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Overview of what Learnerships entail
Essentially, Learnerships encompass two main elements:
- Theory
- Relevant practical work experience
A Learnership is conducted over a specified time period which is usually 12 months.
There is a requirement for an agreement to be put in place between all parties to the Learnership which is referred to as a four-party agreement and is drawn up between the learner, the learner’s employer, the training services provider and the SETA.
Once a learner has successfully completed the Learnership and deemed to be competent, they will be awarded with a National Qualification. If a learner has reached competence in only parts of a National Qualification then those credits towards the National Qualification will be awarded to the learner.
What is the context in which a Learnership can be pursued?
A Learnership towards a full National Qualification can be achieved in the following ways:
- Full Training Learnership
A Full Training Learnership is pursued when the learner receives the full extent of the training required to complete the National Qualification and where the learner possesses little if any work experience or former training relevant to the National Qualification in question.
- Recognition of Prior Learning (RPL)
The approach to a Recognition of Prior Learning (RPL) Learnership is carried out on the assumption that learning is in place based on former training and/or previous work experience. The RPL Learnership is suitable for learners who are working in a certain capacity yet do not possess a qualification in the required field. In the case where a learner has a certain degree of work experience and has already received training in various appropriate short courses the learner will not be required to undergo the full extent of the theoretical training component of the Learnership. In this case a blended approach is applied using a combination of recognition of prior learning and the appropriate theoretical training in order to obtain the qualification.
Funded versus Unfunded Learnerships
Funded Learnerships
With funded Learnerships, a learner’s employer will submit an application for funding to the relevant SETA which funds will be allocated towards a full learnership qualification. However, in this case there are two types of learnerships that can be applied for:
- Unemployed Learnership
For unemployed Learnerships the employer would employ new staff on a temporary, permanent or contract basis. In this regard the SETA will award funds which go towards supplementing the learner’s salary during the period of the Learnership and covering the training costs of the learner to complete the qualification.
-
Employed Learnership
An employed Learnership is appropriate when an employer needs existing staff members to obtain a formal qualification.
Unfunded Learnerships
Should there be a case whereby no funding for Learnerships is available from the SETA concerned an employer may opt for an unfunded Learnership. In this case all costs of the Learnership will be borne by the employer. Nevertheless, when a company enters into one a Learnership agreement with one or more learners companies qualify for a tax rebate upon the learners completing the qualification which can be offset against training and assessment costs.
Learnership Tax Implications
When employees undertake to complete a Learnership, an employer will qualify for a tax allowance based on an amount determined by SARS that is deducted from the company’s outstanding funds due to SARS. An employer will qualify for this tax rebate regardless of whether the Learnership was funded by the relevant SETA.
Learnerships for Existing Employees
The employer is entitled to apply for a tax rebate when an existing employee undertakes a Learnership under the following circumstances:
- At the commencement of the Learnership an allowance of R40 000 may be applied for.
- Upon completion of the Learnership a further R40 000 can be applied for.
Hence, the amount claimed : R80 000 x 28% (28% being the normal tax rate) = R22 400 which is deducted from the company’s amount owing to SARS per person completing the Learnership. Since this is a tax deduction, companies will only benefit from the whole or parts of this deduction if they forecast to make taxable profits. Competence in the said Learnership does not need to achieved to qualify for this initial rebate.
These allowances are increased to R60 000 for learners with disabilities.
In the case of Learnerships that are less than 12 months, a pro rata portion of the allowance will be awarded irrespective of the reason for the Learnership not being completed during the 12 month period.
Should an employee leave the company prior to completing the Learnership the company is no longer required to reverse the amount of the allowance claimed upon commencement of the Learnership.
Case Study: Example of 100 employees undertaking a Learnership
The example below illustrates how R2 240 000 (R22 400 x 100) is deducted from the company’s tax amount owed to SARS
This tax saving is achieved by calculating the taxable amount of income of a company with and without the tax deduction of the Learnership. Therefore, the difference between the two taxable amounts represents the company’s actual tax saving. To illustrate this calculation let’s assume that a company achieves a R40 million revenue and its total expenses and deductions amount to R10 million. If the company deploys 100 Learnerships for abled learners the company’s tax saving is calculated in the following manner:
| Without Learnerships | With Learnerships |
| R40 m = Revenue | R40m= Revenue |
| minus R10 m= Expenses | Minus R10m = Expenses |
| Minus R8 000 = Learnership Tax Rebate | |
| R30m = Taxable Profits | R22m= Taxable Profits |
| Tax Payable | Tax Payable |
| R30m x 28% = R8.4m | R22m x 28% = R6.16m |
| When running 100 Learnerships the actual tax saving is: | |
| R8.4m – R6.16m= R2.24m | |
Since this benefit is deducted as opposed to paid back, often, companies do not realize this important benefit. If you use our example of the R2 240 000 tax deduction in the case where the company did not enter into any Learnership agreements the company would need to forfeit this amount to SARS.
Companies who do not obtain funds for Learnerships from one of the SETAS may nevertheless put employees on an unfunded Learnership program even though they will need to pay for the training through a training services provider. Such funds may be offset by the tax rebate.
Learnership Benefits
Some of the benefits of a Learnership are highlighted as follows:
- A Learnership affords the opportunity for employees to obtain a national qualification while they are working which they may not have been able to afford to do in their own time or at their own expense.
- When employees are given recognition for their experience and the opportunity to upskill this results in increased levels of morale and job satisfaction.
- Studies reveal that the employee attrition rate is reduced when employees are given the opportunity to complete a Learnership.
- Employee morale is boosted when the company is prepared to invest in their training and development.
- Completing a Learnership provides a solid platform from which individuals can further develop themselves.
- Significant savings and tax rebates can be achieved.
- Tax rebates can be used to offset any additional training costs and can also be put towards the annual training budget allocation.
- Learnerships in certain instances can reduction in a reduction in Skills Development levies.
The learnership may be subject to further benefits under the Employment Tax Incentive.
BBBEE Benefits
In terms of the Generic BBBEE Scorecard, Skills Development component is a key priority. It carries 20 points plus an additional 5 bonus points. The number and spend on Learnerships for designated groups can contribute substantially towards increasing one’s BBBEE Score.
BOTi offers Learnerships in respect of the following qualifications:
| Learnerships – Qualifications | |
| *National Certificate: Generic Management | *Further Education and Training Certificate: Generic Management |
| SAQA ID 59201 | SAQA ID 57712 |
| NQF Level 05 | NQF Level 04 |
| Credits: 162 | Credits: 150 |
| Accredited | Accredited |
| Course Duration: 30 days over 12 months | Course Duration: 30 days over 9 – 12 months |
| National Certificate: Management | General Education and Training Certificate: Business Practice |
| SAQA ID 83946 | SAQA ID 61755 |
| NQF Level 03 | NQF Level 01 |
| Credits: 120 | Credits: 121 |
| Accredited | Accredited |
| Course Duration: 24 contact days over 12 months | Course Duration: 24 contact days over 12 months |
| National Certificate: New Venture Creation (SMME) | Further Education and Training Certificate: New Venture Creation |
| SAQA ID 49648 | SAQA ID 66249 |
| NQF Level 02 | NQF Level 04 |
| Credits: 138 | Credits: 149 |
| Accredited | Accredited |
| Course Duration: 24 contact days over 12 months | Course Duration: 30 contact days over 9 – 12 months |
| *National Certificate: Business Administration Services | *Further Education and Training Certificate: Business Administration Services |
| SAQA ID 23833 | SAQA ID 61595 |
| NQF Level 02 | NQF Level 04 |
| Credits: 120 | Credits: 140 |
| Accredited | Accredited |
| Course Duration: 24 contact days over 12 months | Course Duration: 20 contact days over 12 months |
| *National Certificate: Business Administration Services | Further Education and Training Certificate: Project Management |
| SAQA ID 67465 | SAQA ID 50080 |
| NQF Level 03 | NQF Level 04 |
| Credits: 120 | Credits: 136 |
| Accredited | Accredited |
| Course duration: 30 contact days over 9 – 12 months | Course Duration: 24 contact days over 12 months |
| National Certificate: Information Technology: End User Computing SAQA ID 61591 NQF Level 03 Credits: 130 Accredited Course duration: 30 contact days over 12 months
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*Recognition of Prior Learning (RPL) Learnership Qualification Programs