B-BBEE explained – The Y.E.S Initiative—Criteria and Costs

In a previous article, the benefits of implementing the gazetted Y.E.S Initiative were discussed.

The objective of the Youth Employment Service (Y.E.S) Initiative is to provide for, and institute, Broad-Based Black Economic Empowerment (B-BBEE) Recognition for Y.E.S Measured Entities and qualification criteria applicable to, the B-BBEE Recognition for Job Creation.

In this article we will focus on the basic qualifying criteria for the Y.E.S Initiative and the costs associated with implementing the initiative.

  1. Annual turnover
  2. Net profit after tax
  3. Headcount

These criteria are entered in to the YES4YOUTH target input screen and the resultant number of employees required will be calculated. Refer to: www.yes4youth.co.za/for-business/ for further detail.

Keep in mind that the criteria for Generic entities is different to that of QSEs and EMEs and was discussed in previous articles.

It is important to note the following information related to the B-BBEE scorecard:

Generic entities: must meet the normal sub-minimums for each of the priority elements or meet 50% average across the 3 priority elements
QSEs: should meet the normal sub-minimum for priority elements or 40% across 2 priority elements
EMEs: No sub-minimum will apply.

Y.E.S. entities are obliged to maintain or improve their B-BBEE status level compared to the preceding year.

Costs associated with the Y.E.S. Initiative

  1. Registration fee
  2. Once-off Management Fee per youth
  3. Youth Employee wages

The registration fee is dependent on the company’s annual turnover.

<R10 million per year                FREE
R10 million to R50 million per year           R2 500
R50 million to <R100 million per year            R10 000
R100 million to R199 million per year           R15 000
> R199 million per year                                         R20 000

Assuming it is a small business venture and the “Small Biz Deal” option is selected the cost would be:

  1. No registration fee.
  2. A once-off management fee per youth of R1700. This includes a smartphone, Employee toolkit, tracking and attendance, and continuous monitoring.
  3. A minimum monthly salary of R3 500 p/m is payable (the Employment Tax Incentive allows R1 000 to be reclaimed from PAYE) but this excludes UIF and SDL contributions.

Equate these values with the number of youth required (from the input criteria) to be employed and the total annual cost may be calculated.

If two youth are to be employed, the cost would be:

2 x R1700 + (2 x R3500) x 12 months (excluding UIF and SDL) = R87 400 per year and attach to this the possible benefit of 2 improved BEE levels.

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