Our clients regularly enquire about the intricacies relating to learner stipends including the payroll implications, the various tax incentives as well as the recommended amount to pay a learner. We provide answers to some of the most frequently asked questions below:

Whose payroll should the learner be placed onto?

Learners can be placed on the Lead Employer’s payroll or on the payroll of an outsourced provider, such as Progression.

Outsourcing the payroll can be helpful if the learner is hosted externally, as this allows leave to be managed more effectively by the outsourced company. The outsourced payroll can be in the Lead Employer’s registered name and the employment contract will still be between the Learner and the Lead Employer, even if the learner is hosted externally.

Placing learners on the company’s internal payroll is beneficial for learners that are based at the Lead Employer and the employer is responsible for managing learner time and attendance.

What tax benefits can I claim for employing a learner?

  1. You can benefit from the ETI – This is an Employment Tax Incentive to encourage employers to employ youth and is applicable to employees (including learners) between the ages of 18 and 29. An employer can claim the incentive by decreasing the amount of PAYE that is payable to SARS by a specific amount, depending on the value of the monthly stipend paid to a qualifying learner.
  2. You can claim a Learnership Tax Incentive – This allows employers to claim a section 12H allowance in respect of all qualifying learnership agreements entered in a year, provided there is a formal learnership contract in place.

 

A qualifying employer is entitled to two types of allowances, namely an annual allowance (deductible in any year of assessment during which a learner is a party to a registered learnership agreement) and a completion allowance (deductible in the year in which the learner successfully completes the learnership). Both the annual and completion allowances vary depending on the NQF level of the qualification as well as whether the person has a disability or not.

The Learnership Tax Incentive has been extended by two years. The extension is effective from 1 April 2022 until 31 March 2024, and employers can still claim the applicable tax allowances for learnership agreements entered on or before 31 March 2024.

You can claim this incentive by submitting a IT180 at the start of the learnership programme and then again at the end of the learnership programme for all learners in that measurement period.

Do I need to pay UIF for my learners?

With effect from 1 March 2018, and in accordance with the Taxation Laws Amendment Act of 2017, the following employee categories must no longer be excluded from contributing to UIF: Learners employed in terms of section 18(2) of the Skills Development Act. Learners and employers are therefore required to contribute towards UIF.

Do I need to include learner stipends in my SDL calculation?

Registered employers must contribute for each employee to whom remuneration is paid, unless they fall into one of the exempted categories in section 3(5) of the SDL Act. The most common group of exempt employees is learners under section 18(3) of the Skills Development Act. Therefore learner stipends are not included in the calculation of SDL.

How much should I pay a learner as a stipend?

The National Minimum Wage Act specifies certain minimum amounts to be paid to learners, based on the NQF level of the specific qualification. However these amounts are quite low, in general, and Progression recommends paying learners more in order to sufficiently cover their living expenses and to reduce the likelihood of learners dropping out of the programme. Currently, the average learner stipend being paid by Progression’s clients is R4500- R5500 per month.

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