The question gets asked in almost exactly these words, repeatedly, and it almost never gets a proper answer. Does anyone know how to claim the levy back if the training was done at the company?
When it was asked recently in a South African tax discussion group, the best reply was a phone number for a SETA switchboard. That is the state of the published guidance. Every article on levy recovery assumes you bought a course from somebody, and the employer who trained their own people is left to conclude that their training does not count.
It does count. The process is the same. The evidence is not.
Is in-house training claimable at all?
Yes, and the confusion comes from the way the levy is usually explained rather than from any rule.
The mandatory grant returns 20% of the levy you paid, and it is released on a compliant Workplace Skills Plan and Annual Training Report lodged with your SETA by 30 April. Neither of those documents asks where the training was bought. The plan sets out the training you intend to deliver. The report sets out the training you actually delivered. Internal sessions belong in both, in the same way and in the same format as anything you paid an outside provider for.
What the SETA is testing is whether the training happened and whether you can prove it. Nothing in that test favours an invoice from a third party.
The misreading is understandable. Almost all the published guidance on levy recovery is written by training providers, and a provider explaining how to claim the levy back naturally describes a process that starts with buying a course. That is one route through the system, not the only one, and the employer developing people with their own supervisors and their own equipment is inside the same rules.
Not sure what your own SETA has actually paid you? Send us a payroll summary and your SETA registration and we will tell you what you were entitled to and what was claimed.
Request a call backWhat evidence does internal training need?
This is the whole answer, and it is worth stating precisely because it is the part nobody publishes.
Proof of expenditure is central to the Annual Training Report. Where training was delivered by an external provider, the SETA wants the invoices. Where training was done internally, the organisation needs to submit the attendance registers.
That is the swap. An in-house session has no invoice because no money changed hands with anybody outside the business, and the register takes its place as the primary evidence. An employer holding a year of signed attendance registers is in a better position than an employer holding a year of invoices with no record of who actually attended.
A register that will survive verification carries the names of the people who attended, the date, the programme or session title, who facilitated it, and their signatures. If the session produced anything, a competency sign-off, a test result, a certificate of attendance, keep that against the register.
The rest of the report follows the same structure whether training was internal or bought. Your SETA wants the list of interventions delivered in the period, the number of employees trained broken down by race, gender and disability, proof of expenditure for what was paid for, and completion records where they exist.
What counts as in-house training?
Considerably more than employers write down, which is why so many first reports look thinner than the training year actually was.
The supplier who spent a day on site showing your operators how to run a new machine delivered training. The internal session on a revised method statement is training. The senior fitter who took two apprentices through a procedure in a structured way, with a record of it, is training. Induction that covers a new employee's duties is training. Toolbox talks with a register are training.
merSETA's own definition of a learning programme runs wide enough to accommodate most of this. It includes structured sets of learning experiences leading to a qualification or part-qualification, but also skills programmes, skill sets, adult education and training, credit-bearing and non-credit-bearing short courses, and structured workplace learning where a learner is mentored by a qualified person in the actual context of a workplace.
Non-credit-bearing short courses are named as a category of their own, defined as short learning programmes where credits are not awarded, and they can be funded through mandatory grants, discretionary grants and non-PIVOTAL programmes. So the absence of accreditation does not put internal training outside the system.
Where is the honest limit?
There is one, and pretending otherwise would set you up for a bad verification.
Training that does not lead to a qualification or part-qualification registered on the National Qualifications Framework falls into what SETAs call non-PIVOTAL. That category is real, reportable and fundable, but it carries a lower ceiling. Non-PIVOTAL programmes still have to address the SETA's own objectives and sector priorities to count for anything, and the larger share of discretionary funding is reserved for programmes that do lead to qualifications.
So a training year built entirely from internal sessions is a compliant year with a low ceiling. It will support the mandatory grant. It will not build the case for discretionary funding, and it will do less on the skills element of your B-BBEE scorecard than the same money spent on credit-bearing programmes, because the points follow what the training was rather than what it cost.
The productive conclusion is not to abandon internal training. It is to report all of it, and to place one or two credit-bearing programmes alongside it deliberately.
What will your SETA refuse to fund?
One category catches employers in exactly the sectors where internal training is heaviest.
merSETA states that it will not fund training for re-licensing purposes undertaken as part of legislative requirements, because re-licensing forms part of an employer's legal obligations. For a construction or manufacturing business, that removes a real slice of the annual training spend. Statutory tickets that have to be renewed on a cycle are a legal cost, not a skills investment, in the SETA's view.
Record it anyway. It belongs in the training record, it is relevant to your own workforce planning, and the distinction between what is reported and what is funded is the SETA's to draw, not yours to pre-empt.
Does more internal training mean a bigger grant?
No, and this misunderstanding costs employers real effort in the wrong direction.
The mandatory grant is 20% of the levy you paid. The levy is 1% of your payroll. So the grant is fixed by your wage bill, not by your training budget. An employer with a R10 million payroll pays roughly R100 000 a year in levy and can claim roughly R20 000 back, whether they spent R5 000 on training or R500 000.
merSETA puts the same point from the other direction. Amounts paid to employers for planned learning interventions may not equal the amount requested, because the value of the mandatory grant can be less than the training costs the employer projected.
Which reframes the exercise usefully. You are not building a case for reimbursement. You are meeting a condition. The training has to be real and documented, and once it is, the grant is what it is. Extra training earns its return through capability, the scorecard and access to discretionary funding, not through a larger mandatory grant.
Is the tax deduction a separate thing from the grant?
Yes, and conflating the two is how employers end up thinking they have claimed when they have not.
The grant is money paid to you by your SETA out of the levy. The tax treatment of training expenditure is a separate matter handled in your income tax return, where expenses directly related to training, such as course fees, materials and facilitator fees, are ordinarily deductible in the normal course of business. Internal and external training both attract that treatment, subject to the usual rules.
They are claimed in different places, from different bodies, on different timetables, and one does not affect the other. An employer who deducted training costs has not thereby claimed a mandatory grant, and an employer who received a grant has not lost a deduction.
There is a third, unrelated incentive worth knowing about if your workforce is young. The Employment Tax Incentive reduces the cost of employing younger and less experienced workers by sharing part of the wage cost, and it operates through the payroll rather than through the SETA. It is not a skills development mechanism and it is not claimed on a Workplace Skills Plan, but it frequently applies to the same employees who appear in one.
Keep the records once and use them three times. The attendance register that evidences an intervention for your SETA is also the record behind the training expense in your accounts.
Does the levy still come off if you train nobody?
Yes, and this is the trap the original question was circling.
The levy is 1% of total remuneration, paid monthly to SARS on the EMP201 alongside PAYE and UIF, due by the seventh of the following month. It is an employer contribution and it cannot be deducted from employees' wages. Late or short payment attracts interest and penalties under the levy legislation.
None of that is contingent on training anybody. The money leaves whether or not a single course is run and whether or not anything is ever claimed back. An employer doing plenty of internal training and reporting none of it is paying the levy and forgoing the grant, which is the most common version of this situation and the easiest to fix.
What is worth changing this month?
Three things, none of which require a budget.
Start a single training register for the business. One place where every session is recorded as it happens, internal and external, with date, title, facilitator, attendees and outcome. Most of the difficulty in April is reconstruction, and reconstruction is what verification finds.
Go back through the last twelve months and capture what you can still evidence. Supplier sessions, inductions, internal upskilling. Where an attendance register exists, the intervention is reportable. Where it does not, you have found the gap in the process rather than in the training.
Decide on one credit-bearing programme for the coming year. Not to replace what you do internally, but to raise the ceiling on what the year can achieve. That single decision is usually the difference between a compliant submission and a useful one.