1. Making Training, B-BBEE, & Tax Incentives Work An Illustration
Friday, 16 November 2018

2. Assume Company A Turnover R100 000 000.00 NPAT R 40 000 000.00
LA R
Procurement R
Employees 200

3. Legislative / Complience Burdens
PAYE (Assumed at 20%) R
Skills Dev. Levy (1% of LA) R
B-BBEE Targets – Skills Development
(Additional 6% of LA) R
9 Black People on LS 3:1:1:2:1:1 ( )
9 Black Unemployed 3:1:1:2:1:1 ( )

4. B-BBEE Sollution (9.6/20 = 48% for SD)
Combine and by placing 9 Previously Unemployed Black People on Learnerships in Ratio 3:1:1:2:1:1
Score 4 points under
Score 4 points under
Assume a Training Cost of R per Learner and a Annual Stipend of R24 000
Score 1.6 points under

5. 20.25% Spend for 48% of SD Points
B-BBEE Saving
Required Spend: R2.4 Million
Actual Spend: R
20.25% Spend for 48% of SD Points

6. Learnership Allowance (IT 180)
An allowance which may be deducted from the employer’s income from trade when the employer’s taxable income is determined.
Till 1 April 2022
9 Learners on learnerships
R Annual Allowance x 9 = R
R104 29% Tax Rate

7. Other SARS Deductions
Both the Training Fees and the Stipend of the Learner are allowable expenditure items that are not effected by the Learnership Allowance
R Training Cost x 9 = R
R Stipend Spend x 9 = R
R486 29% Tax Rate = R

8. Employment Tax Incentive
Reduces the amount of PAYE payable on a monthly basis
Can be claimed for a 24 month period
Till 28 Feb 2019
9 Qualifying Learners
R1 000 x 9 x 12 = R

9. Real Cost of Training Stipends @ 9xR24 000 R216 000
9xR R
Sub-Total R
Minus LS Allowances R
Minus SARS Deductions R
Minus ITA Deductions R
Total R

10. ETI Employer Requirements
Must be registered for PAYE
Not a public or government (All spheres) entity
Is not disqualified for displacement (R30 000 penalty per displaced employee)

11. ETI Employee requirements
A SA Citizen or legal Asylum Seeker or Refugee
Is 18 to 29 years old
Is not a domestic worker
Is not a connected person to the employer
Was employed in the last 24 months
Earns R2000 – R6000

12. Calculating ETI Identify all qualifying employees
Work out the applicable employment period
Work out each employee’s “monthly remuneration”
Calculate the amount of the incentive per qualifying employee

13. ETI for 1st 12 Months ETI for 2nd 12 Months Remuneration Determination
Amount
R0 – R2000
50%
R0 – R1000
R2001 – R4000
Fixed at R1000
R1000
R4001 – R6000
R1000 – (50% of (Remuneration – R4000))
R999 – R0
ETI for 2nd 12 Months
Remuneration
Determination
Amount
R0 – R2000
25%
R0 – R500
R2001 – R4000
Fixed at R500
R500
R4001 – R6000
R1000 – (20% of (Remuneration – R4000))
R49 – R0