Is your company registered with the South African Revenue Service (SARS) for employee tax purposes or does your annual payroll exceed R250 000? If so, you’ll no doubt know that you’re paying a compulsory skills development levy in terms of the Skills Development Act of 1998. This amounts to 1% of your total payroll. But if your business is like countless other small, medium and micro enterprises (SMMEs) in the country, it probably doesn’t have a skills development programme which means that you can’t claim back any of the grants you’d be entitled to from your particular Sector Education and Training Authority (SETA). At the end of March 2003, only 9,7% of SMMEs were claiming grants from their SETAs for skills development. But by getting SETAs to work for you, you can not only develop the skills base in your company, but also get paid for doing so.
While many large corporates have been busy implementing skills development programmes, SMMEs still lag far behind, which means they’re losing out on two fronts. Think of it this way. You have to pay the levy anyway, so you might as well implement a skills development programme.
You’ll be able to claim back a large portion of that money, while also improving the skills of your employees – something that can only benefit your business in the long run. And depending on the size of your company’s payroll, the amount you can claim back can add up to quite a bit of money. 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
- 20% of the levy when you prepare an annual training report based on your approved workplace skills plan
In addition, each SETA makes grants available for specific sector skills initiatives, depending on certain criteria, and these add up to an additional 5% of the total levy paid.
Many small businesses can’t be bothered, or don’t have the time, to deal with the paperwork and administration involved in claiming back what is sometimes a small amount of money from SETAs. But the benefits do not just lie in putting money back in your business’s pocket. There are enormous advantages to be derived from upskilling your employees and any small business that is truly invested in growth should have some sort of training and development programme, regardless of whether or not they can claim money back from SETAs.
But to make the system work for your business, you need to understand the basics. For the South African economy to grow and flourish there is an urgent need to address the severe skills shortage that exists in the country. This cannot be achieved without the help of business which is why government implemented the Skills Development Act to provide a framework for skills development in the workplace.
Government set up SETAs to identify skills development needs in each sector; facilitate the development and implementation of a strategic sector skills development plan; approve learnerships; meet the agreed standards for education and training within an agreed national framework to control quality; and to pay out grants. In total, there are 22 SETAs. They receive 80% of levies collected, while the remaining 20% is distributed to the National Skills Development Fund for projects that fall outside any of the established SETAs.
To be eligible to claim back from a SETA you first have to appoint a skills development facilitator. This person can be full-time, part-time or on contract, but they need to be registered with your business sector’s SETA. Their role is to assist you with the second part of the process which is the development of a workplace skills plan and the submission of this to the relevant SETA. They should also be able to advise you on how to implement the plan, assist you in putting together the necessary annual training report (step three), advise you on the quality assurance requirements as set by the relevant SETA and serve as a contact person between your business and your SETA.
In addition to the grants that you can claim by implementing these steps, there are a number of discretionary grants that the SETAs may also make. These are for learnerships, skills programmes, apprentices and sector priorities. By implementing these in the correct way, you can claim back additional funds.
A learnership is an alternative form of training that places the emphasis on practical experience and culminates in the learner receiving an NQF (National Qualifications Framework) qualification. It can include classroom-based learning at a training centre or college and on-the-job training in a workplace and it has to be approved by the relevant SETA. As an employer, you can seek a grant from a SETA to support the implementation of a learnership. The first type of grant is to offset the costs of implementing a learnership, (such as off-the-job education and training provider fees), while the second subsidises the learner’s allowance if the learner was unemployed immediately before starting the learnership.
The following steps are required to set up a learnership:
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SETA websites
- Agriculture: www.agriseta.co.za
- Banking: www.bankseta.org.za
- Construction: www.ceta.org.za
- Chemical Industries: www.chieta.org.za
- Clothing, Textiles, Footwear & Leather: www.ctflseta.org.za
- Energy, Water & Related Services: www.eseta.org.za
- Education Training & Development Practices: www.etdpseta.org.za
- Financial & Accounting Services: www.fasset.org.za
- Forest Industry: www.fieta.org.za
- Food & Beverage Manufacturing Industry: www.foodbev.co.za
- Health & Welfare: www.hwseta.org.za
- Insurance: www.inseta.org.za
- Systems, Electronics & Telecoms Technologies: www.isett.org.za
- Media, Advertising, Publishing, Printing & Packaging: www.mappp-seta.co.za
- Manufacturing, Engineering & Related Services: www.merseta.org.za
Mining & Minerals: www.mqa.org.za - Safety & Security: www.poslecseta.org.za
- Services: www.serviceseta.org.za
- Transport: www.teta.org.za
- Tourism & Hospitality: www.theta.org.za
- Wholesale & Retail: www.wrseta.org.za
