Employment Tax Incentive (ETI) Eligibility by SIC Code - Complete Guide
Which SIC codes qualify for the Employment Tax Incentive in South Africa? Complete list of eligible and excluded codes, claiming process, and requirements.
The Employment Tax Incentive (ETI) is one of South Africa's most important job creation tools. Introduced in January 2014 under the Employment Tax Incentive Act (No. 26 of 2013), it provides a tax incentive to employers who hire young workers aged 18 to 29 who earn less than R6,500 per month. The incentive reduces the amount of PAYE (Pay-As-You-Earn) tax the employer must pay to SARS, effectively subsidising the cost of employing young people.
How the ETI Works
Employers can claim up to R1,000 per month per qualifying employee during the first 12 months of employment, and up to R500 per month during months 13 to 24. After 24 months, no further ETI can be claimed for that employee. The incentive is claimed through the monthly EMP201 return submitted to SARS.
The maximum benefit per qualifying employee over the full 24-month period is R18,000 (R12,000 in year one plus R6,000 in year two). For employers hiring multiple young workers, this can represent a significant cost saving.
SIC Code Eligibility
Almost all SIC codes qualify for ETI. The only codes excluded are those in the public administration and defence sector - specifically:
National Government:
84111 - General public administration at National Government level
84121 - Regulation of health, education at National Government level
84131 - Regulation of businesses at National Government level
84231 - Public order and safety at National Government level
Provincial Government:
84112 - General public administration at Provincial Government level
84122 - Regulation of health, education at Provincial Government level
84132 - Regulation of businesses at Provincial Government level
84232 - Public order and safety at Provincial Government level
Local Government:
84113 - General public administration at Local Government level
84123 - Regulation of health, education at Local Government level
84133 - Regulation of businesses at Local Government level
84233 - Public order and safety at Local Government level
Other excluded codes:
84140 - Extra-budgetary accounts n.e.c.
84210 - Foreign affairs
84220 - Defence activities
84300 - Compulsory social security activities
In total, only 16 SIC codes are excluded. This means that over 97% of all SIC codes - including all private sector codes - are eligible for ETI.
Qualifying Employee Requirements
Beyond the SIC code requirement, the employee must meet these criteria:
| Aged 18 to 29 at the time the employer claims the incentive
| Employed on or after 1 October 2013
| Earns a monthly wage of at least the National Minimum Wage (currently R27.58/hour) but not more than R6,500
| Has a valid South African ID number or asylum seeker permit
| Is not a domestic worker or employed in the excluded SIC codes
| The employer is not connected to the employee (no family members)
How to Claim
ETI is claimed on the EMP201 monthly employer return submitted to SARS. The incentive amount reduces your PAYE liability. If the ETI amount exceeds your PAYE liability, the excess is carried forward to the next month within the same six-month period (either March-August or September-February). Any remaining excess at the end of the six-month period is refunded or offset against other tax liabilities.
Check Your Code
Every SIC code page on ZA Codes displays the ETI eligibility status. Browse the SIC Code Index and click on any code to see whether it qualifies.