Employment Tax Incentive (ETI) > Qualifying Wage

One of the criteria for qualifying employees for ETI is that they must earn greater than the wage regulating measure. This article details how the qualifying wage is calculated.

Please note:

There is a difference between the concept of wage and remuneration for the purposes of calculating ETI:

  • An employee’s wage is the amount they are paid in respect of their ordinary hours of work and is determined by the employment agreement – it is used to determine whether or not they meet the minimum wage criteria and therefore qualify for ETI.
  • Their remuneration is the actual amount that they are paid at the end of the period and is used to calculate the amount of ETI that the employer may claim.

Qualifying Wage

Where an employee’s ordinary hours (as defined below) are greater than or equal to 160, their wage (as defined below) will be compared to the minimum wage to determine if the employee qualifies for ETI.

Where an employee’s ordinary hours (as defined below) are less than 160, their wage (as defined below) must be grossed up before comparing it to the minimum wage. An employees wage is grossed up as follows:

Wage * 160 / Ordinary hours

Wage

An employee’s wage is calculated as follows:

Salaried Employees
Wage
= Basic salary
– Unpaid leave
– Amounts of short pay
————————————————————-
Hourly Paid Employees
Wage
= Basic Hourly Pay (pay for normal hours worked)
+ Leave pay for paid leave types
+ Amounts paid for public holidays not worked that fall on a working day

Ordinary Hours

Salaried Employees
Ordinary hours
= Hours as per Regular Hours page
– Unpaid leave hours
– Short pay hours
————————————————————-
Hourly Paid Employees
Ordinary hours
= Normal hours (as entered for Basic Salary under Payslip Inputs)
+ Leave hours taken for paid leave types
+ Regular working hours for public holidays not worked
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