South Africa's Skills Development Tax Incentives
Most companies pay into the system but never claim back. Here's what you could be recovering — and how Proacto makes it happen.
Employment Tax Incentive (ETI)
Claim up to R1,500/month per qualifying employee aged 18–29 for the first 24 months of employment.
- Available to employers registered for PAYE
- Employee must earn between R2,000 and R6,500/month
- First 12 months: up to R1,000/month; next 12 months: up to R500/month
- Special Economic Zones: up to R1,500/month for 24 months
- No cost to the employee — it reduces your PAYE liability
- Claimed via your monthly EMP201 return to SARS
Section 12H Tax Deduction
Deduct R40,000–R80,000 per learner per year for registered learnership and apprenticeship agreements.
- Learnership with NQF 1–6: R40,000 annual allowance + R40,000 completion allowance
- Learnership with NQF 7+: R20,000 annual allowance + R20,000 completion allowance
- Disabled learners: R60,000 annual + R60,000 completion (NQF 1–6)
- Agreement must be registered with the relevant SETA
- Applies to employed and unemployed learners
- Deduction claimed on annual income tax return (ITR14)
Skills Development Levy (SDL)
Recover up to 70% of the 1% SDL you already pay through mandatory and discretionary SETA grants.
- All employers with payroll > R500,000/year must pay 1% SDL
- Mandatory grant: 20% back for submitting a compliant WSP/ATR
- Discretionary grants: up to 49.5% available for approved training projects
- 0.5% goes to the National Skills Fund (NSF)
- Grants can fund learnerships, bursaries, skills programmes, and internships
- Most companies forfeit their grants by not submitting on time
B-BBEE Skills Development Scorecard
Earn up to 25 points on your B-BBEE scorecard through structured skills development spending.
- Skills Development Spend target: 6% of leviable payroll
- Bonus points for training black disabled employees
- Bonus for absorbing learners into permanent employment
- Training must be aligned to core or critical skills
- Properly structured learnerships maximise both tax and B-BBEE benefits
- Proacto ensures your training plan is dual-optimised
National Skills Fund (NSF) & SETA Discretionary Grants
Access ring-fenced funding for large-scale training projects, especially for scarce and critical skills.
- NSF receives 0.5% of all SDL contributions nationally
- Funds training for unemployed and vulnerable groups
- SETA discretionary grants fund employer-driven training projects
- Grants can cover learnership stipends, training materials, and assessor costs
- Application requires a compliant WSP/ATR and project proposal
- Proacto has a proven track record of successful grant applications
Skills Development ROI Calculator
See exactly what your company could save and claim. No guesswork — real SARS-aligned figures.
Step 1: Company Profile
Total gross annual salary bill including benefits
Additional Funding Available Through SETA Grants
Beyond the tax incentives above, your company may qualify for discretionary grants worth up to 49.5% of your SDL. These competitive SETA-administered grants can fund learnerships, internships, bursaries, and skills programmes — significantly boosting your total recovery. Proacto has deep expertise in securing these grants across all 21 SETAs.