The definition of ETI “monthly remuneration” was changed in the Taxation Laws Amendment Act, effective March 2022. The following provision was added: ETI Remuneration should be calculated as: 

• Remuneration as per the Fourth Schedule of the Income Tax Act
• Minus Fringe benefits, 
• Minus Deductions OTHER that those required as per Section 34(1)(b) of the Basic Conditions of Employment Act

ETI remuneration will only calculate based on the employee’s taxable earnings.

The user will be required to indicate what deductions are used to reduce the ETI remuneration.

To select which deduction definitions should be used to Reduce the ETI Remuneration:

Expand Company Management

Expand Payroll Definitions

Double-click on ETI Remuneration Reduction Definitions

Click on New

The totals of these payroll definitions will be used to reduce the ETI Remuneration.

This functionality was mainly built in to ensure that all Training Costs are excluded, and all earnings that are not cash payments, but added to the payroll as an earning, to calculate PAYE and then deducted again, must reduce the ETI Remuneration.

Example:

• Voucher that is an in and an out payment 
• Training cost paid to the employee, but deducted on the payroll again 
• Shares benefits that are only a in kind payment.

NOTE: It is the responsibility of the employer to determine what definitions should be used to reduce the ETI remuneration.