Employment Tax Incentive (ETI) Programme for Unemployed Youth:

Background

The Employment Tax Incentive (ETI) is sponsored by National Treasury and administered by SARS. The programme started in January 2014 and is scheduled to run until February 2029. It was developed to address a specific challenge in South Africa. South Africa has a very high unemployment rate and more specifically the Youth between the ages of 18 and 29 years.

With the promulgation of ETI (Act 26 of 2013) it became part of government’s package of programmes to:

• Incentivize businesses to employ young people (18 – 29)
• Enable youth employability by giving them the opportunity to acquire the requisite skills to be employed

Private companies can therefore appoint eligible unemployed youth as scholar employees for a period of 12 months, on a fixed term contract. The student will be an employee of the company for this period whilst completing his/ her studies. During this period, it is imperative that the ETI appointed scholar-employee adheres to all rules and regulations of the company. This includes regular tasks and assignments that must be completed. These tasks are work-related and does not form part of the chosen Skills programme.

In terms of studies, it is expected of the ETI employee to attend classes, either in the classroom or online platforms and attendance and progress is formally measured, through the signing of an attendance register. It is required of the company to provide these attendance and progress reports to various government and legislative stakeholders. For the period of employment, the ETI employee will be registered for UIF at SARS as well as his/her Skills Development Levy contributions will be paid to SARS. It is therefore important to comprehend that the ETI employee (12 months study period – employment) will not be eligible for any other Grants as offered by Government or certain SASSA claims.

It is not required of the scholar-employee to relocate during the period of 12 months. They will focus on their chosen field of studies and the work-related tasks/assignments as received from the employer. The primary focus of this programme is to offer unemployed youth the opportunity to obtain a Skills Programme qualification that will prepare them for employment. ETI employees will therefore receive a certificate on completion of their accredited course. ETI employees will be allowed to claim UIF benefits for the prescribed period if employment does not realise immediately after completion of studies.