CLAIMING THE AVAILABLE ETI

10. EMP201 Monthly Return completion
In order to ensure that the calculated ETI are reflected on the SARS account of the employer, the employer must ensure that the monthly EMP201 return is completed correctly.
The following ETI fields are found on the EMP201 return under the column “ETI CALCULATION”:
• ETI brought forward
• ETI calculated
• ETI utilized
• ETI carry forward

Note: The “ETI Brought Forward” and “ETI Carry
Forward” fields are locked as they are programmatically
populated according to the information completed in the
“Calculated” and “Utilised” fields.

If the employer does not complete the ETI calculated and ETI utilised fields correctly, then the ETI excess amounts (if any) will not be recorded and the ETI brought forward and ETI carry forward fields will be incorrect.

Example:
Month PAYE liability ETI BF ETI calculated ETI utilized ETI CF
Mar 1250.00 0.00 1500.00 1250.00 250.00
Apr 1250.00 250.00 250.00 0.00
May 1250.00 0.00 3000.00 1250.00 1250.00
Jun 1250.00 1250.00 1500.00 1250.00 1500.00
Jul 1250.00 1500.00 1500.00 1250.00 1750.00
Aug 1250.00 1750.00 1250.00 500.00
Sep 1250.00 0.00 1500.00 1250.00 250.00
Oct 1250.00 250.00 1500.00 1250.00 500.00
Nov 1250.00 500.00 1500.00 1250.00 750.00
Dec 1250.00 750.00 1500.00 1250.00 1000.00
Jan 1250.00 1000.00 1500.00 1250.00 1250.00
Feb 1250.00 1250.00 1500.00 1250.00 1500.00

The ETI brought forward for March and September is zero due to the beginning of the new reconciliation period.

The employer did not complete the ETI calculated field for the month of April, but add the April ETI calculated in the May EMP201 return.

The employer did not complete the ETI calculated field for the month of August and this calculated ETI for August cannot be added in the subsequent month due to the provisions of section 9(4) which state that if it is not claimed in the same reconciliation period, it is forfeited.

The ETI carried forward at the end of August and February will be refunded by SARS to the employer.

The ETI utilised field for each month may not exceed the PAYE liability for that month.

The sum total of the ETI brought forward and ETI calculated may be claim in a specific month, PROVIDED that the PAYE liability is equal or greater than this total.
Where the PAYE liability is less than this sum total, the claim for the month will be limited to the PAYE liability amount and the excess will be treated as ETI carry forward.

Important rules in respect of ETI claims on the monthly EMP201 return

a) EMP201 not requested on eFiling
When an EMP201 is not yet requested on eFIling, the employer can complete all the relevant ETI fields on the EMP201 without any issues although the rules as discussed must be adhered to.
However, if the employer is not compliant, the ETI UTILISED field will be locked and the employer will not be able to complete this field.

b) EMP201 not submitted (saved) on eFiling
Where an EMP201 was saved on eFiling and the employer need to change any figures on such saved EMP201, the eFiling system will only allow the employer to change the ETI calculated value if such value is more than the value completed on the saved EMP201 if the employer is compliant and the due date of the relevant return is in the future.
If the eFIling system do not allow the changed value, the employer may use the REFRESH HISTORIC DATA button on the EMP201 WORK PAGE in order to reset the values previously completed on the EMP201.

c) EMP201 submitted on eFiling
Where an EMP201 was already submitted on eFIling and the employer need to change any figures on such saved EMP201, the eFiling system will only allow the employer to change the ETI calculated value if such value is more than the value completed on the submitted.
11. EMP501 Reconciliation Return completion
The purpose of the EMP501 reconciliation return is to match the totals of all figures declared on IRP5/IT3(a) certificates during the reconciliation period with the totals declared on the monthly EMP201 returns, such as —
• PAYE declared on tax certificates (code 4102) match with PAYE liabilities on all EMP201’s;
• UIF declared on tax certificates (code 4141) match with UIF liabilities on all EMP201’s;
• SDL declared on tax certificates (code 4142) match with SDL liabilities on all EMP201’s; and
• ETI calculated on tax certificates (code 4118) match with ETI calculated values on all EMP201’s.

 
The PAYE liabilities on the FINANCIAL PARTICULARS portion of the EMP501 is carried forward for each month on the ETI details screen of the EMP501 as the employer is only allowed to reduce the PAYE with the ETI available amount in any specific month.

The PAYE PAYABLE column (last column) on the ETI details screen, is the result of the PAYE liability LESS ETI utlised for that specific month. The total of all ETI on all tax certificates is reflected in the bottom field.

Each tax certificate with ETI values has it separate ETI values for each month and the Total ETI CALCULATED must be equal to the value of code 4118 on the relevant tax certificate.
The PAYE BRS deals with all the validation rules relating to ETI.
12. ETI VALIDATION RULES – PAYE BRS
This section only covers the validation rules according to the SARS PAYE BRS version 22.0 which relates to ETI (outside the COID-19 periods).
Code Field name Description and important rules
3026 ETI indicator • Indicates that the tax certificate contains ETI values
• Value can only be Y (yes) or N (no)
• Not to be printed on the employee’s tax certificate copy
• Only valid if the year of assessment is 201402 or greater
• If the employer SIC7 code is listed in Appendix D of the PAYE BRS then the employer is not a qualifying employer and this code cannot have a Y value if the employee does not qualify with the age test
• Y is only valid if the employee —
o Has a valid SEZ code (7009); or
o Or is not younger than 18 or older than 29; and
o Has a valid ID number/alternate ID; and
o Employment date (3190) is >30/09/2013
3190 ETI employment date • Initial date the employee was employed by the employer or associated employer
4118 ETI calculated • Sum of all calculated ETI amounts for the employee during the relevant reconciliation period
7006 Month indicator • Indicates the month in the reconciliation period
• Value can only be 01-12
• If the employee qualifies for any month in the reconciliation period, then the information for every month in that reconciliation period must be completed (including the non-qualifying months)
7005 ETI qualifying 12 month cycle indicator • Indicates the qualifying month cycle in the 1-24 months for which an employer may claim ETI for a qualifying employee (e.g. 1st 12 month period or 2nd 12 month period)
• 0 should be used if the employee did not qualify for that specific month
• 1 should be used if the specific month falls within the 1st 12 month period (1-12 month counter)
• 2 should be used if the specific month falls within the 2nd 12 month period (13-24 month counter)
• Only applicable if the ETI employment date is >30/09/2013
7009 ETI SEZ code • Code of the SEZ in which the employer operates through a fixed place of business within which the employee mainly renders services to that employer
• Invalid if this SEZ code is not one of the gazetted SEZ’s (appendix E)
7007 ETI hours • Actual hours employed and remunerated
• Value cannot be greater than 160 – If greater than 160, then report 160
7002 ETI monthly remuneration • Actual ETI monthly remuneration paid to the employee for the specific month
7003 Minimum wage • Indicates the minimum wage used by the employer to determine if the employer complies with the “wage test) which is the HIGHER of National minimum wage or Wage regulating measure
• This rate can either be an hourly rate, monthly rate, etc. (same unit used in code 7008 must be used)
• if the employer is exempt from the National Minimum wage AND no wage regulating measure is applicable, zero must be reported
7008 Wage paid • Zero must be reported for non-qualifying months
• Actual wage paid to the employee for a specific qualifying month
• Same unit used under code 7003 must be used for this field (example, if an hourly rate was used, then this must also be an hourly rate)
7004 Monthly calculated ETI • Indicates the amount of the ETI calculated for the specific month for the employee
• If it is the 1st 12 month cycle (month count 1-12), then the value cannot be greater than R1500
• If it is the 2nd 12 month cycle (month count 12-24), then the value cannot be greater than R750

Note: Although only rules relating to ETI directly are covered in this section, the other validation rules relating to tax certificates as specified in the SARS PAYE BRS must be applied to all tax certificates issued by an employer during the reconciliation process.