How will the Employment Tax Incentive and the Youth Empowerment Service (YES) work together?
Wednesday, 02 May 2018
These two programmes, the one (ETI) created by and falling under SARS, and the other (YES) by the Department of Trade and Industry, are designed to work together and to compliment one-another.
The target group for the YES and the ETI programmes are identical, namely “Previously unemployed Black people between the ages of 18 and 35”.
A YES Programme is designed as a 12-month Job, with no expectation of gainful employment thereafter, where the job which is created is identical to one of any of the pre-existing jobs in the company. Same pay. Same Conditions of Employment and subject to the same rules and regulations of any employee in that company. The distinguishing feature is that YES targets are over-and-above the Employment Threshold of the year proceeding the introduction of the YES programme. This means that whereas in the 2017/18 year the company had 100 employees on its payroll, in pursuit of YES it would have to add its target e.g. 20 additional 12-month employees to the original Headcount of 100.
An ETI opportunity is the same except that the ETI Candidate is also allowed to be in a full-time Training Programme for those 12 months whereas the amendment out for public comment is silent on whether that is the case also for a YES Candidate. In the absence of clarity, one must assume that it is not the case and that the YES Candidate must be employed in an actual job making a contribution in the workplace.
What the ETI does, is that it allows the Employer to create the YES Jobs, in pursuit of becoming a YES-Certified Employer, by incorporating the ETI advantage. This means by using the R1000 a month PAYE diversion which ETI allows, to offset the costs in creating the new YES position in your company.
Therefore, if the total-cost-of-employment for a new YES job is R5000 a month, the actual cost incurred by the Employer would be R5000 less the R1000 ETI deduction/PAYE-offset, or R4000 a month, for 12 months.
The full R5000 would be counted however as Skills Development Expenditure under 18.104.22.168.