In its effort to promote skills development and job creation, the government offers very attractive incentives to employers who invest in their staff. These incentives can easily pay for the costs of training and at times even include the learner’s salary. Amongst the incentives are:
- Reduced salary costs: Learners are willing to work for less. Typically a learner starts out on a monthly salary of R1500 compared to an ordinary entry-level salary for a front-line customer service employee of R4500. This means that a company can save up to R 36 000 per year on salaries per learner.
- Tax break for the training of new and existing employees: A company can claim an amount equal to the annual salary of a new learner at the beginning of the programme (up to a maximum of R 30 000) and the same again at the end of the programme. At a corporate tax rate of 28% that equals a maximum saving of R16 800. The training needs to lead to a national qualification
- Discretionary Grant: Various SETAs make discretionary grants available to their members to promote the skills development projects. These grants often cover the costs of training and at times even the learnership allowances.
- Mandatory Grant: Employers can also reclaim part of the skills levy that they have paid, subject to the employer meeting the necessary requirements set by their respective SETA.
- The Department of Trade and Industry offers further grants for the training of people as part of its support for the BPO industry.
By taking advantage of these incentives an employer does not only substantially reduce its staffing and training costs but also enjoys the benefit of having well-trained, quality employees.