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Benefits of training (SDL)

Skills Development Levy (SDL) Reimbursements for Organisations

All companies with an annual payroll of R500 000 and above must submit their Workplace Skills Plan (WSP), Annual Training Report (ATR) and Pivotal Report (PVT) to the relevant Sector Education and Training Authority (SETA) for approval before 30 April every year. Failure to do this will result in a zero score on skills development and this is a strict requirement for the new B-BBEE codes.

The Mandatory Grant has an important function. It is designed to encourage employers to provide data to their SETA on their workforce and skills needs based on their WSP and ATR. The mandatory grant related to WSP’s and ATR’s is set at 20% of an employer’s 1% skills levy.

You will be able to claim back a large portion of money spent on training and upskilling your staff. The amount you can claim back from your SETA is dependent on your annual payroll.

These are the percentages that you can recover:

  • 15% of the levy your company pays when you appoint and register a skills development facilitator;
  • 10% of the levy when you prepare, submit and get approval for a workplace skills plan for the appropriate SETA; and
  • 20% of the levy when you prepare an annual training report based on your approved workplace skills plan.

 

Companies can claim the cost of training, facilitators, training venue costs, course fees and course material. Documentation to substantiate the above mentioned costs must however be provided.

 

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Maximise your B-BBEE points through Skills Development

 

Link for SARS http://www.sars.gov.za/TaxTypes/PAYE/Pages/Completing-the-EMP201.aspx

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Skills development is a priority element which amounts to 20 points (and 5 bonus points) of the total scorecard points. A minimum of 40% of the points within this element must be scored to avoid dropping to a lower level. Companies can only score points on skills development if there is sufficient evidence indicating that black people are being trained in scarce and critical skills. This means that a company can include training conducted on any person that satisfies the definition of black as per the BEE Codes of Good Practise regardless of employment status.

 

Please note the following important amendments to the codes:

  • Points increased from 15 to 20 (plus 5 bonus points).
  • Spend has increased from 3% to 6% for total leviable amount (the total annual salary payroll).
  • Trainees do not need to be permanent employees.
  • Only 15% of your training spend can be used on internal / non-accredited training.
  • Learnerships must account for 5% of staff headcount, 100% gainful employment equals 5 bonus points.

Training is probably one of the easiest ways to boost your B-BBEE rating for maximum points.

 

Any grant funding received from your SETA still becomes part of your expenditure.

Learnerships increase your training spend without increasing costs and increase your B-BBEE score.

You can claim points for training in skills development, supplier development or enterprise development. You can score in two (2) of the three (3) elements listed above for one (1) contribution. Learnerships for disabled employees allows you to score in all three (3) elements.

It is important to note that full costs for expenses towards Skills Development Facilitators (SDF’s) can be claimed (salaries or invoices).

 

What are the limitations?

Only 15% of the value of informal, uncertified training will count towards total training expenditure.

Accommodation, catering and travel costs will also be limited to 15% of the total value.

When claiming for any training, you will be required to submit proof to your verification agency of your registration with your SETA, as well as proof of submission of your WSP and ATR.

Your company will be required to submit your EMP 201’s for the measurement period, to enable the verification agency to calculate the targets.

Discretionary Grants

training-3The SETA shall allocate at least 80% of its total 49.5% discretionary grants within a financial year (1 April – 31 March) towards pivotal programmes to address critical and scarce skills within its sectors as set out in the Sector Skills Plan (SSP) in accordance with the new Regulations.

This grant is applicable when an employer addresses the sectors’ scarce and critical skills through the following pivotal programmes (Professional, Vocational, Technical and Academic learning programmes that results in occupational qualifications or part qualifications on the National Qualifications Framework).

  • Learnerships – formally registered with the Department of Labour and contains both practical (70%) and theoretical (30%) components leading to a full qualification.
  • Skills programmes – short courses (1 day, a week, a month, etc.), consisting of one (1) or more unit standards.
  • Apprenticeships – on-the-job training and often some accompanying study (classroom work and reading) that enables practitioners to gain a license to practice in a regulated profession.
  • Workplace Experience Placements – paid or unpaid, is part of a course of study and is usually arranged through a university with an employer or by the student and is for an agreed period of time.
  • Internships – a programme for candidates who have completed their training and still lack the workplace experience before they can be employed.

 

Pivotal training is an effective way to address your company’s succession planning training needs which includes management and leadership skills and management training.

Learnerships are a great way to increase your training spend as you can count the salary of the learner as a training expenditure. Through the learnership process, the employer can increase the level of skills of their employees and reclaim the cost of the learnership fees from their SETA.

 

The employer must contact their SETA first to determine if they are eligible for SETA funding by providing a Letter of Intent (LOI).