Financial Support
October 19, 2022 2022-11-29 10:01Financial Support
Mandatory and Discretionary Grants
All employers who are registered with the South African Revenue Service (SARS) for PAYE and have an annual payroll in excess of R500 000 must pay 1% of their payroll as a Skills Development Levy and register with a relevant SETA.
SETA submissions open on an annual basis, and employers will be required to report their Workplace Skills Plan (WSP – scheduled training for the year) and their Annual Training Report (ATR – training that has already happened in the previous year).
If an employer’s application is approved, the relevant SETA will reimburse up to 20% of the expenditure in the form of a Mandatory Grant. Mandatory Grants are paid out quarterly, and any Mandatory Grants that are not claimed are transferred to the SETA’s Discretionary Fund.
Employers can claim back between 40% and 60% of their training costs through Discretionary Grants, which are paid out at the discretion of SETA management for Skills Development projects related to scarce and essential skills. Before any training or other activity related to the Skills Development project can begin, applications for Discretionary Grants must be submitted and approved.
If you have not claimed these funds and would like to, we at train SA can help you with this process. Enquire now
Tax incentives
One of the benefits of running learnerships is the learnership tax allowance (Section 12H of the Income Tax Act 58 of 1962 and subsequent amendments). The tax allowance available to companies running learnerships can be seen in the table below:
Commencement Tax Allowance
| Completion Tax Allowance
| |
NQF 1-6 Learnership
| R 40 000 | R 40 000 |
NQF 1-6 Learnership Person with Disabilities | R 60 000 | R 60 000 |
NQF 7-10 Learnership
| R 20 000 | R 20 000 |
NQF 7-10 Learnership Person with Disabilities | R 50 000 | R 50 000 |
A company can claim the Employment Tax Incentive (ETI) and reduce the amount of Pay-As-You-Earn (PAYE) tax payable by the amount of the total ETI calculated in respect of all qualifying employees as per the table below:
| Year 1 | Year 2 | |
| Monthly Remuneration | ETI per month during the first 12 months of employment of the qualifying employee | ETI per month during the next 12 months of employment of the qualifying employee |
| R0 – R1999 | 75% of Monthly Remuneration | 37.5% of Monthly Remuneration |
| R2000 – R4499 | R1500 | R750 |
| R4500- <R6499 | Formula: X = A – (B x (C – D)) X = monthly calculated amount A = R1500 B = 0,75 C = Monthly Remuneration D = R4500 | Formula: X = A – (B x (C – D)) X = monthly calculated amount A = R750 B = 0,37.5 C = Monthly Remuneration D = R4500 |
If 1 new worker is employed at a minimum wage of R4150 then the total salary cost for 12 months is R49 800.
ETI rebate of R1500 for 12 months is R18 000
We at Train SA can help you with this process. Enquire now
