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As of 1 March 2022, the Minister of Finance has announced an increase in the ETI values, effective from 1 March 2022, are as follows:
Monthly Remuneration of R0 to R1 999.99: 75% of Monthly Remuneration for the first 12 months, 37.5% for the second 12 months
Monthly Remuneration of R2 000 to R4 499.99: R1 500 for the first 12 months, R750 for the second 12 months
Monthly Remuneration of R4 500 to R6 499.99: R1 500 – (75% x (monthly remuneration – R4 500)) for the first 12 months, R750 – (37.5% x (monthly remuneration – R4 500)) for the second 12 months
Youth unemployment is a significant problem in South Africa, with millions of young South Africans excluded from participating in economic activity, and as a result, suffering disproportionately from unemployment, discouragement, and economic marginalization. High youth unemployment means young people are not gaining the skills or experience needed to drive the economy forward. This lack of skills can have long-term adverse effects on the economy. In South Africa, the current lack of skills and experience, as well as perceptions regarding the restrictiveness of labour regulations, make some prospective employers reluctant to hire young people.
The ETI provides a solution to this problem by allowing employers to reduce the cost of hiring young people through a cost-sharing mechanism with the government. Employers who are registered for PAYE and employ a person for the full month of February 2022, who earns R2 000, will get R1 000 off their monthly PAYE liability. The incentive amount differs based on the salary paid to each qualifying employee and whether the qualifying employee was employed after the inception of the ETI program on 1 October 2013. Employers will be able to claim the incentive for a 24-qualifying month period for all employees who qualify.
In addition, employers should also be aware that the ETI program is not a "free money" and it comes with certain responsibilities. Employers must comply with all the requirements of the program, including maintaining accurate records and submitting the required documentation. Employers should also be aware of the potential risks and penalties for non-compliance, including fines and penalties.
In summary, the ETI is a win-win situation for both employers and young work seekers, as it will provide employers with a financial incentive to hire young people, while also providing young people with the opportunity to gain valuable work experience and skills.
It is important to note that the ETI program is not a substitute for creating jobs and improving the overall economic conditions in South Africa. The program is an additional incentive to help address the issue of youth unemployment, but it is not a long-term solution. The government and private sector must continue to work together to create jobs and improve the overall economic conditions in South Africa.
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