Training and development for employees plays a vital role in the growth and success of your business. But, finding affordable and correct tools might be where the concerns start creeping in. Suddenly you’re left thinking… “They’ll learn on the job. Resources are limited.”
Fortunately, you’d be pleased to know that the learnership allowance is intended to be an incentive for employers to encourage skills development within their workforce, with the hope to create jobs and economic growth.

It’s effectively a tax deduction, which an employer (company or individual) may claim - if it’s paying for training or an apprenticeship - for any of its employees in terms of a registered learnership agreement. Now, this is an agreement registered with SETA (Skills Education Training Authorities) in accordance with the Skills Development Act. Note, the employer must complete IT180's in respect of all learnership agreements for which a tax allowance is claimed. The allowance will be higher for employees -partaking in the learnership agreement- who have a disability (compared to those without a disability).

The allowance is made up of two parts:

1. An annual allowance – this is available for each year of assessment in respect of which the learner partakes in the learnership. It’s apportioned, if the agreement was not in effect for the full year.

2. A completion allowance – a once off allowance available in the year of assessment in which the learner successfully completes the registered learnership agreement. It’s claimed in full regardless of which month, in the year, the learnership was completed. It’s claimed in addition to the annual allowance, meaning that in the year of completion, the employer can claim both the annual allowance and the completion allowance.


For learnerships entered into before 1 October 2016:

The employer can claim a tax allowance of R30,000 (R50,000 for disability) per year for each registered learnership agreement it has between itself and an employee.

The employer can claim a R30,000 "completion allowance” (R50,000 for disability) for each learner that completes their learnership during the year. If the Learnership exceeds 24 months, then R30 000 is multiplied by the number of consecutive 12-mth periods within the duration of that learnership.

For learnerships entered into after 1 October 2016 but before 1 April 2024:

The allowance will depend on the NQF (National Qualification Framework) level of the learnership. For NQF level 1-6, the employer can claim a tax allowance of R40,000 (R60,000 for disability) per year and NQF level 7-10, It can claim a tax allowance of R20,000 (R50,000 for disability) per year.

The employer can claim a R40,000 "completion allowance" for NQF level 1-6 (R60,000 for disability) and R20,000 for NQF level 7-10 (R50,000 for disability).

If the Learnership exceeds 24 months, then the completion allowance is multiplied by the number of consecutive 12-mth periods within the duration of that learnership.

See below for an example:

Employer A is a company with a December year end.

All learners have no disabilities.

Year-ended December 2016

Julie annual allowance: R 30 000 X 8/12 months = R20 000
Michael annual allowance: R 40 000 X 3/12 months = R10 000
Sipho annual allowance: R 20 000 X 2/12 months = R3 333

Total Section 12H allowance for Employer A = R33 333

Year-ended 31 December 2017

Julie annual allowance: R 30 000 X 12/12 months = R30 000
Michael annual allowance: R 40 000 X 12/12 months = R40 000
Sipho annual allowance: R 20 000 X 12/12 months = R20 000

Total Section 12H allowance for Employer A = R90 000

Year-ended 31 December 2018

Julie annual allowance: R 30 000 X 10/12 months = R25 000
Julie completion allowance: R30 000 X 2 consecutive 12-month period = R60 000
Michael annual allowance: R 40 000 X 3/12 months = R10 000
Michael completion allowance: R40 000 x 1 full 12-month period = R40 000
Sipho annual allowance: R 20 000 X 10/12 months = R16 667
Sipho completion allowance: R20 000 X 2 consecutive 12-month period = R40 000

Total Section 12 H allowance for Employer A = R191 667