Well before our current crisis, forward-thinking employers have been asking questions about approaches to the training and development of their people. 2020’s Entirely unexpected change, of course, has forced all employers to rethink how employees can be upskilled and developed, under very real budget constraints, to still strengthen organisational capabilities.
With the Covid-19 third wave upon us, we are not going ‘back to normal’ anytime soon and if anything, the reskilling of employees is becoming a strategic imperative.
For many employers, it has required some courageous decision-making as they’ve realised the seriousness and likely long-term effects of the Covid crisis, and they made it a priority to start looking for people development alternatives such as e-learning and virtual training, where possible.
But for most employers, the biggest hurdle to overcome is that of funding and being able to identify external opportunities to fund and support their ongoing training and development plans.
Enter the all-familiar Skills Development Levy Act and the need for those employers, who are not yet participating fully, to immerse themselves in this landscape.
The Act makes provision for skills development by means of a levy-grant scheme, and the establishment of sector-specific Sector Education and Training Authorities – or SETAs – to administer the scheme’s funds and manage the skills development process.
In essence, this Act provides that all organisations in South Africa with an annual wage bill of R500 000 or more must pay 1% of this bill as a levy (not to be deducted from the employees’ wages), to be collected by South African Revenue Services (SARS), on a monthly basis, together with PAYE and UIF.
Once registered with a relevant SETA, employers may participate in levy grant schemes. Below is a useful checklist for employers to ensure that opportunities are maximised.
Employer to register with SARS – The employer must register with SARS to pay its monthly SDL by completing form EMP. |
Submit Mandatory Grant Application annually to registered SETA – In order to receive payment of a mandatory grant, equivalent to 20% of the levy amount paid by the compliant and participating employer, firms need to submit (in advance) a workplace skills plan (indicating the planned training) and (after the training) an annual training report to the relevant SETA to which they pay the levy. – The submission period is fixed across all SETA’s and the annual due date is the 30th of April each year. |
Apply for Discretionary Grants (DG) annually with registered SETA – Be on the lookout for DG notifications from the registered SETA. Funding windows vary between SETAs. – Download the SETA Sector Skills Plan and navigate to the section that covers Skills Shortages/Critical Skills and Hard-to-Fill Vacancies/Scarce Skills. This will provide insight into which programmes will be supported through funding grants. |
8.1 Employed Learners (Employees) | 18.2 Unemployed Learners |
– Consider applying for Skills Programmes (accredited short courses); Learnerships/Apprenticeships and Bursary sponsorship. – Remember that SETAs are also open to accepting applications for non-accredited short courses. | – Unemployed learners may be brought in on fixed-term employment contracts linked to the training programme which may assist with required people resources. – On a Learnership/Apprenticeship the grant will cover both the stipend (salary) as well as the cost of the training course. – SETAs are also making additional values available to purchase PPE for these unemployed learners. |
Tax Advantage – Section 12H of the Income Tax Act provides additional deductions to employers for qualifying Learnership agreements. – Training contracts that qualify for these deductions are Learnership agreements and apprenticeships registered with a SETA. – These additional deductions consist of an annual allowance and a completion allowance. The allowance value varies according to the qualification NQF Level, as can be seen from the table below: |
| Qualification equal to NQF level 1 – 6 | Qualification equal to NQF level 7 – 10 |
Annual Allowance | R40 000 | R20 000 |
Completion Allowance | R40 000 | R20 000 |
Addition Allowance in respect of a person with a disability | R20 000 | R30 000 |
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