Do Learnerships Really Pay ? Learnerships in South Africa
So what amount will be allowed as a learnership allowance?
In cases where the learner was employed by the employer at the time of entering into the learnership agreement, the deduction will be limited to the lower of 70% of the employee’s remuneration for the duration of the learnership period (limited to 12 months) or R20 000.
Where the learner, prior to entering into a learnership agreement was unemployed, the deduction will be limited to the lower of the employee’s remuneration for the duration of the learnership period (limited to 12 months), or R30 000.
On completion of the learnership by the employee, the deduction will be the lower of the employee’s remuneration for the duration of the learnership period (limited to 12 months) or R30 000.
Where the learner is a disabled person as defined in the Employment Equity Act, the amount of the allowance is as follows:
Where the learner was employed by the employer at the time of entering into the learnership agreement, the deduction will be limited to the lower of 150% of the employee’s remuneration for the duration of the learnership period (limited to 12 months) or R40 000.
Where the learner, prior to entering into a learnership agreement was unemployed, the deduction will be limited to the lower of 175% of the employee’s remuneration for the duration of the learnership period (limited to 12 months), or R50 000.
On completion of the learnership by the employee, the deduction will be the lower of the employee’s remuneration for the duration of the learnership (limited to 12 months), or R50 000.
However, a problem arises with certain apprenticeships — those which extend over a number of years and no new contract is entered into each year. In these cases the benefit for the employer is much lower than it would be if a new contract were entered into each year.
This has been addressed in the recent Revenue Laws Amendment Bill, 2008. For any contract of apprenticeship which extends over a number of years, the deduction to be allowed is the initial allowance on entering the learnership agreement and the completion deduction multiplied by minimum number of years of the apprenticeship.
The completion deduction will be allowed in the year the trade test is undertaken.