Employment Tax Incentive (ETI) 2025: How SA Employers Can Save Up to R39,000 Per Hire

Here's something most South African employers don't know: SARS will literally reduce your PAYE bill when you hire a young person. It's called the Employment Tax Incentive (ETI), and it could save you up to R39,000 per qualifying hire over two years.

Yet most small and medium businesses in SA have never claimed it. Some don't know it exists. Others think it's too complicated. It's not. Here's everything you need to know.

What is the Employment Tax Incentive (ETI)?

The ETI is a government incentive designed to encourage employers to hire young workers. Introduced in January 2014 and extended multiple times, it allows employers to reduce their monthly PAYE (Pay As You Earn) payments to SARS based on each qualifying employee they hire.

Think of it this way: instead of paying your full PAYE bill every month, SARS says "hire a young person, and we'll knock money off what you owe us."

The programme currently runs until 28 February 2029.

Updated ETI Rates (From 1 April 2025)

The ETI amounts were increased from 1 April 2025 to keep pace with National Minimum Wage increases. Here are the current rates:

Important: Employees earning above R7,500 per month do not qualify for ETI at all.

Who Qualifies for ETI?

Employee Requirements

The employee must:

• Be aged 18 to 29 years old
• Have a valid South African ID, asylum seeker permit, or refugee document
• Earn less than R7,500 per month
• Work at least 160 hours per month for the full incentive (pro-rated for fewer hours)
• Not be a connected person to the employer (not a relative or business partner)
• Not be a domestic worker

Employer Requirements

The employer must:

• Be registered for PAYE with SARS
• Be a private sector employer (government and public entities excluded)
• Be tax compliant with SARS filings and payments
• Not have displaced existing employees to claim ETI
• Comply with labour law obligations, including paying at least the minimum wage

How Much Can You Actually Save?

Let's look at realistic examples for frontline workers in South Africa:

Now imagine you hire 5 qualifying workers through ShiftMate. That's potentially R135,000 in PAYE reductions over two years.

How to Claim ETI

Claiming ETI is simpler than most employers think:

1. Calculate the monthly ETI for each qualifying employee based on their salary and employment period
2. Reduce your monthly PAYE payment by the total ETI amount
3. Complete the ETI field on your EMP201 (the monthly employer return you already submit)
4. Submit to SARS by the 7th of each month

That's it. No separate application. No special forms. You simply pay less PAYE each month.

How ShiftMate Makes ETI Easy

This is where ShiftMate gives you an unfair advantage over every other hiring platform in South Africa.

When candidates register on ShiftMate, we automatically verify their SA ID number and calculate their age. When you browse candidates or receive matches, each profile clearly shows an ETI-Verified badge if they qualify.

Here's what that means for you:

• No guesswork — you can see at a glance which candidates will save you money
• No paperwork — we've already verified their age eligibility
• Informed decisions — when two candidates are equally good, the one with an ETI badge saves you up to R27,000
• Trial before you commit — use ShiftMate's Working Interview to see them actually work before making the permanent hire that triggers ETI

Compare that to a recruitment agency charging R15,000 to R50,000 with no ETI support, no trial period, and no guarantee the person will actually be good at the job.

Common ETI Mistakes to Avoid

1. Not checking age properly — The employee must be 18-29 at the time of employment. ShiftMate verifies this automatically from SA ID numbers.
2. Claiming for employees earning above R7,500 — Even R7,501 disqualifies them entirely.
3. Forgetting to pro-rate for part-time workers — If they work fewer than 160 hours, the ETI must be reduced proportionally.
4. Displacing existing staff — If SARS suspects you fired someone to hire a younger, ETI-eligible replacement, you could face penalties and be barred from claiming.
5. Not being tax compliant — If your SARS account is in arrears, you cannot claim ETI. Get your house in order first.

ETI + Working Interviews: The Smart Hiring Strategy

Here's the strategy savvy SA employers are using:

1. Post a trial job on ShiftMate — free to post, from R1,025 for a 2-week trial
2. Filter for ETI-eligible candidates — look for the ETI-Verified badge on profiles
3. Run the Working Interview — see them actually do the job for 2-12 weeks
4. Make the permanent hire — only R1,500 additional placement fee
5. Start claiming ETI immediately — reduce your PAYE from month one

You've now hired someone you've seen work, who is ETI-eligible, for a fraction of what a recruitment agency charges. And SARS is paying you back every month for two years.

Frequently Asked Questions

Can I claim ETI for employees I have already hired?

Yes, but only for their first 24 months of employment. If you hired a 25-year-old six months ago and have not been claiming, you can start now and claim for the remaining 18 months.

Does the employee need to know I am claiming ETI?

No. ETI is between the employer and SARS. It does not affect the employee's salary, tax, or employment terms in any way.

What if the employee turns 30 during employment?

You can continue claiming for the remainder of their 24-month qualifying period. The age check is done at the start of employment.

Can I claim ETI for part-time workers?

Yes, but the amount is pro-rated. For example, if they work 80 hours instead of 160, you claim 50% of the normal ETI amount.

Is ETI available for all industries?

Yes, all private sector employers registered for PAYE can claim ETI, regardless of industry. Restaurants, retail, call centres, warehouses, manufacturing — all qualify.

How long does the ETI programme run?

The current extension runs until 28 February 2029. It has been extended multiple times since its introduction in 2014, and given South Africa's youth unemployment crisis, further extensions are likely.

The Bottom Line

The Employment Tax Incentive is free money that most SA employers leave on the table. If you are hiring frontline workers aged 18-29 earning under R7,500/month, you should be claiming it.

ShiftMate makes this easy by automatically flagging ETI-eligible candidates so you do not have to do the maths yourself. Combined with our Working Interview model, you get the safest, most cost-effective hiring process in South Africa.