Skills Development Expenditure

Skills Development Expenditure measures the measured entity’s contribution towards providing skills development training and programs for black people as follows:

Training for non-employees

The Revised Codes allow external training expenditure on non-employees to count towards the Skills Development Target (for the 2% sub-element target). Previously only training for employees was counted under the Skills Development Element.

Where such training is provided to non-employees, this intervention cannot be double counted under both Skills Development and also either the Enterprise or Supplier Development or Socio Economic Development elements (beneficiary dependent).

Skills Development Expenditure in relation to black people, must be based on EAP for African people using the ARG in 2.1.2.1.

Demographic and Race Sub-groupings

For the Skills Development sub-indicator 2.1.2.1, the targets and points awarded is calculated based on skills development expenditure per the population demographic representation, as per the EAP (Economically Active Population) Statistics as published in the Commission on Employment Equity Report for African People.

Where an entity employs staff across more than one province, National Statistics are to be used.

The most recent National EAP (Economically Active Population) Statistics as published in the Commission on Employment Equity Report are as follows:

Profile of the National EAP by race and gender
Male			Female
AM	African Male	42.70%	AF	African Female	35.80%
CM	Coloured Male	5.20%	CF	Coloured Female	4.40%
IM	Indian Male	1.70%	IF	Indian Female	1.10%
WM	White Male	5.10%	WF	White Female	4.00%
FM	Foreign Male	0%	FF	Foreign Female	0%
Total		54.70%	Total		45.30%
Source: Commission for Employment Equity Annual Report 2017-2018

Where an entity employs staff in one province only, Provincial Statistics are to be used based on the geographic location of the business.

The most recent Provincial EAP (Economically Active Population) Statistics as published in the Commission on Employment Equity Report are as follows:

Profile of the National EAP by race and gender
Province	Male				Female				Total
Province	A	C	I	W	A	C	I	W	Total
Western Cape	20.90%	25.10%	0.60%	8.40%	16.80%	20.80%	0.30%	7.10%	100%
Eastern Cape	42.30%	4.80%	0.50%	3.70%	40.10%	4.70%	0.30%	3.60%	100%
Northern Cape	27.30%	22.90%	0.20%	4.40%	21.10%	20.80%	0.00%	3.20%	100%
Free State	49.20%	1.60%	0.70%	4.40%	40.30%	1.00%	0.10%	2.60%	100%
Kwazulu-Natal	43.70%	0.20%	5.30%	2.20%	42.90%	0.50%	3.50%	1.60%	100%
North West	54.80%	0.60%	0.40%	3.90%	36.20%	0.90%	0.10%	3.10%	100%
Gauteng	44.60%	2.00%	1.80%	7.10%	36.20%	1.50%	1.20%	5.60%	100%
Mpumalanga	52.00%	0.20%	0.60%	3.20%	41.70%	0.10%	0.30%	1.90%	100%
Limpopo	52.00%	0.20%	1.00%	2.10%	43.10%	0.40%	0.10%	1.00%	100%
Source: Commission for Employment Equity Annual Report 2017-2018

Interpretations may vary as to when an entity is to be assessed using the National or the Provincial EAP targets. Please consult your verification agency for their interpretation.

What is the Leviable Payroll Amount?

The Leviable Payroll Amount is essentially the entity’s total wages bill for the verification period. The Leviable Payroll Amount is calculated from the sum of the SDL Column 2 figure per the EMP201 forms submitted to SARS for the verification period.

Types of Training

The Skills Development Expenditure target is measured in monetary terms. This figure is calculated using various training related expenditure in relation to its black people, for example:

Type of Training	Criteria
External Training Formal	The costs of training sourced from ‘formal” external third party service providers will be attributed towards the Skills Development Expenditure figure. Training material will be counted too. Training outside the country will only be recognizable only if it meets the SAQA requirement for recognition Invoices will determine the amount claimable
External Training Informal	The costs of training sourced from “informal” external third party service providers will be attributed towards the Skills Development Expenditure figure, Examples of Informal training are workshops, conferences, seminars and short courses. Training material will be counted too. The Rand value that can be attributed to informal external training will be limited to a maximum of 35% of the recognised expenditure, where the training is classified as falling within category F of the of the Learning Program Matrix.
Internal training	Internal training can be formal or informal as long there are proper records of same. The value of the time spent of the employee providing by the training will be used by calculating an hourly rate based on his/her salary. This is usually calculated by dividing monthly salary by 160 The Rand value that can be attributed to informal internal training will be limited to a maximum of 35% of the recognised expenditure, where the training is classified as falling within category G of the of the Learning Program Matrix.
Ancillary costs related to training	For example, travelling and accommodation costs, venue hire, catering costs, capital expenditure related to training, rental apportionment, depreciation on training related assets These costs will be apportioned by the percentage of black staff attending the training in question and then allocated pro-rata between the black male staff and black female staff attending the training. The Rand value that can be attributed to Ancillary Costs will be limited to a maximum of 35% of the recognised expenditure,
Costs related to employing skills facilitators and staff	Should the measured entity employ full time training facilitators and staff, the salary of such facilitators and staff will be attributable towards the Skills Development Expenditure figure, but will be apportioned by the percentage of black staff employed by the measured entity as a whole and then allocated pro rata between the black male staff and black female staff.
Learnership, Apprenticeship and Internships Salaries	The salaries paid by the company to learners in Category A, B,C and D bursaries, learnerships, apprenticeships and internships will be attributed towards the Skills Development Expenditure figure.
Scholarships and Bursaries	The cost associated with scholarships and bursaries will be attributed towards the Skills Development Expenditure figure. The grant of the scholarship or bursary will however only be recognised if it is unconditional. The following 2 conditions are acceptable: There is an obligation to complete the studies within a set time period. There is an obligation for the employee to remain employed by the measured entity following completion of the studies for a period not exceeding the length of the studies.

The Skills Development expenditure excludes the Skills Development Levy paid in terms of the Skills Development Levy Act.

Skills Development Expenditure arising from Informal training or Category F and G Learning Programmes under the Learning Programmes Matrix cannot in aggregate represent more than 35%of the total value of Skills Development Expenditure.

Learning Programme Matrix

The Learning Programme Matrix sets out and categorizes the different types of learning programs that are valid under the Skills Development element and the types of training implemented as outlined above must fall within the Learning Programme Matrix in order to earn BEE points.

Training in line with the Learning Programme Matrix under Annexure 300(A) of Government Gazette No. 38765 dated 6 May 2015 as amended is also measurable for recognition if it is in the B-BBEE ICT Sector Council Priority Skills list.

Learning Programme Matrix Annexe 300(A)
Category	Programme	Narrative Description	Delivery Mode	Learning Site	Learning Achievement
A	Bursaries & Scholarships (this category includes Bursaries & Scholarships that are for school going children that do not exceed 50% of the target spend)	Institution-based theoretical instruction alone – formally assessed by the institution	Institutional instruction	Institutions such as universities and colleges, schools, AET providers	Recognised theoretical knowledge resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning
B	Mandatory Workbased Experience, Experiential training, In service training (P1 & P2); and/or Workplace experience modules for occupational certificate or part qualification.	Institution based theoretical instruction as well as some practical learning with an employer or in a simulated work environment - formally assessed through the institution	Mixed mode delivery with institutional instruction as well as supervised learning in an appropriate workplace or simulated work environment	Institutions such as universities and colleges, schools, ABET providers and workplace	Theoretical Knowledge and workplace experience with set requirements resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning
C	C1: Professional Registration (e.g. candidacy, articles etc.)	Recognised or registered structured experiential learning in the workplace that is required for professional registration – formally assessed by an industry professional registration body e.g. BEP Councils, ECSA, SACQSP, SAICA, SACPCMP etc.	Requirements as per prescribed by the industry professional registration body.	As prescribed by industry professional registration body.	Professional registration.
C	C2: Continued Professional Development	Recognised learning that results in CPD points from an industry professional registration body.	Requirements as prescribed by the training body and approved by the industry professional registration body.	Learning site as prescribed by the industry professional registration body.	Continued professional development points or credits.
D	D1: Apprenticeships, Learnerships, Occupational Certificates	Occupationallydirected instructional and work-based learning programme that requires a formal contract – formally assessed by an accredited body	Institutional instruction together with structured, supervised experiential learning in the workplace	Institutions and workplace	Theoretical knowledge and workplace learning, resulting in the achievement of a South African Qualifications Authority registered qualification, a certificate or other similar occupational or professional qualification issued by an accredited or registered formal institution of learning
D	D2: Post Graduation short term (3 -12 months) Mentorship Programme	Work experience for graduates in order to make them employable	Structured workplace experience	Workplace	Employability in the case of graduates. Employability proven by CV and Mentorship Programme (Annexe CSC300(C))
E	Occupationally directed SAQA registered unit standards, skills programmes and knowledge and practical modules for occupational certifcates and part qualifications.	Occupationallydirected instructional and work-based learning programme that does not require a formal contract – formally assessed by an accredited body	Structured, supervised experiential learning in the workplace which may include some institutional instruction	Workplace, institutional as well as ABET providers	Credits awarded for registered unit standards or occupational modules.
F	External informal programmes	Occupationally directed informal instructional programmes	Structured, information sharing or direct instruction involving workshops, seminars and conferences and short courses	Institutions, conferences and meetings	Attendance register or completion certificates from training, conference or seminar organizer
G	Internal informal programmes	Work-based informal programmes	Informal training resulting in increased understanding of job or work context or improved performance or skills	Workplace	Attendance register or log book or instruction book

Formula and example

Example for calculating 2.1.1.1 Skills Development Expenditure on Black People as a percentage of the Leviable Amount.

Leviable amount - R250 000

Skills Development Expenditure:

Black Males - R3 000
Black Females – R1 000

Step 1 – Calculate the % of All Black People Expenditure

Calculate Leviable Payroll amount – ie 2% of Total Payroll

Eg if Total Payroll is R250 000, then the Skills development target will be R250 000 x 2% = R5 000

The total black achievement:

= (R3 000 + R1 000)÷ R250 000

=1.60%

Step 2 – Calculate the Score Achieved:

The Achieved Score is therefore 1.60% / 2% x 4 points

= 3.20 points

Skills Development
Measurement Category & Criteria		Weighting points	Compliance Target
2.1.1 Skills Development Expenditure	2.1.1.1 Skills Development Expenditure on Black People as a percentage of the Leviable Amount.	4	2% (2.5% - Year 3) (3% - Year 5)
	2.1.2.1 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on African People (as defined in the Stats SA EAP)	2	% Contribution of African People to EAP
	2.1.2.2 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on Black Executive, Senior and Middle Management.	2	15%
	2.1.2.3 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on Black Junior Management.	1	10%
	2.1.2.4 The portion of SD Expenditure using the Adjusted Recognition for Gender (ARG) on Bursaries or Scholarships for Black People.	2	15%