Skills levy and SETA grants: you pay 1%, and can claim some of it back

At a glance

The levy: 1% of total payroll, paid monthly through your SARS EMP201

Exempt: Employers whose payroll is not expected to exceed R500,000 over the next 12 months

Mandatory grant: 20% of the levy you paid, if your SETA approves your Workplace Skills Plan and Annual Training Report

Deadline: 30 April each year. The 2026 deadline has passed, so the next one is 30 April 2027

Miss it: You forfeit the 20%, which goes to the SETA's discretionary pool

Do not rely on talk of a 40% grant. One website says the 2026 Budget doubled the mandatory grant from 20% to 40%. Every other source we found, including SETA communications, still says 20%. Check your SETA's current rules before promising a client more.

Do you pay the levy, and what would you get back?

Skills levy: quick figures

On an annual payroll of R1.2 million, the levy is R12,000 a year — R1,000 a month. The 20% mandatory grant is about R2,400, if your SETA approves your submission.

If your payroll is not expected to exceed R500,000 over the next 12 months, you are exempt from the levy.

How the system works

You pay the levy to SARS. SARS passes it on, and your SETA sets the grants.

Your SETA is based on your main business activity. A business in more than one sector should confirm which one applies.

Employers appoint a Skills Development Facilitator, who prepares and submits the plan and report.

The plan (WSP) says what training you intend to do. The report (ATR) says what you did.

Steps to claim your 20%

1. Register with your SETA.

2. Appoint a Skills Development Facilitator.

3. Gather your training records and workforce data for the year.

4. Submit the WSP and ATR to your SETA by 30 April.

5. Keep your approval, because the grant depends on a compliant submission.

Beyond the 20%: discretionary grants

SETAs also fund specific training programmes from a discretionary pool, often for learnerships, apprenticeships, bursaries and other PIVOTAL programmes. These need a separate application, usually in an advertised window, and one practitioner source suggests discretionary funding can add substantially to the mandatory grant. Rules and amounts differ by SETA, so treat that as a pointer to look, not a promise.

Two other benefits sit alongside the grants. Learnerships can earn the section 12H tax allowance for agreements entered into before 1 April 2027, and skills development counts toward your B-BBEE scorecard. For businesses that sell to government or large corporates, the scorecard points often matter more than the grant.

If you are a foreign-owned company or employ foreign nationals

The levy depends on payroll, not on who owns the company. A South African subsidiary of a foreign group pays if its payroll is over the threshold.

Training can be a genuine part of an application for a work visa, where employers must show skills transfer to South Africans. A good training record helps on both fronts.

The proposed Employment Services Amendment Bill points the same way, with skills transfer plans for foreign hires.