A Guide to Understanding:
Tax Allowance and Your
Income Statement
Before explaining how you could benefit as an ‘employer’ from learnership Tax Allowance put in place by the government, it is important to understand learnerships. To help you with understanding, we start by considering the foundation of a learnership in relation to the tax allowance (also known as learnership allowance) available to ‘employers’ that are BEE compliant and who have entered into a learnership agreement. Download the full Guide to Understanding Tax Allowance and Your Income Statement below.
What is a learnership?
Learnerships are a work based training programme that promotes education and learning in the form of theorectical and practical skills development and leads to an NQF registered qualification. Learnership programmes are overseen by SETAs (Sector Education and Training Authorities) and run across various industries namely; administration, hospitality, management, communications, operations, logistics, tourism, sport and technology.
With B-BBEE in mind, this act was introduced by the government to help South African citizens with gaining valuable skills, knowledge and experience to prepare them for the workplace. These programmes are offered to unemployed, disabled or previously disadvantaged individuals (Black, Coloured, Indian and Disabled) in an effort to solve the skills shortages and unemployment rates in South Africa and so the learnership allowance will be made eligible to any ‘employer’ who enters a learnership agreement. The ‘employer’ can claim a tax deduction during a year of assessment after the following requirements are met.
Learnership agreements must be registered between:
• the learner or candidate;
• an employer or organisation;
• a training provider accredited by SETA or QCTO (Quality Council for Trades and Occupations)
A tax allowance is eligible for the 'employer' once:
• The learnership agreement has been registered between the employer and learner
• A learnership agreement has been entered into or completed during the year of assessment
• A learnership agreement has been entered within a specific period
What is a learnership tax allowance?
The Learnership Tax Allowance is an additional tax deduction which may be claimed from SARS.
Employers who are successfully registered can claim the tax incentives which consists of both annual learnership allowance and completion learnership allowance. There are different requirements for both as explained below:
• Annual Allowance is available in respect of each year of assessment
• Completion Allowance is available in respect of when the learner successfully completes the learnership