In South Africa, the 12H tax incentive serves as a crucial mechanism to encourage companies to invest in the development of skills and expertise among the youth through learnership programs. These programs, known as learnerships, offer a blend of theoretical knowledge and practical workplace experience, preparing young individuals for the demands of the job market.

The incentive operates by providing tax benefits to companies that actively participate in learnership initiatives. When a company implements a learnership program, it becomes eligible to claim tax deductions on qualifying expenses associated with the program. This includes costs such as stipends for learners, tuition fees, training materials, and other related expenditures.

Under the 12H tax incentive, companies can claim a percentage deduction of up to R80,000 per qualifying learner per year, and R120,000 per learner living with Disabilities per year. This deduction significantly reduces the taxable income of the company, resulting in lower tax liabilities.

By leveraging the 12H tax incentive, companies not only contribute to addressing the skills gap in the workforce but also benefit financially. The incentive incentivises businesses to invest in the development of young talent, fostering a skilled and competent workforce that can drive innovation and economic growth.

Moreover, learnerships provide an invaluable opportunity for young individuals to gain hands-on experience, acquire industry-specific skills, and enhance their employability. Through these programs, companies play a pivotal role in shaping the future workforce while simultaneously reaping the rewards of tax incentives. It’s a strategic investment in both human capital and fiscal responsibility, with long-term benefits for the economy and society as a whole.

The good news is that the Minister of Finance has extended the deadline of this tax incentive to 2027, due to the positive effect it is having.

This photo depicts some of our learners busy with their NQF Level Hygiene and Cleaning qualification, who gain practical experience through our pet project Ubusha. We are excited to link up with you to explore who we can make learnerships part of your B-BBEE journey and gain maximum benefits!