Free Training & Career Tips... Subscribe to Get Weekly Career Tips
By Subscribing You are Agreeing to Terms and Conditions
The Skills Development Act 97 of 1998 is South Africa’s main law for workplace training. It sets up the bodies that plan and fund skills: the National Skills Authority, the National Skills Fund and the Sector Education and Training Authorities (SETAs). Together with the Skills Development Levies Act, it also creates the levy-grant system that employers pay into. If you are responsible for planning or running training under the Act, BOTI’s skills development, facilitator and ETDP training courses cover the practical side.
Building your career?
Add a certificate to your CV with BOTI e-learning: 142 self-paced online courses – Excel, Word, project management, customer service and more – from R595 (excl. VAT) with 6 months’ access.
See the e-learning courses
Rather have your employer pay? Here’s how to ask
Add a certificate to your CV with BOTI e-learning: 142 self-paced online courses – Excel, Word, project management, customer service and more – from R595 (excl. VAT) with 6 months’ access.
See the e-learning courses
Rather have your employer pay? Here’s how to ask
Training your staff?
BOTI is accredited by the QCTO (Quality Council for Trades and Occupations) as a skills development provider, and is a Level 1 B-BBEE (Broad-Based Black Economic Empowerment) contributor. Plan the training in your Workplace Skills Plan and count it towards your B-BBEE skills development score.
Get a quote for your team
BOTI is accredited by the QCTO (Quality Council for Trades and Occupations) as a skills development provider, and is a Level 1 B-BBEE (Broad-Based Black Economic Empowerment) contributor. Plan the training in your Workplace Skills Plan and count it towards your B-BBEE skills development score.
Get a quote for your team
See all BOTI accredited courses and qualifications.
Skills Development Act summary: why the Act exists
A shortage of skilled, experienced employees holds back South African businesses and the wider economy. The Skills Development Act aims to broaden the knowledge and competencies of the workforce, so that productivity and employment both improve.
Purpose of the Skills Development Act
The Act sets out the following purposes:
- To improve employees’ quality of life, their prospects of work and their labour mobility
- To improve productivity in the workplace and the competitiveness of employers
- To increase investment in education and training in the labour market, and to improve the return on that investment
- To encourage employers to use the workplace as an active learning environment
- To improve the employment prospects of people previously disadvantaged by unfair discrimination
- To promote self-employment
- To improve the delivery of services
The institutions created by the Act
The Act meets these purposes through an institutional and financial framework. It includes the National Skills Authority (NSA), the National Skills Fund (NSF), the SETAs, and planning and employment-services structures within government. The Act also provides for financing skills development through a levy-grant scheme and the National Skills Fund.
The National Skills Authority
The NSA advises the Minister on skills development policy and strategy. Under the Act, its membership is made up of the following groups:
- A chairperson and an executive officer
- Organised business
- Organised labour
- Relevant national government departments
- Community constituencies, such as youth, women, people with disabilities, and rural and civic organisations
- Education and training providers, from higher and further education, adult education and the private sector
SETAs under the Skills Development Act
The Act allows the Minister to establish a SETA for any national economic sector and, where needed, to help it. The Act originally gave this power to the Minister of Labour. SETAs now fall under the Department of Higher Education and Training. There are currently 21 SETAs, and their licence period runs from 1 April 2020 to 31 March 2030.
Under the Act, a SETA must:
- Develop and implement a sector skills plan within the national skills development strategy
- Promote learnerships, including by identifying workplaces that can give learners suitable work experience
- Support the quality of education and training in its sector. Today the QCTO quality-assures occupational qualifications, and SETAs act as its Quality Partners
- Liaise with employment services, the NSA and other stakeholders
- Report on how it is implementing its sector skills plan, and on its income and expenditure
SETAs are funded from the levies collected from their sector and from money paid to them by the National Skills Fund. For a fuller explanation, read our guides on what a SETA is and how SETAs and the QCTO differ.
Section 11 of the Act says a SETA’s membership must include:
- Organised employers, including small businesses
- Organised labour
- Relevant government departments
- Relevant professional bodies (optional)
- Representatives from the relevant bargaining council (optional)
Learnerships
One of a SETA’s functions is to establish learnerships. A learnership combines a structured learning programme with practical work experience of a defined nature and length. It must lead to a qualification registered on the National Qualifications Framework by SAQA. Our guide on what a learnership is and why it matters explains how employers host them.
Skills planning and labour centres
Section 22 of the Act requires the Director-General to set up a skills development planning unit and to give it the staff and money it needs. The unit’s functions are:
- To research and analyse the labour market, so that it can identify skills development needs for South Africa as a whole, for each economic sector and for organs of state
- To help draw up the national skills development strategy and sector skills plans
- To provide information on skills to the Minister, the NSA, SETAs, education and training providers and organs of state
The Act also provided for labour centres. These give employment services to workers, employers, training providers and communities. Public employment services are now run by the Department of Employment and Labour. Labour centres were set up to:
- Register work-seekers
- Register vacancies and work opportunities
- Help prescribed categories of people
- Place people in special education and training programmes
- Help people find work
- Help people start income-generating projects
- Place people in special employment programmes
The skills development levy and SETA grants
The Skills Development Levies Act works alongside the Skills Development Act. Employers above the exemption threshold pay a skills development levy of 1% of payroll[1] every month through SARS. The money is split as follows[2]:
- SETA discretionary grants: 49.5%
- SETA mandatory grants: 20%
- SETA administration: 10%
- QCTO: 0.5%
- National Skills Fund: 20%
An employer can claim back the mandatory grant (20% of levies paid)[2]. To do so, it must submit its Workplace Skills Plan and Annual Training Report to its SETA by 30 April[2] and be up to date with its levy payments. Unclaimed mandatory grant money moves to discretionary funding by 15 August[2]. See our guides on the skills development levy, the Workplace Skills Plan and the WSP submission deadline.
Examples of the Skills Development Act in practice
For most businesses, the Act shows up in everyday HR and training work, such as:
- Paying the monthly skills levy and registering with the correct SETA
- Appointing a Skills Development Facilitator to prepare and submit the WSP and ATR
- Running a training needs analysis and building training into the annual plan
- Hosting learnerships, or work experience for learners on occupational qualifications
- Enrolling staff on QCTO occupational qualifications or skills programmes, which end in an EISA or a FISA respectively
- Keeping attendance and assessment records so that training can be reported accurately
The QCTO, which oversees occupational qualifications, was itself established in 2010 under the Skills Development Act. For the current position on legacy qualifications and the move to the QCTO, read our guide to the QCTO transition.
Frequently asked questions
What is the purpose of the Skills Development Act?
The purpose of the Skills Development Act 97 of 1998 is to develop the skills of the South African workforce, improve productivity and employment prospects, increase investment in education and training, encourage employers to use the workplace as an active learning environment and improve the employment prospects of people previously disadvantaged by unfair discrimination.
What are examples of the Skills Development Act in practice?
Common examples are an employer paying the 1% skills development levy through SARS, submitting a Workplace Skills Plan and Annual Training Report to its SETA by 30 April to claim the mandatory grant, hosting learnerships, and enrolling staff on QCTO occupational qualifications or skills programmes.
Who administers the Skills Development Act today?
The Department of Higher Education and Training oversees the SETAs, the National Skills Authority and the National Skills Fund. Public employment services are run by the Department of Employment and Labour. The QCTO, established under the Act in 2010, quality-assures occupational qualifications and skills programmes.
Do employers have to pay the skills development levy?
Employers above the exemption threshold set in the Skills Development Levies Act pay a levy of 1% of payroll every month through SARS. Check with SARS whether the exemption applies to your business.
Put the Skills Development Act to work in your organisation
In most companies, the Skills Development Facilitator is the person who turns the Act into action. BOTI’s Skills Development Facilitator (SDF) Training Course shows delegates how to plan training, prepare the Workplace Skills Plan and Annual Training Report, and work with their SETA. Training runs in-house at your premises, at BOTI’s venue in Sunningdale, Johannesburg, or live online. Call BOTI on 011 882 8853 or email [email protected], or request a quote for your team.
This course is not accredited. It is delivered as a professional skills programme, and delegates receive a BOTI certificate of attendance.
Sources
- Skills Development Levy – South African Revenue Service (SARS), 2026.
- Mandatory Grants – Health and Welfare SETA (HWSETA), 2026.
For employers: put your skills levy to work
We train your staff at your offices, online or at a BOTI venue. Training can be planned in your Workplace Skills Plan, and spend on training black employees counts towards the skills development element of your B-BBEE scorecard.
Accredited programmes · All courses · SDF service for your Workplace Skills Plan
Building your own skills? Start an online course with a certificate today, or ask your employer to pay.