South Africa | New ETI Rates (Effective 1 April 2025)
As announced in the 2025 Budget Review on 12 March 2025, the government has introduced updates to the Employment Tax Incentive (ETI) rates. These changes align with the latest minimum wage updates and aim to support youth employment while maintaining affordability for employers.
Under section 7 of the Employment Tax Incentive Act, the Minister of Finance has the authority to adjust ETI rates during the annual budget speech.
Once announced, these changes take effect from the specified date and remain valid for 12 months. If Parliament does not pass legislation to formalise the adjustment within this period, the rates will revert.
The updated ETI rates have been published in the Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill.
Key Changes
- One of the qualifying criteria for an employee to qualify for ETI (amongst others) is that the employee must be paid at least the minimum wage, which is the higher of the national minimum wage or wage as per the wage regulating measure. If the employer is exempt from the National Minimum Wage Act and there is no wage regulating measure, then the employee must earn at least R2 500 for a full month (R2 000 before 1 April 2025). A full month means 160 ordinary employed and remunerated hours.
- An employee must also earn monthly ETI remuneration of less than R7 500 (R 6500 before 1 April 2025) to qualify for the incentive. A full month means 160 employed and remunerated hours.
- New ETI table effective 1 April 2025:
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