What are Discretionary and Mandatory SETA grants? | SETA Funding

If you’re paying monthly Skills Development Levies, there is no reason for you to be missing out on claiming back your Mandatory SETA grant. In this article, we’ll explain what Skills Development Levies are and also break down the difference between Mandatory and Discretionary SETA grants.

What is the Skills Development Levy?

The Skills Development Levy (SDL) is a mandatory monthly payment that every South African employer earning over R500 000 a year is obliged to pay. It equates to 1% of their payroll, and is paid to SARS together with monthly PAYE and UIF.

Skills Development Levies are distributed between the National Skills Fund (NSF) and the SETAs. The NSF and SETAs then oversee the disbursement of grants to funds, programmes and employers across South Africa for training and upskilling of the country’s workforce.

A portion of the funds distributed to the SETAs is applied to the internal administration of the SETAs (10%) and to the Quality Council for Trades and Occupations, or QCTO ( 0.5%). 

What are the different types of SETA funding

The SETAs can disburse funds to employers in South Africa through two forms of grants, these are:

The Mandatory Grant has an important function. It encourages employers to provide data to their SETA on their workforce and skills needs based on their annual Workplace Skills Plans (WSPs) and Annual Training Reports (ATRs). 

The SETA is mandated to pay back 20% of the Skills Development Levy each year, to employers that successfully submit their necessary annual submissions. 

The remaining 80% of the Skills Development Levy is awarded to employers at the discretion of the SETAs. Employers need to apply for this funding through the relevant channels with their respective SETA. 

These channels include submission via the relevant SETA’s online platform, sending through a Letter of Intent (LOI), and responding to SETA submission windows. Each SETA specifies how it will receive applications for these grants. 

The aim of these grants is to encourage stakeholders and employers to contribute to skills development, address critical and scarce skills shortages, and create jobs and employment opportunities. 

 

Interested in learning more? Download our free How to Secure SETA Funding Guide. This guide is the first of its kind and was developed to help more South African businesses secure the funding they need to implement impactful training solutions.