What is ETI?2020-11-05T13:26:09+02:00

The Employment Tax Iincentive (ETI) is an incentive aimed at encouraging employers to hire young work seekers.

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What is the 12H Tax Rebate?2021-04-19T20:21:25+02:00

Section 12H of the Income Tax Act (the Act) provides for an allowance to employers in respect of qualifying ‘registered learnership agreement'(s) entered into between the employer and employee. The allowance is intended as an incentive for employers to train employees. Tax Incentives (SARS)

Tax Incentives are deductions on your taxable income that you can claim for each learnership candidate that you have in your employment, once at the start of the learnership, and once again at its completion. These incentives are legislated in section 12H of the Income Tax Act, 58 of 1962 and the amendments made in January 2010.

There are only 2 levels.

R30,000 commencement and completion allowances for learnerships and apprenticeships
R50,000 commencement and completion allowances for learners with disabilities

The principle is straightforward.
For each year that a learner is registered for a learnership linked to the employer’s trade, the employer claims and allowance of R 30 000 for that learnership. This allowance is based on a 12 months periods, and full periods of a month, so if a learnership starts half way through the employer’s year of assessment, half of the allowance is claimed by the employer in the first year and half in the second.
If the learner leaves during the year, there is no recoupment. The R 30 000 is merely apportioned for the part of the year, so that if the learner leaves after 4 months, the employer only claims 4/12 of the allowance, i.e. R 10 000. These must be full months, so if the learner leaves after 3 and a half months, the allowance must be claimed for 3 months, i.e. 3/12 X R 30 000 = R 7 500.
Similarly, if a learnership spans 3 and half months in the first year of assessment and 8 and a half months in the second year of assessment of a single employer, the employer claims commencement allowance of R 7500 in the first year and R 20 000 in the second year.
When a learnership is successfully completed, the employer claims an allowance of R 30 000 for each completed 12 months of the learnership. So if it was a 2 year learnership, the employer claims an allowance of R 60 000. If the learnership was for 30 months, the employer’s allowance in the year of completion is also R 60 000, because two full periods of 12 months has been completed. No completion allowance is claimable until the learnership is successfully completed.
If the learner goes to another employer while he is still doing his learnership and the learnership is carried on, linked to that employer’s trade, the new employer claims the learnership for the rest of the year, i.e. 8/12 X R 30 000 = R 20 000. The new employer will also claim the full completion allowance, even if the learner was not employed by that employer in the earlier years or months of the learnership.
If a learner fails his or her learnership and registers for a new learnership, section 12H will not apply to the new learnership if it contains the same education and training component of the learnership that the person failed.

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What is a Privately Funded training intervention?2020-11-05T13:24:08+02:00

South African companies are required to spend a specified percentage of their total payroll on Skills Development – so directly sponsoring, mentoring and employing learners provides an immediate solution to most businesses. If a business needs to improve its overall score card and already has fulfilled its Skills Development obligations, then additional expenditure (as a percentage of net profit after tax) on Socio-Economic Development can be helpful.

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What is a Mandatory Grant?2021-04-19T20:28:32+02:00

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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What is a Discretionary Grant?2020-11-05T13:17:35+02:00

Discretionary grants are provided by a SETA and aimed at encouraging organisations to contribute to skills development. The bulk of discretional funding is directed at pivotal learning programmes such as: learnerships, Work Integrated Learning (WIL), internships, bursaries, and skills programmes. The learning programme results in a qualification or partial qualification aligned to the NQF, outlined in the Grant Regulations. The SETA makes discretionary funds available during a window period where it accepts applications from organisations/employers. The opening period is advertised on the SETA website, national and community radio stations, and national newspapers. Discretionary grants refer to additional funding that qualifying companies can apply for over and above their mandatory grants. The new regulations stipulate that 49.5% of the levies paid by employers will be allocated to discretionary grants.

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