Upskilling for a career change or promotion in South Africa is often the smartest investment you can make — but funding it can be confusing. This practical guide explains the main funding routes available to South African learners and working professionals: bursaries and scholarships, SETA grants (how they work and who benefits), and the tax rules you need to know so you don’t lose money or miss an employer incentive.
Contents
- Understanding the funding ecosystem
- Bursaries & scholarships: where to look and who qualifies
- SETA grants: mandatory vs discretionary — what learners and employers should know
- Tax treatment, employer support and learnership incentives
- Quick comparison table (Bursary vs SETA grant vs Tax incentives)
- Practical checklist: how to fund your upskill
- Useful internal resources and next steps
Understanding the funding ecosystem (quick overview)
- National (student) funding — NSFAS funds eligible university and TVET students and the government has introduced a loan scheme for the “missing middle”. Check NSFAS for application windows and eligibility. (gov.za)
- Sector-level funding — SETAs distribute Skills Development Levy money as mandatory grants (returned to compliant levy-paying employers) and discretionary grants (allocated to sector priorities such as learnerships, internships, PIVOTAL programmes and bursaries). Employers (and sometimes training providers) apply via their sector SETA. (merseta.org.za)
- Employer & private bursaries — companies, professional bodies and foundations offer route-specific bursaries and sponsored training; amounts, conditions and tax consequences differ widely. (sars.gov.za)
Bursaries & scholarships — who to target
Common bursary sources for upskilling or micro-credentials:
- NSFAS — for public universities and TVET college students who meet the income and academic criteria (household-income thresholds commonly used: up to ~R350,000 for full bursary; SASSA recipients automatically qualify; “missing middle” loan schemes cover higher brackets). Always confirm current thresholds and application dates on NSFAS. (gov.za)
- SETA-administered bursaries — many SETAs open bursary windows for scarce skills and PIVOTAL programmes (apply during advertised windows; employer sponsorship often required). (mict.org.za)
- Employer-sponsored bursaries / HR-funded training — ask HR about existing bursary schemes, study loans or reimbursement policies (see tax section below for fringe-benefit rules). (sars.gov.za)
- Private foundations, industry associations and universities — ideal for niche short courses and micro‑credentials.
Practical tip: build a target list (NSFAS, your SETA, employer HR, relevant foundations) and calendar the application windows — many SETA and bursary windows are strictly time-bound. (merseta.org.za)
SETA grants explained: mandatory vs discretionary
How SETA funding broadly works:
- Employers pay 1% Skills Development Levy (SDL) on payroll; SETAs manage and redistribute funds to support workplace learning. A portion is returned as mandatory grants if the employer submits a compliant Workplace Skills Plan (WSP) and Annual Training Report (ATR). (merseta.org.za)
- Discretionary grants are awarded by SETAs according to sector priorities (PIVOTAL programmes, scarce skills, learnerships, internships, bursaries). These windows are advertised by each SETA and often require accredited providers and clear links to the SETA Sector Skills Plan. (mict.org.za)
What learners should do:
- If employed: ask your SDF/HR whether the company is levy‑paying and whether training for your course can be funded through mandatory/discretionary grants (employers can claim funds only after submitting WSP/ATR). (merseta.org.za)
- If unemployed/independent: look for SETA bursary adverts (SETA websites publish discretionary grant windows and eligibility). Accredited training providers sometimes apply on your behalf. (mict.org.za)
Tax treatment & incentives — what matters to learners and employers
Key points every learner (and HR partner) must know:
-
Employer-funded bursaries and training can be exempt from tax where they qualify as a bona fide bursary or if the training is job-related and for the employer’s benefit. SARS guidance sets out exemption rules and reporting codes; exemptions have limits for relatives and specific thresholds. Keep documentation. (sars.gov.za)
-
Employers who register learners on registered learnership agreements (SETA‑registered) can access the learnership allowances under Section 12H of the Income Tax Act — an annual allowance and a completion allowance per qualifying learner (values differ by NQF level and disability status). This is a meaningful incentive for employers to take on learners. Employers should confirm current rules and the claiming process with their tax advisor and SETA. (prnc.co.za)
-
For individuals (employees or self-employed) private study costs are not automatically tax-deductible. General tax principle: a deduction must be an expense “in the production of income” — if the course is demonstrably necessary for, and directly connected to, your trade or the generation of taxable income, some or all costs may be deductible. SARS/Tax texts require evidence and a factual link to income production — check with a tax practitioner and retain receipts. (studylib.net)
Practical tax tips:
- If your employer pays, make sure the payment is correctly classified on your IRP5 (SARS pays close attention to bursary/tax codes). (sars.gov.za)
- If you pay, save invoices, course outlines and emails proving the course supports your income-generating activities — these help a tax consultant argue deductibility. (studylib.net)
Quick comparison: Bursary vs SETA Grant vs Tax/Employer Incentive
| Feature | Bursary / Scholarship | SETA Grant (for employers / learners) | Tax & Learnership Incentives |
|---|---|---|---|
| Who applies | Student/learner or employer on behalf | Employer (mandatory) / employer or provider (discretionary) | Employer (learnership) or individual (tax returns) |
| What it covers | Tuition, books, sometimes accommodation/stipend | Learnerships, internships, skills programmes, bursaries — depends on SETA window | Deductions/allowances for employers (Section 12H); limited individual deductions if course directly produces income |
| Timing | Fixed application windows; varies by sponsor | SETAs publish windows; WSP/ATR deadlines for mandatory grants | Tax year rules; learnerships must be registered with SETA and comply with SARS rules |
| Typical value | Varies widely (partial to full) | Employers reclaim levy % (mandatory) or apply for discretionary funds | Annual/completion allowances for employers; not cash for individuals unless deductible |
| Where to check | NSFAS, university, private foundations | Your sector SETA site and employer HR (WSP/ATR) | SARS guides; professional tax advice |
(See MERSETA and MICT SETA pages for practical grant windows and submission guidance). (merseta.org.za)
Practical checklist — how to fund your upskill (step-by-step)
- Map your goal: select a qualification/micro‑credential and confirm whether it’s NQF‑registered or PIVOTAL.
- Check NSFAS eligibility (if you plan to study at a public university or TVET college). Apply within the NSFAS window. (gov.za)
- If employed, speak to HR/SDF about: WSP/ATR compliance, discretionary grant opportunities, employer bursary or study‑leave policy. (merseta.org.za)
- Search your SETA’s stakeholder page for discretionary grant adverts and application guidance; contact the SETA if unsure. (mict.org.za)
- If you’re a freelancer/entrepreneur, gather evidence that the course is used to produce income — consult a tax professional about possible deductions. (studylib.net)
- Keep everything: invoices, proof of payment, acceptance letters, course outlines, attendance registers — essential for SETA claims and tax audits. (mict.org.za)
Related resources (internal links for Career Guidance South Africa)
- Career Guidance South Africa: How to Plan a Mid-Career Pivot Without Losing Income
- Top Micro-credentials Trusted by South African Employers — SETA-Recognised Short Courses
- Upskilling Roadmap: From Junior Role to Specialist in South Africa's Tech and Finance Sectors
- Employer-Sponsored Training and ROI: How to Negotiate Upskilling Support in South Africa
- Comparing Micro-credentials, Diplomas and Degrees: What South African Employers Value Most
Final takeaways (quick)
- Start with the employer/SETA route if you’re employed — many employers can access mandatory/discretionary SETA funds and Section 12H offers real tax incentives for learnerships. (merseta.org.za)
- If you’re eligible for NSFAS, apply early — public-sector funding and the “missing middle” loan windows change year to year. (gov.za)
- Keep records, ask HR for SDF contacts, and get professional tax advice before claiming study-related deductions or interpreting SARS rules for bursaries. (sars.gov.za)
If you’d like, I can:
- Draft an email template to send to your HR/SDF to request SETA funding for a specific course.
- Search your sector SETA for current discretionary grant windows and relevant bursaries (tell me your sector).