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The process of claiming skills development levies already paid

The Skills development levies Act was introduced to assist employers in combating unemployment as well as upskilling the South African workforce. The contributions that employers are expected to make towards the skills development levies are determined by an employer’s wage bill. Employers with a payroll exceeding R500 000 annually are expected to pay 1% of their monthly wage bill towards skills development levies to SARS (South African Revenue Services). These levies are paid by employers across different industries in the economy to fund learning and development initiatives for socially and economically marginalized groups in South Africa both in and outside the workplace 

Employers who pay their skills development levies are entitled to claim back a sum of money used to train and upskill their staff from their paid skills development levies. The levy allows for businesses to claim back approximately half of their already paid levy. The amount that an employer can claim back for their respective SETA (Sector Education and Training Authority) depends on their annual payroll. The fact that employers can claim back a sum of money from their already paid levy is often questioned, why does the skills development levy allow employers to claim back nearly half of the levies that they have paid. The answer to this question is that when employers submit a Work Skills Plan and an Annual Training report then 20% of the levies paid will be paid as a mandatory grant towards their companies. A mandatory grant is a reimbursement to compliant employers of their training expenses both internally and externally. The mandatory grant which plays a key role in this process serves to encourage employers to provide data to their respective SETA on their workforce and skills needs based on their Annual Training report and Workplace Skills Plan. The annual training report reflects the on the actual training data of the previous year. The workplace skills plan documents the descriptions of all the main skills development activities which are planned for the coming year. The mandatory grant payments are paid out quarterly to qualifying companies. 

These are the percentages that an employer can recover after paying skills development levies: 

  • 15% of the levy your company pays when you appoint and register a skills development facilitator. The responsibility of the skills development facilitator is to ensure that the organisation’s Workplace Skills Plan or Implementation Report is developed and implemented and serves as the contact person between the organisation/s and the SETA. The skills development facilitator is also responsible for providing resources to the organization with regards to all the aspects of skills development. 
  • 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. This means you submit both the Annual training report and the Workplace skills plan.  

Steps on how to claim 

  • Firstly, the employer needs to be registered for the Skills Levy contribution and be registered at the relevant SETA. SARS will be able to identify which SETA is relevant to the business, to receive this information an employer also needs to register through the client information system at SARS. This will also assist the employer in obtaining the necessary information related to claiming skills levies. 
  • An employer must ensure that they are registered with a SETA related to their industry. The levy paid will be transferred to the SETA you are registered with. They will fund the skills programme. It is highly recommended that organizations work with competent agencies like Cham-training to work out the programme for the best possible outcome. 
  • Submit your ATR (Annual Training Report) and WSP (Workplace Skills Plan) before 30 April Annually. These submissions are usually made online electronically. Most SETA’s prefer this to be submitted by a qualified Skills Development Facilitator. 
  • An application for a mandatory grant must be submitted within 6 months of registration. 
  • Make sure that records of all training provided are kept- this includes attendance registers, invoices, and all certification. 
  • The money will then be paid out in cash to the employer which is transferred to the bank accounts. The total transferred amount depends on the amount of money that the employer contributed towards the skills development levy.  

For more information on how to claim for skills development levies contact Cham-training for assistance. Our team of motivated consultants will be happy assist you with any queries you may have. 010 040 8335

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