Businesses in the services sector can leverage a range of funding mechanisms to reduce staff training costs and promote workplace skills development in South Africa.
Employers can apply for Services Sector Education and Training Authority (Services SETA) grants, which may offset relevant expenses for learnerships, skills training and other approved programmes. The eligibility criteria for both mandatory and discretionary funding should be understood before allocating any budget.
Paying the Skills Development Levy does not guarantee grant approval for training expenditure. Employers must be familiar with the requirements for discretionary funding and verify the current application guidelines with Services SETA.
This article outlines the differences between the two funding types, training options and necessary paperwork for submitting a 2027 request.
Overview of Services SETA Grants
Services SETA provides funding through a combination of mandatory and discretionary grant structures to support skills development in the services sector.
Depending on eligibility, businesses receiving funding from this program can utilise it toward learnerships, skills programmes, and other relevant staff training and development needs.
There are two funding streams available to employers:
- Mandatory grants
- Discretionary grants
Each has different reporting and application requirements.
As the name suggests, mandatory grants are triggered by specific requirements contained in the Skills Development Act and its implementing regulations.
Discretionary grants are issued at the sole discretion of Services SETA for approved training interventions, but these grants may be subject to availability. Employers considering discretionary funding should consult the latest guidelines and application requirements issued by Services SETA.
The rest of this guide will explain the differences between the two funding streams, identify potential employers’ training needs and advise on the documents employers should prepare in advance of the application.
1. Mandatory Grants for Employers
Mandatory grants are for training interventions and skills development planning by qualifying employers in the services sector.
Eligible employers can apply for a mandatory grant, which is generally available at the rate of 20% of the Skills Development Levy actually paid, subject to the terms and conditions of the Skills Development Act and its implementing regulations.
Employers should consult the Services SETA website to determine the extent of funding, as well as the requirements for submitting a mandatory grant application.
Understanding Skills Development Levy Obligations
The Skills Development Levy generally applies to employers with a total annual payroll in excess of R500 000, subject to the terms of the Skills Development Act and its implementing regulations. Employers should confirm their levy obligations with the South African Revenue Service (SARS).
A Skills Development Levy usually accrues on 1% of leviable remuneration. Employers should consult SARS directly to understand their obligations, particularly if they are new to employing staff or have experienced a significant change in circumstances.
Mandatory Grant Requirements for Employers
Mandatory grants are generally paid to qualifying employers who submit a Workplace Skills Plan and Annual Training Report to Services SETA.
This section explains the process that qualifies for a mandatory grant in simple steps:
Step 1: Appoint a Skills Development Facilitator (SDF)
A Skills Development Facilitator (SDF) is responsible for ensuring that the business submits a Workplace Skills Plan and Annual Training Report to Services SETA.
Depending on the size and complexity of the enterprise, the SDF may be an employee or an external contractor appointed to provide the necessary services.
The appointed SDF must be authorised to deal with Services SETA and have the necessary credentials.
Step 2: Compile the Workplace Skills Plan
The Workplace Skills Plan identifies the training needs of the business.
As part of this process, the SDF should determine the skills that the business will need for its strategic plans and the training interventions that it will implement to address skills shortages.
For most businesses, a good Workplace Skills Plan is not about courses – it’s about identifying the skills that the business needs and the training programmes that will help fill the gap.
Step 3: Complete the Annual Training Report
An Annual Training Report should be compiled to report on the training events conducted in the tax year.
The report should reflect information about events that the business has actually held and received benefits from, and should include documentation and evidence that may be requested by Services SETA.
Step 4: Submit the Required Skills Development Reports
The SDF should submit the compiled Workplace Skills Plan and Annual Training Report to Services SETA according to the relevant instructions.
It is important to note that the deadline is usually 30 April for mandatory grants, but it may vary from year to year.
Always confirm the reporting date with Services SETA, rather than assuming that the submission date will be the same for consecutive reporting periods.
Step 5: Monitoring of the Application
After your application has been submitted, employers should monitor the application to ensure that it is progressing satisfactorily.
Applications should be tracked through the appropriate portal and amended if requested.
Employers must understand that there are no guarantees that the grant application will be approved.
2. Discretionary Grants for Employers
Employers can also apply for a discretionary grant from Services SETA to fund skills development training.
The discretionary grant differs from the mandatory grant, as the Skills Development Levies Act requires that mandatory grants be paid to qualifying employers, while discretionary grants are considered at the sole discretion of Services SETA.
Discretionary grants have limited funding, and employers should ensure that their requests comply with the provisions and guidelines of the Skills Development Levies Act.
The employer should apply for discretionary funding in accordance with the current requirements of an open funding window.
Services SETA publishes requirements and application procedures on its website.
Employers should be aware of the relevant deadlines and apply before the closing date.
What Training Can Eligible Employers Apply For?
The specific training that businesses can apply for will depend on the particular funding window. Possible interventions include:
Learnerships
Learnerships are structured learning programmes that combine workplace experience with assessed learning to develop technical skills.
Skills programmes
These are learning programmes designed to develop particular occupational competencies. The specific learning outcomes and assessment criteria of the programme determine what qualification can be obtained by the successful completion of the programme.
Apprenticeship and candidacy programmes
Candidates who successfully complete these programmes can obtain a higher or further education and training certificate.
Recognition of Prior Learning
Employers can apply for recognition of prior learning to achieve outcomes that would otherwise be obtained through learning and training.
The above are just a few examples. Employers should consult the current services SETA requirements to ensure that the proposed training programmes fall within the scope of approved programmes.
How Can Employers Apply for Discretionary Grants?
The application procedure will vary depending on the grant, but in general the following steps are involved:
- Identify an Open Funding Window
- Determine eligibility
- Determine the training need
- Identify an appropriate provider
- Prepare a proposal
- Submit the application
- Monitor the application
The above steps illustrate the major aspects of the application process, but individual funding windows may require additional or different documents.
Employers should always use the most recent application instructions from Services SETA.
Differentiating Mandatory and Discretionary Grants
The following table summarises some of the differences between discretionary and mandatory grants:
Mandatory grant Discretionary grant
Main purposeSupport skills planning and reportingFund approved skills development
FundingNeed to be eligible and submit appropriate reportsWill depend on the requirements of the specific application and approval
Main documentsWill usually include a Workplace Skills Plan and An Annual Training ReportDepends on funding window and proposal
ApprovalMust apply to mandatory grant criteriaCompetitive, based on approval of the particular window
Payment Will depend on compliance with mandatory grant rulesWill depend on particular project and approval of the window
Time Will depend on the reporting periodApplicable to the specific window
Employers should be aware that each grant has specific rules and regulations, and that approval under one grant does not necessarily entitle the employer to apply for another grant.
What Paperwork Do Employers Need to Prepare?
The documents to be submitted will vary depending on the type of grant an employer wants to claim.
In most cases, the following documents will be required:
- Workplace Skills Plan
- Annual Training Report
- Employer information
- Relevant levy or compliance information
- Training Needs Analysis / programme outlines
- Details of the proposed learning group
- Information regarding the training provider
- Budget
- Other required declarations
- Additional information
This is only a guideline and does not constitute a complete list of documents to be submitted by the employer.
Employers should consult the most recent Services SETA requirements before preparing and submitting a proposal for a discretionary grant.
How Can Services SETA Grants Benefit Employers?
Depending on their eligibility and compliance with conditions, Services SETA grants can benefit an array of employers.
Some of the ways in which a discretionary or mandatory grant can benefit an employer
are
Reducing eligible training costs
By claiming a discretionary grant, the employer can reduce some or all of the costs of an approved training programme, depending on the scope of the approved funding.
However, the approval of a discretionary grant is by no means guaranteed, and employers should not make financial commitments based solely on the expectation of discretionary funding.
Addressing skills shortages
An appropriate learning programme, such as a learnership or a skills programme, can help to address specific skills shortages within the employing business.
Develop employee skills
Appropriate training can help employees develop the skills they need to perform their jobs more effectively.
Planning workforce skills needs
A suitable skills development programme can help the employer identify skills needs so that the workforce planning function can be fulfilled more effectively.
Contributing towards B-BBEE skills development
Training costs incurred in approved skills development training programmes may qualify towards the skills development elements in the Broad-Based Black Economic Empowerment ratings.
Employers should consult the B-BBEE guidelines to ensure that the relevant training costs have been accounted for and that the necessary supporting documents have been retained to substantiate a claim.
Improving staff retention
Training can help retain staff by allowing employees to develop new skills, which can lead to a new career path within the business.
The application for a discretionary grant from Services SETA can make a positive contribution towards meeting the employer’s skills development needs
, but it should always be supplemented by its own skills needs analysis and appropriate budget planning.
Eligibility for a particular program should always be confirmed by a Skills Development Facilitator authorised by Services SETA before the expenses are incurred.
Common Errors to Avoid
Employers should be aware of some of the most common mistakes that can occur when applying for Services SETA grants:
- Missing submission and reporting deadlines
- Submitting incomplete documentation
- Assumed that levy payment entitles the business to discretionary funding
- Failing to conduct appropriate due diligence on training providers
- Submitting proposals not covered by the funding window
By keeping a compliance diary an employer can help to ensure that the Skills Development Facilitator keeps track of the relevant dates, documents and other requirements.
Where Can an Employer Find the Official Services SETA Grant Information
The following links will take the user to the official Services SETA website, which can be used to find out more about mandatory and discretionary grants:
- Services SETA official site https://www.servicesseta.org.za
- Services SETA employers https://servicesseta.org.za/employers/
- Services SETA Skills Development Providers https://www.servicesseta.org.za/skills-development-providers/
- SARS https://www.sars.gov.za/
From these websites, the user can obtain the most recent information regarding mandatory and discretionary grants, including the required documentation.
In addition, the SARS provides information on Skills Development Levy.
Frequently Asked Questions
1. Can every employer claim a Services SETA mandatory grant?
Employers must be eligible for a mandatory grant and should understand the requirements to prepare the correct documents before making any submission.
2. Is the discretionary grant guaranteed to employers who pay Skills Development Levy?
Discretionary grants are approved at the sole discretion of Services SETA to fund qualifying training interventions. Employers should consult Services SETA to view the most recent application requirements and deadlines.
3. What is a Workplace Skills Plan?
A Workplace Skills Plan sets out the training needs of an organisation and its skills development intervention strategies.
4. What is an Annual Training Report?
An Annual Training Report specifies the training interventions conducted during the financial year, according to the requirements of Services SETA.
5. When do employers need to submit their Workplace Skills Plan and Annual Training Report?
The report submission date for both of the above-mentioned documents usually falls on or around 30 April.
6. Can training grants be used for learnerships with existing employees?
Where a particular funding window provides for it, and the organisation, employees, and training provider meet the qualifying conditions for the learnership, employers can apply for a grant to fund it.
7. Must a training provider be accredited for the provision of training in approved skills development programme?
A training provider must be approved in relation to the particular training program for which a grant is sought. Employers should confirm that their selected training provider has the necessary qualifications and credentials to provide the approved training.
8. Can a Skills Development Grant improve a B-BBEE score?
Skills development training grants may contribute to a company’s B-BBEE score, subject to the skills development components of the B-BBEE rating instrument, but skills development grants do not guarantee a specific score.
Final Word of Advice for Employers Considering Staff Training in 2027
Businesses can use Services SETA grants to fund some of the approved training interventions and address specific skills needs within the business. However, employers should understand the differences between the mandatory and discretionary grants.
Employers that are considering conducting a learnership in 2027 should start preparing their application by reviewing their training needs, completing the required documents, and appointing an authorised Skills Development Facilitator to assist with the application.
When it comes to discretionary training grants, the employer should keep up to date with the latest funding announcements and make sure that its training proposal fits within the proposed funding window.
Finally, although a Skills Development Grant can help to fund skills development training, employers should always confirm with Services SETA that they are eligible for a discrete grant before making any financial commitments.
This is intended as a general overview of the discretionary and mandatory grants from Services SETA. Employers are encouraged to contact an independent advisor to receive more detailed information regarding their skills development needs, as well as the application and documentation requirements.
This article is not an official grant announcement and the details contained herein may be subject to change from time to time. Please refer always to the most recent information and consult Services SETA for specific grant requirements.
Sources and References
- Services SETA https://www.servicesseta.org.za/
- Services SETA Employers https://servicesseta.org.za/employers/
- Services SETA Skills Development Providers https://www.servicesseta.org.za/skills-development-providers/
- South African Revenue Service https://www.sars.gov.za/
Editorial note: It should always be verified that any percentage figure, deadline, and eligibility requirements are in accordance with the most recent documents published by Services SETA. This article does not confirm that any particular funding window is currently open and any such assumptions should be verified independently by the employer.
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