Overview
1. Revised ETI Covid-19 Relief Measures
- ETI Conversion and Report
- Minimum Wage Test
- Monthly Remuneration
- Qualifying Employee
- Employment Tax Incentive Table
- ETI Calculations
2. SDL Contribution Holiday
- Basic Company Information
- SDL Calculation
3. Other Covid-19 Related Items
- TERS Payouts – Payroll Setup
Important Notice
When you go into a company licenced for Tax Country: South Africa, an Important Notice will come up containing the following information:
This notice will be displayed each time you access the company until you acknowledge the message at the bottom of the screen. You can print this screen for reference purposes
1. Revised ETI Covid-19 Relief Measures
Release 5.4b had to have been installed during your processing period for April.
A revised ETI Tax Table was released on 6 May for Release 5.4b. However, this table has been revised again since then and the latest version is part of this release.
Release 5.4c MUST have been installed during your processing period for May.
This sequence will have ensured that ETI recalculations were automatically applied during
the conversion process to Release 5.4c.
Employees who have ETI values that have been recalculated during conversion for April are listed on the ETI COVID Report found on: Main Menu > Reports > Audit Reports > ETI COVID Report
The report will open in Excel and reflect the value before the recalculation and the values
after the ETI recalculation for all employees with changes.
Please use this report to determine who has been recalculated and to confirm you agree with the recalculated values.
The R2000 wage for a full month (i.e. at least 160 employed and remunerated hours) will not apply to employees for the period 1 May 2020 – 31 July 2020, where the employer is taking advantage of the ETI COVID-19 relief measures (and registered for employee’s tax on or before 25 March 2020). The wording, ‘higher of’, has been removed.
All employees must be linked to a Minimum Wage Code and the Wage Regulating Measure/National Minimum Wage must be selected (ticked) on the Employee ETI Tab. If not – NO ETI will calculate for the period 1 May – 31 July 2020.
Refer to R5.4a Release Notes for detailed steps on how to create the Minimum Wage Code and on activating the Wage Regulation Measure/National Minimum Wage flag.
If an employee is employed and remunerated for less than 160 hours in a month, no remuneration gross-up will be done to 160 hours and the actual remuneration will be used in all cases (irrespective of amount of employed and remunerated hours). Effective from 1 May 2020 – 31 July 2020 for employers who are registered for employee’s tax on or before 25 March 2020.
Example:
It is still required from employers to capture/indicate the ‘employed and remunerated’ hours i.r.o remuneration (ordinary/contractual, unpaid and additional hours) but just for this three-month period, remuneration should not be grossed-up (irrespective of employed and remunerated hours value).
However, the employed and remunerated hours will still be used to pro-rata the ETI amount.
The Gross-up of remuneration will be determined by the ETI Table that is applied.
Effective date: 1 April 2020 – 31 July 2020
The ‘date of engagement’ qualifying criteria of ‘employed on/before 1 October 2013 by
the employer or associated person’ has been removed.
Therefore, the following groups of people will qualify for additional ETI:
Columns 1 and 2 (refer to ETI Table below):
– Qualifying employee aged 18 to 29 years old on the last day of the calendar month
who was employed on or after 1 October 2013 .
– Qualifying employees who qualify according to the SEZ criteria, irrespective of date
engaged.
Column 3 (refer to ETI Table below):
– Qualifying employee aged 18 to 29 years old on the last day of the calendar month
who was employed on or after 1 October 2013 who has qualified 24 times.
– Qualifying employee who qualifies according to the SEZ criteria (irrespective of
date of engagement) who has already qualified 24 times.
– Qualifying employee aged 18 to 29 years old on the last day of the calendar month
who was employed before 1 October 2013.
– Qualifying employee aged 30 to 65 years old on the last day of the calendar month
(irrespective of date of engagement).
The Employment Tax Incentive Table has been amended to accommodate the Additional ETI Relief.
The table on the Employee ETI History Summary Tab has remained unchanged and is
applicable:
- From 1 January 2020 – 31 March 2020,
- In companies where the Additional ETI Relief tick has not been flagged on the ETI
Company Setup Screen, and - From August 2020.
The <ETI Calc Info> document is found at the bottom of this screen.
The ETI Relief Measures Table was revised for the period 1 April 2020 – 31 July 2020 (4 months). The table below was released on 6 May to recalculate April values. The changes are indicated in red:
However, this table has been revised once again.
Latest ETI Table, valid from 1 April 2020 to 31 July 2020, which is part of this release:
Adjustments to April while in Processing Period for May(applicable for employers
registered for PAYE before/on 25 March 2020 making use of the additional ETI relief
measures):
The values for April values will be amended (recalculated during the conversion process) according to the new table, and considering the:
- Gross-up of remuneration if employed and remunerated hours are less than 160.
- ETI amounts for column 1, 2 (first 24 months) and 3 will be pro-rated if employedand remunerated hours are less than 160.
- New ‘date of engagement’ qualifying criteria will be applied.
- R2000 minimum Wage Test. If an employee is not linked to a Minimum Wage
Code and Wage Regulating Measure is not selected (ticked) for April, ETI values
will be cleared. - There will be no Gross-up of remuneration if employed and remunerated hours are less than 160.
- ETI amounts for column 1, 2 (first 24 months) and 3 (more than 24 employed and remunerated hours are less than 160. Therefore, it is vital that thehours) be captured/indicated in the system for all employees to ensure the correct ETI calculation is applied.
2. SDL Contribution Holiday
Employers who are registered for SDL will be exempt from the SDL liability and payment from 1 May 2020 – 31 August 2020.
According to the SARS FAQ, the SDL liability amount will automatically default to 0.00 on the EMP201 return for the 4-month period.
Main Menu > Company > Basic Company Information Screen
We have made the ‘Period SDL Calculation’ option visible (and not just when you access your system with the VIPSD Password).
During the conversion of your companies, this field has been selected (ticked) and the ‘SDL Percentage’ has been cleared.
Monthly Companies: No SDL will calculate for the current month.
Non-Monthly Companies: No SDL will calculate for the month. If you converted in any week besides week 1, the SDL value in the current period, e.g. week 3 of 4, will be a negative, resulting in the MTD+ value being 0.00.
No SDL will calculate for the subsequent months while the setting is as above.
3. Other Covid-19 Related Items
If the employee receives a payment from a ‘Covid-19 relief fund organisation’, the payment should be processed as an exempt earning using IRP5 code 3602.
Once we get confirmation on what IRP5 code should be used (once the new PAYE BRS is published), it can be changed to the new code.
New IRP5 codes will be implemented in the September 2020 release.
For the interim, define an earning line for ‘Covid-19 relief fund organisation’ as set out in the example below :
