Mandatory Grants are funds paid by a SETA to an organisation that fulfils the requirements to receive grants.

To qualify for a mandatory grant, a levy-paying employer must meet criteria outlined in the Skills Development Act, such as:
• Be registered
• Be up to date with levies at the time of approval and for the reporting period (the levy is calculated on 1% of the organisations total salary bill but if an organisation has a wage bill of less than R500 000, it is exempt from this levy).
• Employ an SDF.
• Submit WSPs and ATRs by the required deadline.
• Have submitted and implemented the WSP for the previous reporting period according to the prescriptions of the relevant SETA.
• Provide proof, if a recognition agreement with a trade union exists, that WSP and ATR have been subject to consultation with recognised trade unions and signed off by the union.

Qualifying levy paying companies may claim mandatory grants of 20% of the total levies paid from their SETA.

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