B-BBEE Skills Development Element: The Complete Guide

Why Skills Development Is a Priority Element

Skills Development was elevated to priority status under the Amended Codes because skills gaps are a fundamental barrier to broad economic participation. The dtic recognised that without deliberate investment in human capital development, ownership and management transformation alone would be insufficient to achieve genuine economic empowerment.

The element is measured using spending targets as a percentage of the Leviable Amount — the payroll figure used to calculate Skills Development Levy (SDL) obligations. This ensures targets scale with the size of the employer, making them achievable for entities of all sizes above the QSE threshold.

The Leviable Amount Explained

The Leviable Amount is the total remuneration paid or payable to employees during the measurement period, calculated in accordance with the Skills Development Levies Act 9 of 1999. It includes salaries, wages, overtime, bonuses, and directors' fees. It excludes certain payments such as reimbursements, allowances not included in gross remuneration, and independent contractor payments.

All Skills Development spending targets are expressed as a percentage of the Leviable Amount, which ensures the requirement is proportionate to the size of the organisation's workforce costs.

Key Targets and Points Allocation

The 20 points are allocated across several sub-elements:

• Learnerships, apprenticeships, and internships for black employees: up to 8 points based on number and duration of enrolments
• Skills development expenditure on black employees as a percentage of Leviable Amount: 6% target (8 points)
• PIVOTAL programme training: additional points for occupationally directed qualifications
• Bonus points: enrolling black people with disabilities or black youth in learnerships (up to 2 bonus points)
• Absorption of learners into permanent employment after completion: recognition points

PIVOTAL Programmes

PIVOTAL stands for Professional, Vocational, Technical and Academic Learning. These are programmes leading to registered qualifications and part-qualifications on the National Qualifications Framework (NQF). They include learnerships (which lead to NQF qualifications and are workplace-based), apprenticeships (for trade qualifications), internships (structured workplace experience), and bursaries leading to tertiary qualifications.

PIVOTAL spend attracts higher recognition in the scoring matrix than non-PIVOTAL (general) training spend. Entities seeking to maximise Skills Development points should prioritise enrolling black employees in registered learnership programmes registered with the relevant SETA.

The Sub-Minimum Requirement

The sub-minimum for the Skills Development priority element is 40% of the total net points achievable on Skills Development. At 20 points, this means at least 8 net points must be earned on Skills Development to avoid level demotion. Entities must therefore ensure minimum actual skills development spend reaches at least 40% of the 6% target — i.e., at least 2.4% of Leviable Amount — as a floor.

In practice, entities should aim to clearly exceed the 40% sub-minimum threshold rather than operate near the boundary, since verification calculations can vary slightly and any shortfall triggers demotion.

Linking Skills Development to SETA Grants

All SDL-paying employers (those with a wage bill above R500 000) must register with the relevant SETA and submit a Workplace Skills Plan (WSP) and Annual Training Report (ATR) by 30 April each year. Compliant submission allows employers to claim back mandatory grants (20% of SDL paid) and apply for discretionary grants to fund learnerships and other programmes.

B-BBEE-aligned skills planning maximises both the SETA grant recovery and the B-BBEE points earned. The key is to direct spending towards black employees and towards registered programmes (learnerships and PIVOTAL qualifications) rather than generic short courses.

Frequently Asked Questions

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