Why training your staff through learnerships pays
A registered learnership improves your team, lowers your company tax and builds your B-BBEE score, all at once. Here’s how each benefit works.
Section 12H learnership tax allowance
When your company enters into a registered learnership agreement with a learner, Section 12H of the Income Tax Act allows you to deduct an extra allowance, over and above the learner’s salary:
- up to R40,000 for each year of assessment the learner is registered (NQF Levels 1 to 6)
- up to R40,000 more when the learner successfully completes the learnership
For a 12-month learnership, that’s up to R80,000 per learner. Higher amounts apply for learners with disabilities.
The allowance is a deduction from taxable income, not a cash rebate. Here’s what it means for a company training ten cleaners on a 12-month learnership:
- Registration allowance (10 × R40,000)
- R400,000
- Completion allowance (10 × R40,000)
- R400,000
- Total deduction from taxable income
- R800,000
- Less tax paid, at 27%
- R216,000
Deadline: the incentive applies to learnership agreements entered into before 1 April 2027, unless government extends it again.
Allowances are pro-rated if the learner is registered for less than 12 months in a tax year, and earlier allowances must be added back to income if a learner leaves before completing (except in cases of death or incapacity). Source: SARS Interpretation Note 20. This is general information, not tax advice; confirm your company’s position with your tax practitioner.
B-BBEE skills development points
Skills development is one of the priority elements of the B-BBEE scorecard. If your company scores below its sub-minimum (40% of the points available), your B-BBEE level drops by one.
Under the amended Generic Codes, the target for spending on learning programmes for Black people is 3.5% of your leviable amount (your payroll), and learnerships count towards it.
Why your B-BBEE level matters
When your clients buy from you, your level decides how much of that spend counts on their scorecard:
| Your B-BBEE level | Your client can count |
|---|---|
| Level 1 | 135% of spend |
| Level 2 | 125% of spend |
| Level 4 | 100% of spend |
| Level 8 | 10% of spend |
A better level makes you the supplier your clients would rather use, and it carries weight when you tender.
Recover part of your skills levy
If your annual payroll is over R500,000, you pay a Skills Development Levy of 1% of payroll every month. Submit your Workplace Skills Plan and Annual Training Report to your SETA by 30 April, and you can claim back 20% of the levy as a mandatory grant. Learnerships may also qualify for SETA discretionary grants.
We can handle the whole process as your Skills Development Facilitator.
Questions companies ask
What is the Section 12H learnership allowance?
Section 12H of the Income Tax Act lets an employer deduct an extra allowance, on top of the learner’s salary, for each registered learnership agreement. For learnerships at NQF Levels 1 to 6 it is up to R40,000 for each year of assessment the learner is registered, plus up to R40,000 when the learner completes. Higher amounts apply for learners with disabilities.
How much tax can my company save per learner?
For a 12-month learnership at NQF 1 to 6, the allowances can total R80,000 per learner. That is a deduction from taxable income, so at the 27% company tax rate it reduces the tax you pay by up to about R21,600 per learner.
When does the Section 12H incentive end?
The incentive currently applies to learnership agreements entered into before 1 April 2027. Government extended it in 2024 to allow time to evaluate it. Any further extension would be announced in a future Budget.
Is the 12H allowance a rebate?
No. It is often called a rebate, but it is an allowance deducted from your taxable income, not a cash refund. The saving is the allowance multiplied by your tax rate.
Do learnerships count towards B-BBEE?
Yes. Spending on learnerships for Black people counts towards the skills development element of the B-BBEE scorecard, which is a priority element. Companies that miss its sub-minimum drop a B-BBEE level.
What is the mandatory grant?
Employers with an annual payroll over R500,000 pay a Skills Development Levy of 1% of payroll. If you submit your Workplace Skills Plan and Annual Training Report to your SETA by 30 April, you can claim back 20% of the levy as a mandatory grant.
Information checked 21 October 2026 against SARS, the B-BBEE Codes of Good Practice and the SETA Grant Regulations.