South African employers that pay the Skills Development Levy can potentially access funding through their relevant Sector Education and Training Authority (SETA), but the grant system is more complicated than a simple refund of the levy.
The Skills Development Levy is generally levied at 1% of an employer’s total remuneration, with employers with annual remuneration below R500,000 being exempt from paying the levy. SARS confirms that the levy is intended to fund skills development in South Africa. (South African Revenue Service)
For employers, the two main areas to understand are mandatory and discretionary grants. Mandatory grants relate to workplace skills planning and reporting, while discretionary funding is based on a SETA’s sector priorities and available budget. (Services ETA)
What are SETAs and why do they manage skills funding?
Sector Education and Training Authorities are responsible for managing skills development within their sector. South Africa has 21 SETAs covering different sectors of the economy. (Saqa)
Their powers are defined within the broader skills-development framework of the country. The Skills Development Act provides for sector and workplace skills strategies, learnerships and a levy-grant system for skills development funding. (Government of South Africa)
That means the SETA associated with your business sector can play a role in:
- workplace skills planning;
- reporting on employee training;
- mandatory grants;
- discretionary grants;
- learnerships;
- internships and work-integrated learning;
- artisan development;
bursaries and other skills-development interventions.
The available programme and funding types can vary between SETAs.
How much is the Skills Development Levy?
The levy is calculated at 1% of remuneration that an employer pays to employees. SARS notes that employers with total annual remuneration below R500,000 are exempt. (South African Revenue Service)
For example, if an employer has a levy liability of R100,000 for the relevant period, 1% of its applicable payroll would be R100,000 for the Skills Development Levy.
It does not, however, necessarily entitle the employer to a refund of the full amount.
The levy is part of a larger funding structure. A proportion of the levy is allocated to the SETAs and a proportion goes to the National Skills Fund, with SETA funds covering both mandatory and discretionary skills development grants at the discretion of the authority, as well as administration and quality functions. (Bankseta)
Mandatory grants: the 20% figure explained
One of the common misunderstandings surrounding the SETA system relates to mandatory grants.
Employers that are eligible to claim can receive a mandatory grant of 20% of the levies paid, subject to the relevant SETA’s rules and requirements. Services SETA, for example, states that qualifying levy-paying employers may claim 20% of the levy by submitting a Workplace Skills Plan (WSP) and Annual Training Report (ATR). (Services ETA)
A simple example would be:
R100,000 in qualifying levy payments × 20% = R20,000
This is an illustrative calculation rather than an indication that every employer will receive R20,000.
What are the WSP and ATR?
The Workplace Skills Plan (WSP) is a statement of skills development activities to be undertaken by an employer.
The Annual Training Report (ATR) is a report of skills development activities that have already taken place.
For mandatory grants, the general statutory deadline for submission is 30 April in the relevant year. Services SETA confirms the general deadline of 30 April and notes that an extension may be available. (Services ETA
Naturally, employers must refer to the requirements of their own SETA rather than a generic list of conditions. Services SETA, for instance, publishes its current mandatory-grant forms, templates and guidelines for employers. (Services ETA)
What are discretionary grants?
Discretionary grants are substantially different to mandatory grants.
They are given for skills development projects that support the priorities of the relevant sector and available budget. SETAs apply various factors such as their Sector Skills Plan and national skills development priorities when considering which discretionary grants to make. (Services ETA
Projects can include:
- learnerships;
- internships and workplace experience;
- artisan development;
- bursaries;
- skills programmes;
other approved skills-development projects.
However, employers should not make assumptions about how any individual programme’s grants are calculated.
Grant amounts, application requirements, funding windows and eligible programmes can vary significantly between SETAs and between funding cycles.
That is why figures seen online for individual learnership or internship grants should not be assumed to represent general SETA rates.
Learnership funding
A learnership combines structured learning with on-the-job experience and leads to a registered qualification. SAQA defines a learnership as a structured learning programme, involving learning and practical work experience, based on an agreement between the learner, institution and employer. (Saqa
SETAs can use discretionary funding to support learnership projects that meet the criteria.
An employer’s role can include providing an appropriate workplace environment, facilitating workplace learning and meeting reporting requirements within the agreement.
For unemployed South Africans, this is important because SETA-funded projects provide an opportunity to acquire structured workplace experience while earning a recognised qualification.
A learnership, however, is not a qualification in itself. There are requirements for entry to each programme, including educational qualifications, age requirements (where applicable), sector requirements and other conditions set by the organisation offering the learnership.
Internship and workplace experience funding
SETA funding can also cover workplace experience and internship projects.
The funding structure depends on the individual SETA and programme, however, which is why employers should look at the official funding notice from their SETA before finalising any plans.
Applicants should also distinguish between:
- an employer-funded internship;
- a SETA-supported internship;
- a work-integrated learning placement;
a graduate programme; and
a learnership.
These programmes can vary significantly in terms of eligibility requirements, length, funding and qualification outcomes.
Bursaries and skills programmes
Some SETAs also offer discretionary funding to support bursaries and skills programmes where these fit with their sector priorities.
A bursary funded by a SETA is normally not available to every student. The SETA or implementing organisation should publish eligibility requirements and application conditions for any such funding.
A skills programme can be aimed at a particular occupational group rather than a general training subsidy for any applicant.
Who can access SETA funding?
Applicability depends on the type of grant and the requirements of the relevant SETA.
For mandatory grants, the general principle is that an employer qualifies as a qualifying levy-paying employer and complies with the relevant skills planning and reporting process.
Discretionary funding covers a wider range of options, but it is not automatic. SETAs determine funding programmes according to their own sector priorities, resources and approved policies. (Services ETA
Some discretionary programmes may involve employers, training providers, non-profit organisations or other eligible stakeholders depending on the call for proposals.
Employers
Businesses that pay the Skills Development Levy should research which SETA applies to their economic activity and understand its annual grant requirements.
Training providers
Training providers should research the accreditation, registration and programme requirements that apply to the training that they plan to deliver. SAQA refers questions about current occupational qualifications and training to the relevant quality-assurance structures, including the QCTO. (Saqa
Learners and unemployed people
Individuals do not apply for a “20% mandatory grant”. Mandatory grants mainly apply to employers.
A person interested in a learnership, internship or training opportunity should look at advertised programmes and their application requirements rather than a general list of criteria.
Why the 80% figure can be misleading
The statement that “the remaining 80% is available for discretionary grants” requires important clarification.
The Skills Development Levy system does not simply divide an employer’s payment into 20% that returns to that employer and 80% that is distributed as discretionary grants.
Historical and current SETA financial reports show that the levy is distributed within a larger statutory framework. For example, BankSETA reported that 20% of levies is transferred to the National Skills Fund, with the remaining 80% allocated between mandatory grants, SETA administration and discretionary grants according to the applicable framework. (Bankseta
This is important because it prevents employers and members of the public from assuming that any levy money is available for discretionary grants.
When should employers apply?
Employers should be aware of their own SETA throughout the year.
For mandatory grants, the general due date is 30 April in relation to the WSP and ATR process. (Services ETA
Discretionary grants are different. A SETA can publish its own window for applications, including:
- opening and closing dates;
- eligible applicants;
- priority programmes;
- supporting documents;
application method; and
funding conditions.
For this reason, there is no general national closing date for discretionary grants that applies to all employers.
How to apply for SETA funding
Employers should follow this process:
1. Identify the correct SETA
Determine which SETA covers the employer’s primary economic activity.
2. Confirm levy registration
Confirm that the employer’s Skills Development Levy registration and related employer information is in order.
SARS provides registration information for employers that become liable for SDL. (South African Revenue Service
3. Prepare the WSP and ATR
For mandatory grants, prepare the relevant workplace skills information and training report in advance of the applicable deadline.
4. Watch for discretionary grant calls
Look at the relevant SETA’s official channels for current funding opportunities rather than relying on old advertisements.
5. Check every requirement
Carefully read the funding notice because requirements can include details of the project, learners, training providers, budgets and supporting documents.
6. Keep evidence of training
Employers should retain appropriate evidence of training and implementation because SETAs may ask for evidence when processing or monitoring funded projects.
What should job seekers know?
For South African job seekers, understanding the SETA system can help to separate legitimate opportunities from misleading advertisements.
A SETA grant is not the same thing as a job vacancy.
An organisation may be funded to provide training, but that does not necessarily guarantee employment for all participants at the end of the programme.
Applicants should ask:
- who is running the programme;
- which SETA is involved, if any;
- what qualification or training is on offer;
- where the programme will take place;
- how long it will last;
- whether a stipend is provided;
- who is eligible;
the closing date; and
the official method of application.
Applicants should also be wary of requests for money or sensitive personal information when applying for supposedly SETA-supported opportunities.
A practical checklist for employers
Before submitting an application, an employer should ask:
Mandatory grant
Is the business registered for SDL where required?
Is the employer associated with the correct SETA?
Has the WSP been prepared?
Has the ATR been prepared?
Are the required employee and training records available?
Has the application been submitted by the applicable deadline?
Discretionary grant
Is the funding window currently open?
Is the employer eligible?
Does the proposed project fit with the SETA’s sector priorities?
Are the appropriate training providers or partners recognised?
Are all supporting documents ready?
Has the employer read the specific funding agreement and payment conditions?
Important distinction: funding is not guaranteed
One of the most important considerations for employers and prospective learners is that SETA funding is never automatic.
A mandatory grant has specific statutory and SETA requirements.
Discretionary funding depends on the relevant funding programme, eligibility criteria, budget and approval process.
Individual SETAs can also publish their own forms, guidelines and funding notices. Services SETA, for example, currently publishes 2026/27 mandatory-grant resources for employers. (Services ETA)
This means that information from an old advertisement may no longer apply to a new funding cycle.
Why this matters for South African businesses and job seekers
The SETA system links the Skills Development Levy with workplace training and other skills-development programmes.
For businesses, understanding the distinction between mandatory and discretionary grants can help employers to plan their skills development needs.
For unemployed people and students, understanding how the system works can make it easier to identify legitimate learnerships, internships and other training opportunities rather than confusing a funding mechanism with a job vacancy.
The most reliable approach is always to verify a programme against the current information from the relevant SETA or other responsible organisation before submitting an application or providing personal information.
Source and verification
This article was independently produced using information from SARS, SAQA, the South African Government and SETA information published for employers. The Skills Development Act and official government information were used to verify the legal and structural context of the levy and SETA system. (South African Revenue Service
Readers should always check current grant windows, application forms, deadlines and eligibility requirements with the relevant SETA because these details can change between funding cycles.
Editorial policy
We endeavour to publish useful South African education, skills and employment information using identifiable sources and distinguish between verified information and guidance. Where programme details change, we update articles when reliable information is available.
Fact-checking and verification
Financial figures, statutory requirements and SETA processes are verified against official or authoritative sources where available. We do not accept third-party job or training advertisements as proof of a government or SETA programme without verification.
Corrections policy
If an error is identified, we review the underlying source and rectify the relevant information. Material corrections may be noted in the article so that readers can understand what was changed.
Disclaimer
This article is provided for general information and career and skills-development guidance. It is not legal, tax or financial advice and does not guarantee that an employer or learner will receive SETA funding. Always confirm current requirements directly with the relevant authority before making an application or financial decision.
