If a 24 year old employee worked for 10 months and then left for 2 months. He then returned and worked a further 12 months. Do we claim the 1st 2 months at R1000 and the following 10 months at R500 a month? I ask because in the SARS webinar this morning
Important:
This answer is based on tax law year ending 28 February 2019.
Answer:
In terms of the legislation, section 7(2), the employer will qualify for employment tax incentive “during each month of the first 12 months in respect of which an employer employs a qualifying employee”, if the monthly remuneration of the employee is within the prescribed ranges. The same applies, see section 7(3) during each of the 12 months after the first 12 months that the same employer employs the qualifying employee.
SARS provides the following answer to the question:
“What do I do if an employee doesn't qualify each month?”
“In determining the first or the second 12 month period, only the months in which the employee qualifies are taken into account.
For example, the employee may be a qualifying employee in the first three months but not in the fourth and fifth months. If the employee is a qualifying employee in the sixth month, the sixth month is month number four as far as the 12 month period is concerned.”
On that basis, in respect of the employee in your example, the employer would, in the next 2 months will also qualify for the R1 000.