Tag: PAYE

Youth Day 2025: SARS Will Reduce Your PAYE Bill When You Hire Young People — Here’s How

Every year on 16 June, South Africa pauses to remember the students of Soweto who marched in 1976. Young people who demanded better. Young people who paid an enormous price for it. It feels right, on that day, to ask what we’re actually doing for young South Africans today. The numbers are uncomfortable. Youth unemployment in South Africa sits above 45%. That means nearly half of people between the ages of 15 and 34 who want to work can’t find it. For many of them, the problem isn’t ability or willingness — it’s the gap between leaving school and getting that first chance. Employers can help close that gap. And SARS will reduce your tax bill when you do. What is the Employment Tax Incentive? The Employment Tax Incentive — most people call it the ETI — was introduced in 2014 specifically to encourage South African employers to hire young, less experienced workers. It works by letting you reduce the amount of PAYE you remit to SARS each month, based on how many qualifying young employees you have on your payroll. It doesn’t reduce what your employee earns. Their salary stays exactly the same. The saving comes off your tax liability. The ETI has been extended and is currently available until 28 February 2029, with updated thresholds that came into effect on 1 April 2025. Who qualifies? For an employee to qualify, they need to meet a few criteria: Age: Between 18 and 29 years old at the end of the month you’re claiming for. There’s no upper age limit if your business operates in a Special Economic Zone. ID documentation: A valid South African ID, asylum seeker permit, or ID issued under the Refugees Act. Salary: Their monthly remuneration must fall between R2 500 and R7 500. The incentive tapers to zero above R7 500. Employment date: They must have been employed on or after 1 October 2013. Not a connected person: You can’t claim ETI for a family member or someone who is a connected person in relation to your business. Not a domestic worker: Domestic workers are excluded from the ETI. One important point — from 1 March 2025, SARS introduced a 100% penalty on incorrectly claimed ETI amounts. This means it’s worth getting it right. If you’re unsure whether an employee qualifies, ask someone who knows. How much is it worth? Updated from 1 April 2025, the maximum ETI value is R1 500 per qualifying employee per month for the first 12 months of employment, dropping to R750 per month for months 13 to 24. For a business with three qualifying young employees, that’s potentially R4 500 off your PAYE bill every month in year one. R54 000 over the first year. It’s real money. The calculation tapers as salary increases — the full R1 500 applies to employees earning between R2 500 and R5 500 per month. Above R5 500 it reduces, reaching zero at R7 500. How do you claim it? There’s no separate application form. No special process. You simply calculate the ETI amount for each qualifying employee and offset it against your monthly PAYE payment when you submit your EMP201. That’s it. If the total ETI exceeds what you owe in PAYE for that month, the excess rolls over to the next month. SARS will also pay out any remaining balance twice a year. The tricky part is making sure your payroll system is set up to calculate ETI correctly, track the 24-month employment window per employee, and apply the right formula at the right salary band. It’s not complicated when it’s set up properly — but if it’s not set up at all, you’re just leaving money behind. Most employers who qualify aren’t claiming it That’s the part that surprises people. The ETI isn’t new, it isn’t obscure, and it’s not hard to access — but a large number of small and medium businesses in South Africa have never claimed it. Some don’t know it exists. Some think it’s for bigger companies. Some assume their payroll software handles it automatically when it doesn’t. If you employ people between the ages of 18 and 29, earn below the salary threshold, and hold valid South African ID — there’s a reasonable chance you have qualifying employees right now and aren’t claiming the incentive. This Youth Day, it’s worth checking The class of 1976 marched for opportunity. The least we can do is use the tools available to us to create some. If you’re not sure whether your business is claiming ETI correctly — or at all — we’re happy to take a look. We’ve been managing payroll compliance for South African businesses for 35 years. Getting this right is exactly what we do. 021 001 7240 | help@payslip.co.za

Before You Hand Over Your Payroll — Know Who You’re Dealing With

There are a lot of companies using the word “payslip” out there right now. Some of them have websites that look professional. Some sell software, templates, or outsourcing services. And some of them, when you look a little closer, have almost no information about who they actually are. No company registration number. No phone number. No physical address. No full trading name. Just a website, a product, and a place to put in your card details. That should give any business owner pause. Payroll is not the place to take chances Your payroll touches everything. It determines whether your employees get paid correctly and on time. It affects your SARS compliance — your PAYE submissions, your UIF contributions, your EMP201s. If something goes wrong, the consequences land on your business and on the real people waiting for their salaries. Handing that responsibility to someone you can’t verify, trace, or call is a risk that simply isn’t worth taking. What to check before you trust a payroll provider Before you buy software, sign up for a service, or hand over any payroll data — ask these questions: Can you find their company registration number? Every legitimate South African company has one. It should be on their website, their invoices, and their correspondence. If you can’t find it, that’s a problem. Is there a phone number — and does someone answer it? An email address is not the same as being reachable. Call them. See what happens. A payroll provider who can’t be reached when something goes wrong is no provider at all. Do they have a physical address? Not a P.O. box. A real address where the business operates. This matters more than people realise — it tells you there are real people, in a real place, doing real work. What is their full trading name? A website name and a registered company name are not the same thing. Know who you’re actually contracting with. How long have they been around? Payroll compliance in South Africa is not simple. Tax tables change. Labour law updates. SARS requirements shift. Experience matters — not just in building software, but in understanding what happens when things don’t go according to plan. Why we’re telling you this We’ve been doing this since 1989. Payslip Software Solutions (Pty) Ltd is a registered South African company. You can call us at 021 001 7240 and a real person will pick up. Our full company details are on our website, our emails, and every piece of correspondence we send. We’ve been building trust with South African businesses for over 35 years — and that trust isn’t something we take lightly. We’re not writing this to scare anyone. We’re writing it because we’ve recently become aware that there are companies using names similar to ours, and some of them don’t meet the basic transparency test we’ve described above. You deserve to know who you’re dealing with. Especially when it comes to payroll. The original is still here There are newer, shinier options in the market every year. Some of them are good. Some of them are not what they appear to be. We’re not going anywhere. We’ve been here through democratic transitions, financial crises, a global pandemic, and more SARS system changes than we care to count. If you’re evaluating your payroll options, we’d love to chat. And whoever you go with — please do your homework first. 💚 payslip.co.za | 021 001 7240 | help@payslip.co.za