What are the Costs and What Compensation is Offered?
Obviously there are costs associated with training. These include: fees for “off-the job” education and training and the internal costs of providing mentoring and supervision for learners, the assessment of their progress, as well as the learner allowance.
However there are incentives to assist in funding learnerships. These take two principal forms:
1. Cash Grants
Employers who pay the skills levy can claim cash grants when they provide training. These grants can be used to offset learnership costs. Sector Education and Training Authorities (SETAs) may also provide grants for the implementation of learnerships. Employers should get in touch with the SETA to which their skills levies are paid to find out if learnership grants are available. These learnership grants are “discretionary”, so check with your SETA about this grant which can be paid in addition to the levy repayment for drafting and/or implementing a work place skills plan. You may thus be able to get back from the SETA more than your levy payments.
2. Tax Incentives
Following the registration of your learnership with a SETA you are eligible to claim a tax incentive from SARS.
There are two tax incentives, one at the beginning of the learnership and one at the successful conclusion of the learnership.
At the beginning of the learnership:
- Learners already employed by you – 18(1): Once you have entered into a learnership agreement with a learner and have registered the agreement with a SETA , you may deduct 70% of the annual wages paid to that learner, up to a maximum amount of R17 500 during the relevant year of assessment.
- Unemployed learners – 18(2): Once you have entered into a learnership agreement with a learner and have registered the agreement with a SETA, you may deduct 100% of the learnership allowance paid to the learner up to a maximum of R25 000 during the relevant year of assessment.
On completion of the learnership you can claim again! Your claim can be up to 100% of the annual wage paid to an employee (18(1)) or 100% of the allowance paid to the “unemployed” learner (18(2)) of up to a maximum of R25 000 during the relevant year of assessment.
For further details of the tax incentive, please consult the SARS website, look at the 2002 amendments to the tax laws or contact your SETA.