· Built around the Employment tax incentive calculator
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Employing people in South Africa comes with four sums that most new employers only meet when a letter arrives: the Employment Tax Incentive (ETI) that pays you back for hiring young people, the COIDA assessment the Compensation Fund sends every year, the section 12H allowance for learnerships, and the CIPC annual return that keeps the company alive. This post works through each one with the ETI, COIDA, learnership allowance and CIPC annual return calculators.
Run your own numbers
The ETI calculator starts on the first example: R6 000 a month for 195 hours, in the employee's first 12 months, aged 18 to 29. Type your own payroll figures.
Checked against a published example
Every calculator in this post was run on the inputs of an official worked example or rule table and gave the same answer:
- ETI: R6 000 for 195 hours in the first 12 months gives R1 500 - 0.75 x (R6 000 - R5 500) = R1 125 - SARS Guide to the Employment Tax Incentive (Issue 5), the formula table in force from 1 April 2025. Our ETI calculator gives R1 125.00.
- COIDA: earnings capped at R668 000 per employee from 1 March 2026, minimum R1 621, domestic employers R560 - General Notice 3910, Government Gazette 54577 (24 April 2026). Our COIDA calculator gives R15 340.00 on the example below.
- Learnership: 3 months of a learnership in the year gives R10 000, a 30-month learnership completed gives R80 000 - SARS Interpretation Note 20 (issue 9), Examples 2 and 5. Our learnership calculator gives the same R10 000 and R80 000.
- CIPC: R450 on time and R600 late for a company turning over R1 million to R10 million - CIPC Annual Returns FAQ. Our CIPC calculator gives R1 650 for this year plus two missed years.
No calculator needed a fix for this post.
Worked example 1: the ETI on a young hire
- Who qualifies: employees aged 18 to 29, paid at least the minimum wage and less than R7 500 a month, employed on or after 1 October 2013, and not a connected person (ETI calculator).
- First 12 months on R6 000 for 195 hours: R1 125 a month - R6 000 is above R5 500, so the R1 500 maximum is cut by 75 cents for every rand over.
- Next 12 months: R750 - 0.375 x R500 = R562.50 a month. The incentive halves in the second year and stops after 24 qualifying months.
- Two years for one hire: R1 125 x 12 + R562.50 x 12 = R20 250, taken off the PAYE you pay over on the EMP201.
- Part-time: R3 000 for 96 hours is grossed up to R5 000 for 160 hours, then the R1 500 is scaled back: R1 500 x 96 / 160 = R900 a month.
- Under the minimum wage, nothing: R4 000 for 195 hours is R20.51 an hour - below the R30.23 national minimum - so the ETI is R0.
- The incentive is scheduled to end on 28 February 2029. Hires after that date earn nothing.
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Worked example 2: the COIDA assessment
- COIDA is paid on what you paid your staff last year, at your industry's tariff per R100 of earnings (COIDA calculator). The Compensation Fund sends the tariff with your assessment.
- Each person's pay counts only up to R668 000 a year from 1 March 2026 - a manager on R900 000 counts as R668 000.
- R2 400 000 of staff pay under the cap + 1 manager at R668 000 = R3 068 000. At R0.50 per R100: R3 068 000 x 0.50 / 100 = R15 340.
- Small payrolls pay the minimum: R1 621 for an ordinary employer, whatever the sum works out to.
- A domestic employer with R60 000 of pay at R0.50 works out to R300, so the R560 minimum applies.
- The two young hires from example 1 add 2 x R72 000 = R144 000 of pay, about R720 of COIDA at R0.50 - against R27 000 of ETI in their first year.
Worked example 3: the learnership deduction
- Section 12H gives an employer an extra tax deduction for a registered learnership, on top of the wages it already deducts (learnership calculator).
- Annual allowance for NQF 1 to 6: R40 000 a year, pro rata - 3 full months in the year is 3 / 12 x R40 000 = R10 000.
- Completion allowance: R40 000 for each full 12 months of the agreement - a 30-month learnership finished this year is R40 000 x 2 = R80 000.
- Both in one year: R90 000 deduction, so R24 300 less tax for a company at 27%.
- Learners with a disability earn higher amounts - the calculator has the switch.
- Agreements must be entered into before 1 April 2027 under the current sunset date.
Worked example 4: the CIPC annual return
- Every company files an annual return within 30 business days of its registration anniversary, and the fee depends on turnover (CIPC calculator).
- Turnover R2 500 000: R450 on time, R600 late. This year on time plus two missed years: R450 + 2 x R600 = R1 650, of which R300 is penalties.
- A close corporation turning over R800 000 that files late pays R100 + R150 = R250.
- Keep missing them and CIPC can start deregistering the company - restoring it later costs far more than the fees.
Not verified from a primary source: the 2026 Budget Review was not read, so a change to the ETI or the 1 April 2027 learnership cut-off announced there would not be reflected. COIDA tariffs per industry class are in a separate notice not read for this post - type your own. The CC late fee is treated as added to the normal fee, and the CIPC fee table is from a CIPC FAQ first written in 2013 - check the CIPC fee calculator before paying.
What to do this month
- Check every employee aged 18 to 29 earning under R7 500 - the ETI is claimed month by month on the EMP201.
- Diarise your COIDA return of earnings and your CIPC anniversary - both cost more late.
- Planning a learnership? Register the agreement with the SETA before 1 April 2027, and see what each new hire costs in full on the employer cost calculator.
Sources
- SARS, Guide to the Employment Tax Incentive, Issue 5, and notice "ETI changes with effect from 1 April 2025" (28 March 2025): sars.gov.za, read by CalcSA 16 October 2026.
- National minimum wage R30.23 an hour: Department of Employment and Labour, labour.gov.za.
- COIDA s83, General Notice 3910, Government Gazette 54577 (24 April 2026): gov.za, read 16 October 2026.
- Income Tax Act s12H; SARS Interpretation Note 20 (issue 9, 10 April 2025), Examples 2 and 5: sars.gov.za, read 16 October 2026.
- CIPC Annual Returns FAQ v2.0: cipc.co.za, read 16 October 2026.
Calculators used in this post
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