Multi-year learnerships:
We confirm that the allowance operates as follows for multi-year learnerships (SAICA training contracts):
For multi-year learnerships (i.e. contacts that equal or more than 24 full months), the commencement allowance is now allowed in each successive year (as oppose to being allowed in the first year with all subsequent commencement allowances deferred to the completion of the contact). The completion allowance is the number of years duration of apprenticeship multiplied by R30 000, in the year of successful completion of the learnership. The wider wording of the Act will now ensure that the SAICA training contracts will qualify for the multi-year learnership allowances.
Example:
Assuming a three year completed SAICA training contract (enabled learner) the employer will now be entitled to a deduction of R180 000 (previously R60 000).
Calculated as follows:
Year 1: R30 000 commencement allowance
Year 2: R30 000 commencement allowance
Year 3: R30 000 commencement allowance
Year 3: R90 000 completion allowance i.e. R30 000 x 3 completed years
Total = R180 000
On a five year completed SAICA training contract the deduction amounts to R300 000 (previously R60 000).
Effective date:
The new legislation is only effective as from the commencement of years of assessments ending on or after 1 January 2010.
Our interpretation is as follows: If we are assuming a February 2010 year end, then the new legislation will apply to all new contracts signed on or after 1 March 2009. Contracts signed before that will fall under the old legislation.
