Section 12H Learnership Allowances: What Employers Need to Know

In April 2025, SARS released Interpretation Note 20 (Issue 9), which offers authoritative guidance on Section 12H—covering additional deductions available to employers for qualifying learnership agreements.

What Is Section 12H All About?

Section 12H allows employers who enter into learnership agreements—registered with a SETA—to claim two types of tax deductions:

  1. Annual Allowance: A deduction per year of the learnership.
  2. Completion Allowance: A one-time deduction in the year the learner completes the program. These deductions apply to agreements entered into before 1 April 2027, following extensions beyond the original sunset date

South African employers can benefit from valuable tax deductions through Section 12H for registered learnership agreements. SARS’s Interpretation Note 20 (Issue 9)—effective as of April 10, 2025—clarifies how these annual and completion allowances work for agreements entered before 1 April 2027.

Allowances by NQF Level:

  • NQF 1–6: Annual = R40,000 | Completion = R40,000
  • NQF 7–10: Annual = R20,000 | Completion = R20,000
  • Enhanced amounts are available for learners with disabilities—often an extra R20 000 if NQF level 1-6, and R30 000 extra if NQF level 7-10 for disabilities

When You Can Claim:

  • Both allowances apply in the completion year.
  • Pro-rated values apply for learnerships shorter than 12 months.
  • Only the final employer may claim completion allowances.
  • If the agreement is terminated prematurely, you must include prior claims in your taxable income (except in cases of learner death or incapacity).
  • Claiming requires SETA documentation and IT 180 reporting.

Section 12H is an excellent incentive to develop skills and support employment—while benefiting from tax relief.

Contact PRNC to find out how your business can maximise Section 12H incentives.

Back To Top