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Cape Town - The incentive to hire young people comes into effect on January 1, 2014 and will last for two years, according to the employment tax incentive bill tabled in Parliament on Thursday.
In his recent mini budget speech Finance Minister Pravin Gordhan said the revised bill is intended to encourage job creation in special economic zones and to provide work to more young people.
All private employers registered to pay employees' tax to the South African Revenue Service (Sars) qualify, reported Sake24.
Employers will be able to deduct the incentive amount for which they qualify from the employees' tax they would have to pay to Sars.
Employees who qualify must:
- Be between 18 and 29 years old;
- Work for an employer in a special economic zone as indicated by the finance minister in the Government Gazette;
or
- Work in an industry which has been indicated by the finance minister in consultation with the ministers of labour and trade and industry;
and
- Have an identity document or an asylum seeker permit.
This incentive is not applicable to domestic workers.
During the first year the amount for which could be qualified is half of what the employee earns for employees who earn R2 000 per month or less and R1 000 for employees earning between R2 000 and R4 000.
For employees earning between R4 000 and R6 000 the amount declines, according to a formula, the higher the wage is.
For example, R500 can be claimed for someone earning R5 000. For someone earning R6 000 or more nothing can be claimed.
During the second year the incentive declines by half. An employer is not allowed to receive the incentive after January 1 2017.
In terms of the bill, the finance minister has to disclose information about the scheme twice a year.
Business Leadership South Africa (BLSA) welcomed the scheme and said it would reduce the risk and cost of hiring people seeking work for the first time and who are ill prepared due to poor skills and training. still unprepared it.
For more business news in Afrikaans, see Sake24.com
In his recent mini budget speech Finance Minister Pravin Gordhan said the revised bill is intended to encourage job creation in special economic zones and to provide work to more young people.
All private employers registered to pay employees' tax to the South African Revenue Service (Sars) qualify, reported Sake24.
Employers will be able to deduct the incentive amount for which they qualify from the employees' tax they would have to pay to Sars.
Employees who qualify must:
- Be between 18 and 29 years old;
- Work for an employer in a special economic zone as indicated by the finance minister in the Government Gazette;
or
- Work in an industry which has been indicated by the finance minister in consultation with the ministers of labour and trade and industry;
and
- Have an identity document or an asylum seeker permit.
This incentive is not applicable to domestic workers.
During the first year the amount for which could be qualified is half of what the employee earns for employees who earn R2 000 per month or less and R1 000 for employees earning between R2 000 and R4 000.
For employees earning between R4 000 and R6 000 the amount declines, according to a formula, the higher the wage is.
For example, R500 can be claimed for someone earning R5 000. For someone earning R6 000 or more nothing can be claimed.
During the second year the incentive declines by half. An employer is not allowed to receive the incentive after January 1 2017.
In terms of the bill, the finance minister has to disclose information about the scheme twice a year.
Business Leadership South Africa (BLSA) welcomed the scheme and said it would reduce the risk and cost of hiring people seeking work for the first time and who are ill prepared due to poor skills and training. still unprepared it.
For more business news in Afrikaans, see Sake24.com
