Employers can claim back up to R 120 000 from the learnership tax allowance programme.

Training and development for employees plays a vital role in the growth and success of a company, but budget concerns often lead employers to think – or hope – that employees will “learn on the job”. Fortunately, SARS has introduced the learnership tax allowance (section 12H of the Income Tax Allowance Act No. 58 of 1962) an incentive for employers to encourage skills development though the implementation of learnerships.

In effect this is a tax deduction, which allows an employer (or company) to claim tax back for any of its employees or unemployed individuals in terms of a registered learnership agreement settled between the learner, employer and the relevant SETA before 1 April 2022.

This agreement has been registered with a specific SETA (Skills Education Training Authorities), in compliance with the Skills Development Act. Employers must be mindful to complete IT180’s in respect of all learnership agreements for which a tax allowance should be successfully claimed.

The allowance will be higher for employees who have a disability (R120 000, compared to R80 000 for people without disability).

The Learnership Tax Allowance constitutes a deduction in addition to other income tax deductions allowable to employers for the employment and skills development of employees. If a learnership is terminated before a period of 12 full months, the employer will be entitled to a pro rata portion of the commencement allowance, regardless of the reason for the termination of the learnership. The learnership tax allowance is available until April 2022.