Employment Tax Incentive Update April 2025
As part of the 2025 Budget Review, the Minister of Finance announced updates to the Employment Tax Incentive (ETI) aimed at supporting youth employment while ensuring continued affordability for employers.
In terms of section 7 of the Employment Tax Incentive Act, the Minister is authorised to adjust ETI values during the annual budget process. These adjusted rates remain valid for 12 months and will only be finalised if Parliament passes the necessary legislation within that period. If not, the ETI rates will revert to their previous values.
These changes were published in the Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill on 19 March 2025 and take effect from 01 April 2025.
Key Amendments to the ETI effective 01 April 2025:
- Qualifying monthly remuneration threshold: Employees earning R7 500.00 or more per month (previously R6 500.00) will not qualify for ETI.
- Wage test criteria: To qualify, employees must be paid at least the minimum wage. This is the highest of:
- The national minimum wage under the National Minimum Wage Act.
- The minimum wage according to the wage regulating measure (sectoral determination, bargaining council agreement, or collective agreement).
- If no wage regulating measure applies and the employer has been granted an exemption from the National Minimum Wage Act, then the employee must earn at least R2 500.00 for a full month (160 ordinary employed and remunerated hours). This amount was previously R2 000.00.
- Updated ETI Table: A revised ETI calculation table, reflecting the new thresholds.
Click here to access the South Africa ETI Calculator 2025/2026 – March 2025.
Click here to access the South Africa ETI Calculator 2025/2026 – effective from April 2025.
Click here to access the Draft Bill.
Summary of Change
Monthly ETI Remuneration
First 12 months
Second 12 Months
R0 – R2 499.99
60% of monthly ETI remuneration.
30% of monthly ETI remuneration.
R2 500.00 – R5 499.99
R1 500.00
R750.00
R5 500.00 – R7 499.99
R1 500.00 – (75% x (monthly ETI remuneration – R5 500.00))
R750.00 – (37.5% x (monthly ETI remuneration – R5 500.00))