The Employment Incentive Act

The Employment Incentive Act, No 26 of 2013, which took effect on 1 January 2014, encourages private employers to employ young workers (between the ages of 18 and 29) by providing a tax incentive to employers. 

The Act aims to share the costs of employing young workers between government and employers and functions by decreasing the amount of PAYE tax that is payable to SARS for every qualifying employee hired by the employer.

Qualifying employees must:

  • have been hired on or after 1 October 2013,
  • possess a South African ID,
  • receive a monthly salary that is above the relevant minimum wage and less than R6000 per month

Domestic workers and employees connected in some way or related to the employer do not qualify.

The incentive will be paid on a sliding scale and the employer may only claim the incentive for 2 years for each qualifying employee.

If you need assistance or have any questions in this regard, please do not hesitate to contact McCarthy & Associates Attorneys on (033) 266 6170 or admin@mccarthylaw.co.za.