The R100,000 Learnership That Costs You R22,500: An Intro to "Incentive Stacking"

What if your B-BBEE Skills Development spend wasn't just a compliance cost, but one of your smartest financial strategies? Many South African businesses fail to realize that the government has created a powerful framework of layered incentives that, when "stacked" together, can dramatically reduce the net cost of a learnership to almost zero.

This "incentive stacking" combines benefits from SETA grants, SARS tax allowances, and PAYE subsidies for a single learner. At White Paper Systems, we are experts in navigating this complex landscape for you.

Here’s how it works for one qualifying learner:

Layer 1: The SETA Discretionary Grant

Beyond the 20% Mandatory Grant, your SETA controls a massive "Discretionary Grant" fund (from 49.5% of levies). This fund is specifically used for PIVOTAL programs like learnerships. By applying successfully, you can receive funding to cover all or part of the learner's training costs and stipends.

WPS Solution: We identify and manage these complex grant applications on your behalf to secure this funding.

Layer 2: The Section 12H Learnership Allowance

For every learnership agreement you register with a SETA , SARS grants you a substantial "additional" tax deduction, over and above your normal expenses. This includes an Annual Allowance (e.g., R40,000 for an NQF 1-6 learnership) and a Completion Allowance (e.g., another R40,000). This directly reduces your company's taxable income.

WPS Solution: We ensure every learner we place is on a correctly registered learnership, guaranteeing your eligibility for this allowance.

Layer 3: The Employment Tax Incentive (ETI)

If your learner is a qualifying young South African (18-29 years old) earning within the set thresholds, you can claim the ETI. This is not a tax deduction; it is a direct subsidy that reduces your monthly PAYE tax bill. For a learner earning R4,000/month, this can be R1,500 back in your pocket every month for the first year.

WPS Solution: We specifically recruit and place ETI-eligible candidates  to maximize this immediate cash-flow benefit for you.

The Result

When you stack these incentives, a learnership program with a gross cost of over R100,000 can result in a net cost of just R22,500. And you still get to claim the full R100,000 expenditure on your B-BBEE scorecard.

Stop leaving money on the table. Contact White Paper Systems to build your workforce the smart, cost-effective way. www.whitepaperconcepts.co.za