5 and re-submit these to SARS. This process can be time consuming and it may become problematic for employees to file on time.

    Employers play a very important part in the income tax cycle which effectively starts on 18 April with the submission of the annual reconciliations. We rely on your cooperation to make the submission of ITR12s later in the year as stress-free as possible for all involved. Need help? Call the SARS Contact Centre on 0800 00 7277

BCEA Office Posters

Labour Compliance Compulsory BCEA Office Posters! Very few Employers are actually aware of the fact that the Department of Labour has made it a mandatory requirement that the office or workplace has got specific posters visible to all Employees.

One of these being the BCEA Office Posters (Basic Conditions of Employment Act) Poster. Not to worry, we have got your back.

BCEA Office Posters

BCEA Office Posters Summary :

This notice as amended on 29 August 2014 must be displayed by all employers, in terms of Section 30 of the Act, in the official languages used at any place where employees work. This would include any branch operations, depots, shops etc.

They are available in all eleven official languages and at various different retails stores (online stores).

Office Requirements :

There is no specific amount of BCEA office Posters that should be displayed in a office, but you must display a summary of the Basic Conditions of Employment (BCEA) Act where all employees can see it.

Of Interest and Benefit to:

  • Safety officers
  • Trade unions
  • Employers
  • Managers
  • Industry

The following is one of many examples of the kind of information one is to find on the BCEA Posters :

All employees receive meal intervals during work intervals as required by national law and industry standards

What does this mean?

  • The BCEA states that employee who works continuously for more than five hours must be given a meal interval of at least one continuous hour.
  • If agreed in writing a meal interval can also be reduced to not less than 30 minutes.
  • A meal interval can also be dispensed with if an employee works fewer than six hours a day.

Where Can I Purchase these BCEA Office Posters?

We are happy to inform that we have made provision to ensure that you as our valued clients, don’t have to search all over to find these posters. For your convenience, these posters can be bought directly from our office.

The Posters specifications are :

  • A1 Size – 59.4 x 84.1 cm
  • Laminated
  • Price : R190.00 Excluding VAT

Feel free to contact our office on 021 447 9565 or log a support request (by Clicking Here) if you are interested and I will personally contact you to ensure you receive your order in the timeliest manner possible.

We ship to anywhere in South Africa.

E2E Regards

Anton

Pastel Payroll Employee Count Issue

There appears to be a Partner Payroll issue doing rounds on some of our clients systems, which affects their Employee count on the software.

In short, one might be registered for a 100 Employee Payroll, obviously allowing you to create a total of up to 100 Employee Masterfiles (combined between your different companies created on Payroll). What would then happen at some of our clients, is that the program will register/pick up the exact same company twice or even 3 times and thus doubling the actual Employee count and seeing e.g. a 45 Employee company as 135 Employees.

Below is a typical example of the problem. This screen can be accessed by opening Payroll and going to Help, About and then “Employee Count” at the bottom right. As you can see in the below example, the exact same company is “registered” 3 times. Therefor the software is now registering a 45 Employee company as 135 Employees.

Blog Pic

 

Solutions:

We have tried and tested the below solution on a number of occasions and I am happy to report that the result was successful each time. The following steps can be followed in order to correct the issue:

  1. If you have a network consisting of more than 1 PC using Payroll, make sure to close the program on each PC and go to the Payroll Server/Main Payroll PC.
  2. Open Payroll on the Server and go to File, Open, Manage. All your companies will be listed with a brown briefcase icon (note, it will just show each company once even though it shows it more than once on the Employee Count Screen)
  3. Click on each company and select the option to “Remove Company” on the right hand side. Do this for each company until you are only left with the Server name right at the top.
  4. Next you will re-register the software. This can be done by clicking on Help, Register your package. On the first screen click on next, single user/server, UN-TICK register online and then select ‘next’, ‘next’, etc, until you reach the summary screen.
  5. Lastly, close and reopen Payroll. Go to File, Open, Manage and then add each of your companies again by clicking on “Add Company” on the right hand side.

Like mentioned, the above solution does work. Should you follow these steps and you still experience the same issue, you are more than welcome to contact us so that we can assist.

Alternatively, if you would like us to rather attend to it, please give us a call on 021 447 9565 or post a comment on this blog and I’ll assist.

 

 

 

 

The Most Important 2015 Event On Your Payroll Calendar

Annual Payroll Tax Seminar The stage is set for the much anticipated 2015 Budget changes. As always the Annual Payroll Tax Seminar promises to be interesting and informative.

The final changes to the legislation that are effective from March 2015 will be discussed in detail in the seminar, along with the 2015 Budget proposals and a glimpse into what the future holds for payroll matters.

Some topics that will be included:

– Retirement Reforms – where are we now and where are we going?
– PAYE law changes – residential accommodation, company cars, restraint of trade, Income Protection schemes.
– Labour Law changes – overview of the Employment Equity changes
– PAYE Administration – tax certificates and related issues.
– Employment Tax Incentive – calculation changes and refunds.
– The 2015 Budget proposals – this should be interesting….
– AA88 Penalty Notices – changes that employers must comply with.
– Future prospects

Book your seat now and let payroll expert Rob Cooper explain the legislation in layman’s terms to ensure you are ready for the new tax year.

Duration:
Registrations: 08h30 – 09h00
Seminar: 09h00 – 12h30

Investment per delegate:
Price: R2, 217 Incl. VAT

Dates, venues & areas

  • 02 March Sage Conferencing, Woodmead
  • 03 March Silverstar Casino, Muldersdrift
  • 04 March Emperors Palace, East Rand
  • 05 March Sage Conferencing, Woodmead
  • 06 March Centurion Lake Hotel, Centurion
  • 09 March Gateway Hotel, Durban
  • 10 March Hemingsway Casino Hotel, E.L
  • 11 March N.M. Metropolitan University, P.E
  • 12 March Sanlam Head Office, Cape Town
  • 13 March Crystal Towers Hotel, Cape Town
  • 16 March CSIR, Pretoria
  • 17 March Silverstar Casino, Muldersdrift
  • 18 March Emperors Palace, East Rand
  • 19 March Quest Conference Estate, Vanderbijlpark
  • 20 March Windmill Casino, Bloemfontein
  • 23 March Sage Conferencing, Woodmead
  • 26 March Meropa Casino, Polokwane
  • 27 March Emnotweni Sun Hotel, Nelspruit
  • 30 March Gateway Hotel, Durban
  • 31 March Sanlam Head Office, Cape Town
  • 01 April Sage Conferencing, Woodmead

Booking Details
To book please send an email containing the Name(s) or the Delegate(s) attending, The Date Attending as well as the Company name, Serial Number and Telephone Number to customercare@e2e.co.za.

Payment: Deposit/ Transfer

Simply email customercare@e2e.co.za to book and we’ll do the rest!


 

 

Terms and Conditions: Seats are allocated on a first-come-first-served basis. Attendee substitutions must be made at least 2 working day prior to the seminar commencement date. Cancellations – strictly NO cancellations accepted. Signing of this form, faxed or emailed, will be regarded as a confirmed booking. Note that irrespective of attendance, full fees will be payable Reschedules are only accepted upon written notification at least 2 working days prior to the seminar commencement date failing which a R150 fee will be levied. Sage Pastel Seminars reserves the right to cancel any seminar should there be an insufficient number of delegates booked for that event.