Employment tax incentive (ETI)
The Employee Tax Incentive (ETI) is a tax incentive introduced to encourage employers to employ youth (18 to 29 years old). The ETI allows employers a benefit of up to R18,000 per year for every qualifying youth employed. The ETI was introduced to help make it more affordable for businesses to appoint new staff and assist young job seekers to find employment.
Additional deduction for learnership agreements (Section 12h income tax act 58 of 1962)
Section 12H provides additional deductions to employers for SETA-registered learnership agreements. Training contracts qualifying for these deductions are learnership agreements and apprenticeships registered with a SETA. These additional deductions consist of an annual allowance and a completion allowance.
Auditors would calculate the allowances and offset this against the organisation’s Income Tax
Learnership Allowance (Section 12H of the Income Tax Act)
| Benefit | Allowance |
| An annual allowance, the employer is entitled to the first deduction in the year of assessment in which a learner is a party to a registered learnership agreement. | Annual allowance up to R40 000 per learner |
| The annual and completion allowances are increased for a learner who has a “disability” as defined in section 6B(1) at the time of entering into the learnership agreement. | Disability allowance up to R30 000 per learner |
| A completion allowance, the employer is entitled to the first deduction in the year of assessment in which the learner successfully completes the learnership. | Completion allowance up to R40 000 per learner |
