In terms of the Skills Development Act, businesses with a payroll in excess of R500 000 per annum must pay a statutory tax in the form of a skills development levy (SDL). This tax must be paid regardless of whether the business trains its employees or not. The SDL amount is calculated as 1% of the company’s payroll, including salaries, wages, overtime payment, bonuses, commissions and directors’ fees.
Emmarentia Booysen, Learnership Manager at CTU Training Solutions, explains: “The types of skills development that qualify include internships, learnerships and skills development programmes. Not only is the business able to claim back from the SDL for training its own staff members, but it can also run programmes for unemployed learners. In this case, the business benefits in two ways: it pays the learners a stipend that can be funded by the SETA (Sector Education and Training Authority); and carrying out this kind of training can add value to the business’s B-BBEE scoring. The business can also apply for a tax rebate for the stipend amount.”
Naturally, there are criteria in terms of the types of training that attract the abovementioned benefits, says Booysen. “Any learnerships undertaken must be a full national qualification and run over 12 months, whereas internships can only be provided to candidates with a degree or diploma.”
Some businesses are reluctant to implement skills development because of concerns that it will impact on employees’ productivity. Booysen says: “To the contrary, qualified employees are more productive in the long run. Also most training programmes have flexible schedules to accommodate employed candidates that still ensure that the minimum notional hours prescribed by the programme are met.”
She explains that companies that choose to invest in running internship and learnerships for unemployed candidates will be able to grow their workforce with skilled people on completion of the programmes. “Companies of all sizes can benefit from running these programmes, it’s not just for big corporates.”
Booysen highlights that there are two aspects to accessing the SDL: “The company has to implement the training, but it also has to fill out the relevant forms and tick all of the necessary boxes to qualify. Often the administrative side is where companies fall short. However the steps are fairly simple, as outlined below.”
Firstly, any company that is liable to contribute to the SDL must complete a workplace skills plan (WSP), which must be submitted to its relevant SETA by 20 April. This has to be done annually. Then the company has to complete an annual training report (ATR), which is also due on an annual basis. If the WSP and ATR are completed correctly, the business will be able to claim back part of its spend from the SETA.
The SETAs make two types of grant available to businesses, namely mandatory grants and discretionary grants. Mandatory grants must be paid by the SETA if the company fulfils the necessary requirements to qualify. Discretionary grants are paid out at the discretion of the SETA management and board.
“Businesses can also apply for funding from the SETA in advance by submitting a letter of intent (LOI) for programmes that they want to run that form part of their discretionary grant. Your mandatory grant will be refunded on proof of completion of interventions.”
Business are also able to apply for funding from the National Skills Fund, but that comes with its own set of criteria that need to be met, says Booysen.
She says, “Because implementing training isn’t a core business activity for the majority of businesses, they largely outsource this function to a training provider that offers the training facilitation and that is the link between the SETA and the client. It’s key for companies to choose a partner that is a registered and accredited training provider if they want to claim back any funding from the SETA. The training provider must also be accredited for the programmes that they offer.”
Five top things to consider when choosing a provider
* Relevant accreditations and registrations in place.
* Programmes are aligned and accredited – for national qualifications.
* Partnership status for international certification.
* Quality of programmes, facilitation and infrastructure to offer the required courses.
* Administrative support.