Implementers and Trainers of Employment Equity Act


How to calculate remuneration on the EEA4

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  • #76387
    sylvia hammond
    Keymaster

    At this time of year – many questions arise from practitioners completing the Employment Equity reports.

    The EEA4 part of the report deals with the payments to employees.

    This year there is an added complication. The TERS payments.

    The questions is: should the TERS payment to an employee be included in the remuneration?
    Is this the correct answer?
    The TERS payment is an unemployment insurance benefit and so should not be included in the reporting of remuneration.

    Do you have this in writing? Or have you found it on one of the sites?
    Please advise.

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    #76389
    Heidi D Edwards
    Participant

    Good day,

    All registered Accountants and Tax Practitioners would have received a communication in this regard.

    There are a number of possible answers, tied to a number of scenarios.
    1. If the employer paid / declared a reduced salary and still claimed TERS.
    2. If the emplouyer paid / declared a full salary and still claimed TERS.
    3. If the employer paid / declared no salary and claimed TERS.

    I’ll locate the communication and load it here.

    Regards – Heidi Edwards.

    #76390
    sylvia hammond
    Keymaster

    Thanks Heidi,
    I have received this response.

    “Q: Should I include payments received from UIF TERS as remuneration when I calculate ETI?
    A: Payments from UIF TERS directly to the employer, who will in return pay the employees are exempt and does not form part of remuneration. These payments must be excluded for purposes of ETI determination.
    Example: Employee earns R5000, but due to the impact of the COVID-19 disaster the employer only pays R2000 and UIF TERS pays R3000. For ETI purposes, the remuneration is only R2000
    This is supported by the following extracts from the Income Tax Act:

    Payments received from the UIF are exempt in terms of s10(1)(mB) of the Income Tax Act;
    The definition of ‘remuneration’ means any amount of income (para 1 of Fourth Schedule); and
    The definition of ‘income’ means the amount remaining of the gross income after deducting any exempt amounts (section 1(1) of the Income Tax Act).”
    Website:
    https://www.sars.gov.za/TaxTypes/PAYE/Pages/FAQs%20Employers—Tax-Relief.aspx

    #76434
    Des Squire
    Participant

    Thank you Heidi and sylvia. I contacted the department a few days ago and have stll had no response from them.

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