Of the money that leaves your payroll as a skills development levy every month, a fifth is waiting to come back to you. Not competitively. Not on the strength of a persuasive application. It is allocated to your company by name, held by your SETA, and paid out on conditions that are published in advance.
Employers still lose it. Not usually by ignoring the deadline, which most of them know about, but by missing one of the other conditions that sits quietly alongside it. And because the grant is calculated off your own payroll, the amount at stake scales with the size of the company that overlooked it. A business paying R40 000 a month in levy is leaving roughly R96 000 a year on the table.
What is a mandatory grant, exactly?
It is 20% of the skills development levy your company paid in a given financial year, paid directly back to your company by the SETA your levy was routed to.
The word employers reach for is refund, and that is worth correcting early, because it sends people to the wrong place. SARS collects the levy and does not give any of it back. SARS forwards 80% of it to your SETA, and the mandatory grant is a claim you make against your SETA out of that money. If you go looking for it on eFiling you will not find it.
The second thing to understand is that it is not discretionary in any sense. Your SETA is not deciding whether your training plans deserve support, weighing your application against other employers, or allocating from a pool that might run out. The regulations designate the money as mandatory precisely because it is not a judgement call. Meet the criteria and it is paid. Miss one and it is withheld, regardless of how good the plan was.
Which makes the failure mode very specific. Nobody loses a mandatory grant on quality. They lose it on conditions.
Not sure what your own SETA has actually paid you? Send us a payroll summary and your SETA registration and we will tell you what you were entitled to and what was claimed.
Request a call backWhere the 20% sits inside the levy
HWSETA sets out the split of the 80% that reaches a SETA. Of the total levy paid, 49.5% goes to discretionary grant funding, 20% to mandatory grant funding, 10% to administration and 0.5% to the Quality Council for Trades and Occupations. The remaining 20% of the levy never reaches your SETA at all, because SARS pays it to the National Skills Fund.
Where one year of your skills development levy goes
SARS collects 1% of your payroll every month. This is what happens to it, as a share of the total levy paid.
- 20%Mandatory grant. Yours by name. Released on a compliant WSP and ATR lodged by 30 April.
- 49.5%Discretionary pool. Applied for competitively, in windows the SETA sets. Not proportional to what you paid.
- 10.5%SETA administration and the QCTO. Ten percent and a half percent respectively. Does not come back.
- 20%National Skills Fund. Funds national priorities. Does not come back.
That is the shape of the thing. One slice is yours already. One slice you have to win. The rest is gone.
What are the conditions your SETA actually checks?
Grant criteria are published per SETA and they are not identical, but the core set repeats. Reading merSETA's mandatory grants criteria and guideline for 2026/27 alongside Fasset's published criteria, five conditions do the work.
The submission has to be in by 30 April. Both documents, in the format that SETA requires, on that SETA's platform. merSETA takes electronic submissions on the National Skills Development Management System, and its window opens on 1 February.
Levy payments have to be up to date. An employer in arrears with SARS on the levy is not paid a grant out of it. This is the condition that catches companies who submitted a flawless plan while the payroll account was behind.
The consultation has to be evidenced. Where a recognition agreement exists with a trade union, the plan and report must be signed off by the labour Skills Development Facilitator appointed by that union, and training committee minutes must show the documents were actually put in front of them. Where there is no recognition agreement but the company employs 50 or more people, the same applies with an employee Skills Development Facilitator nominated by the workforce. A signature with no minutes behind it is an incomplete submission.
Banking details have to be current and verified. merSETA puts the responsibility on the employer to supply banking information online and reserves the right to validate any change. Fasset requires documentary proof, an original stamped bank letter or a cancelled cheque, before it will process a change. A grant approved into a closed account is a grant you chase for months.
New registrants have their own clock. An employer registering for the levy for the first time has to apply for the mandatory grant within six months of that registration, rather than waiting for the next 30 April. Fasset treats an employer operating for under six months as new and asks for the SARS EMP103 notice of registration as proof.
Which deadlines after 30 April still matter?
This is the part most employers do not know, and it is where a submission that looked lost can still be saved.
merSETA allows companies that submitted inside the window but fell short on the minimum criteria to supply the outstanding items by 15 July. Crucially, only a defined list is considered after 30 April. Clarification of sign-off by the labour or employee facilitator. Outstanding facilitator signatories. Proof that an inter-SETA transfer was approved and occurred before the submission deadline. Training committee minutes.
Read that list closely, because of what is not on it. You cannot add training you forgot to report. You cannot fix a payroll figure. You cannot submit the plan itself late. The only things curable after the deadline are the sign-off and the paperwork proving consultation happened.
Then the hard stop. Mandatory grants not claimed within the stipulated timeframe are transferred to the discretionary grant pool by 15 August of the financial year. At that point the money is not late, it is gone, and it has joined the pool you now have to compete with other employers to access.
Does your SETA allow an extension?
Here the SETAs genuinely disagree, and an employer relying on general advice will get this wrong.
Fasset states that no extensions can be granted for submission and urges employers to collate data early on that basis. merSETA takes a different line: its CEO, acting as the delegated representative of the accounting authority, may grant an extension of up to one month from the submission date. But the request for that extension must itself be lodged electronically on or before 30 April.
Which means even the SETA that permits an extension requires you to act before the deadline you were hoping to extend. There is no version of this where 1 May is a useful day to start.
When does the money actually arrive?
Later than employers expect, and not in one payment.
Fasset schedules mandatory grant payments in February, May, August and November, and notes that it receives levy information from SARS three to four months in arrears and can only pay once accurate information has come through. HWSETA describes payment of the quarterly mandatory grant following approval of the plan.
So the practical sequence is a submission in April, an approval some weeks later, and a first payment in a quarterly cycle after that. Treating the grant as this year's training budget is a cash-flow error. It funds next year.
What gets verified after you are paid?
Being paid is not the end of the process, which surprises people.
merSETA monitors the implementation of at least 20% of all mandatory grant submissions and reserves the right to verify any report submitted, with client liaison officers conducting verifications at regional offices. One submission in five is looked at properly. If the training reported in your Annual Training Report did not happen, or happened but left no records, that is discovered at a point when the grant has already been banked.
There is also a deviation rule worth knowing. Where a company has moved more than 40% away from the previous year's Workplace Skills Plan, merSETA requires a written motivation explaining why. The stated purpose is to understand trends and circumstances rather than to punish, but it is still a document you have to produce, and producing it a year later from memory is unpleasant.
What will your SETA not pay for?
Two limits are worth planning around.
merSETA will not fund training undertaken for re-licensing purposes as part of a legislative requirement, on the basis that re-licensing is an employer's legal obligation rather than skills development. For employers in construction and manufacturing, where statutory tickets have to be renewed on a cycle, that removes a meaningful slice of what gets spent on training each year from the claim.
And the grant is not a reimbursement of what you spent. merSETA states that amounts paid for planned learning interventions may not equal the amount requested, because the value of the mandatory grant can be less than the training costs the employer projected. The grant is a fixed proportion of your levy. It is not a rebate on your training invoices, and a plan built on the assumption that spending more brings back more is built wrong.
One useful concession runs the other way. merSETA will give consideration to training that was implemented and reported in the Annual Training Report even though it was not specified in the Workplace Skills Plan. Real training years do not follow the plan exactly, and that is allowed for.
A sequence that works
If you are starting from a standing position, the order matters more than the effort.
Confirm your levy payments to SARS are current, because nothing downstream is worth doing until they are. Confirm which SETA your levy is actually routed to, and that your registered Skills Development Facilitator details are correct on that SETA's system. Establish the training committee if your headcount or your union agreement requires one, and minute its meetings as you go rather than reconstructing them in April. Verify your banking details on the SETA portal. Then build the plan and the report, get them signed by the right facilitator, and submit well inside the window.
None of that is difficult. All of it is sequential, and the one part that cannot be done retrospectively is the consultation you were supposed to have held during the year.