If you currently pay school or study fees for your children or any family members who are in school (Grade R – 12) or in college/university (NQF level 1 – 10) - see video link below. We can help you save every month by moving this from a post-tax to a pre-tax expense, by utilising this amazing new company benefit. Please watch this 90 second video for more information: https://www.smartfunder.co.za/about
You qualify for the benefit if you meet both of the criteria below:
1. Earned R600 000 or less in total remuneration in the previous tax year
2. Pay school or study fees for any children or relatives within the 3rd degree of consanguinity
This is not additional funding, but a more tax efficient way of paying your existing school- or study fees for your children or relatives.
The graph below indicates all qualifying relatives that fall within the 3rd degree of consanguinity:
No, unfortunately, only educational expenses that you pay for your children or relatives qualify.
Your total educational fees can be restructured. However, the
tax-exempt portion is capped as follows:
• Annually per child or relative for grades R to 12 : R20 000
• Annually per child or relative for NQF level 1 - 4 qualification : R20 000
• Annually per child or relative for a tertiary NQF level 5 - 10 qualification : R60 000
Everything above the tax-exempt portion will be treated as a taxable benefit. Please refer to last FAQ (What if the educational fees per relative are more than the tax-exempt cap?) below for more information.
The exemption is per relative of the employee. For example, if you have 2 children at school, you can restructure up to R40 000 (R20 000 x 2) per annum as a tax-exempt benefit, paid in monthly instalments.
When registering, you specify the amount of school fees for the year and the applicable payment terms. The total amount specified will be divided in equal monthly instalments, based on the payment term selected, which will be deducted from payroll monthly and paid to the educational institution at month end. A notice of payment will be sent to both you and the educational institution after each payment.
When your employer makes the monthly school fees payment to the educational institution, you will receive an email or SMS payment notification with all the relevant information.
You choose your own amount to be deducted, so you don’t have to utilise the maximum allowable tax-exempt benefit amount. When you register, you will specify the benefit amount. This will be equal to your total outstanding educational fees until the end of the calendar year.
No. Your total remuneration will remain unchanged and will only be restructured in a more tax-
efficient way. Only the tax amount paid will change. Your payslip will be updated to reflect the
amount paid to the educational institution as a non-taxable benefit.
Your IRP5 will reflect the non-taxable benefit as the following IRP5 codes:
• Grade R – 12 non-taxable benefit : 3815
• NQF level 1 - 4 non-taxable benefit : 3815
• NQF level 5 - 10 non-taxable benefit : 3821
If you have a taxable portion (see question below), your IRP5 will reflect the taxable benefit as the following IRP5 codes:
• Grade R – 12 taxable benefit : 3809
• NQF level 1 - 4 taxable benefit : 3809
• NQF level 5 - 10 taxable benefit : 3820
Your total educational fees can be restructured as a benefit. However, the
tax-exempt portion is capped as follows:
• Annually per relative for grades R to 12 : R20 000
• Annually per relative for NQF level 1 - 4 qualification : R20 000
• Annually per relative for a tertiary NQF level 5 - 10 qualification : R60 000
If the educational expense exceeds the tax-exempt cap, you have the option to settle the total expense through the SmartFunder platform or utilise only the tax-exempt portion and personally settle the balance with the institution. For example, if your school fees for a Grade 7 learner is R26 000 per year, you can:
• Scenario 1 : Settle the full R26 000 from your payroll using the SmartFunder platform
• Scenario 2 : Choose to only utilise the non-taxable portion of R20 000 and personally settle the remaining balance of R6 000
The tax saving will be the same in both scenarios:
An educational institution qualifies if that institution has been established by or registered under the laws of South Africa, for example the Department of Education, the Higher Education Act, 1997, the Skills Development Act, 1998 or the National Research Foundation Act, 1998. A foreign educational institution also qualifies if the qualification obtained from that institution upon completion of such studies would be recognised by the South African Qualifications Authority under the National Qualifications Framework Act, 2008. Most schools and tertiary educational institutions are pre-loaded onto the SmartFunder platform. You can select the relevant institution when you register your relative.
Ensure that you select the correct province where the educational institution is situated. Start your search with the actual name of the institution. For example, when searching for “Florida High School”, start your search with “Florida”. When searching for tertiary educational institutions, use the full name and not the abbreviation. For example, start your search with “Pretoria” if you are searching for the “University of Pretoria” or “South Africa” when you are searching for “UNISA” (University of South Africa). If the institution is not on our list, select the “Recommend an Educational Institution” button and add the required details to enable SmartFunder to verify the educational institution.
If your new employer is part of the SmartFunder family, you can register under their profile and continue with the benefit. If not, you will be disenrolled and you will be held liable for the outstanding school fees.
If you register for January, you can choose between a 10- or 11-month payment term for payments towards the school. The term will start from the end of January until end of October or November. For tertiary education, we offer a 6-, 7-, 10- or 11-month payment term. The payment terms will be adjusted accordingly when registering later in the year, taking into account the month of registration, and the last instalment will always remain either October or November (depending on the payment term selected). E.g. if you register in July and select November as the last payment date, 5 instalments will be paid.
No, as your school fees will now be paid in monthly instalments. However, in almost all cases the tax saving through this benefit is significantly higher than the early settlement discounts. Please contact your HR representative to find out exactly how much more you will be saving.
From the first month of utlising this benefit as this is a monthly payroll adjustment and you will see the benefit by way of a reduction in tax paid. This will also reflect on your employer provided IRP5 at the end of the tax year.
No. Only fees still outstanding at the time of registration qualify. The tax act does not allow for reimbursements.
1. Name and surname of relative
2. ID number of your relative
3. Student number
4. The balance of the school fees still payable to the educational institution for the remainder of the year
5. Payment reference number you use when making payments to the institution
6. Name of institution (school)
7. Banking details of the educational institution:
• Account holder name
• Account number
• Bank Name
• Type of account
• Branch Code
Your gross salary will remain unchanged. However, your educational expenses will now be paid directly to the educational institution via a payroll deduction. Your net salary will decrease as a result, but your educational expenses will already be settled. Therefore, you’ll pay less income tax and your disposable income will increase.
You can expect to see the relevant codes from the list below on your IRP5:
Grade R–12 or NQF level 1-4
3815 : Non-taxable bursaries & scholarships: basic education
3809 : Taxable bursaries & scholarships: basic education
Tertiary Education NQF level 5-10
3821 : Non-taxable bursaries & scholarships: further education
3820 : Taxable bursaries & scholarships: further education
Other fees (if applicable)
3806 : Admin Fees (If employee is liable)
When making use of the SmartFunder benefit, you will be saving your marginal tax rate on your education fees.
The below matrix indicates how much you can save utilising the School Fees Benefit assuming you make use of the full benefit per child and have no other tax-deductible expenses. These numbers are based on the March 2019 to February 2020 tax year.
To reset your password, go to https://employee.smartfunder.co.za/app/login
and enter your ID number under the “Request/Reset Password” header. You will then receive either an email or an
SMS to reset your password.
If you received an email : Click on the “Register” button and follow the prompts
If you received an SMS : The SMS will contain 4 digits (For example 1234). Go to https://employee.smartfunder.co.za/app/login and use the “Login” function on the left hand side to enter your ID number as a Username and the 4 digits (1234) as your password.
Please ensure to use the latest email or SMS received when attempting to reset your password. If none of the above resolves the problem, please send us a screenshot of where the problem occurs and we will escalate the matter.
Yes, according to the Tax Act, an employer needs to have the correct policy and documentation in place in order to administer Section 10(1)(q) in a compliant manner.
Yes, SmartFunder provides the employer with all the documents required in order to administer the benefit in a compliant manner.
No, the employer only makes one bulk payment to SmartFunder. SmartFunder then takes care of the allocation of these fees to the correct educational institutions.
SmartFunder can make payments to all schools in South Africa, public and private, as long as they are registered with the Department of Education. Thereby we ensure that all fees are paid to registered and verified educational institutions.
Every month, SmartFunder will provide the Employer with a payroll adjustment file, on a date as specified by the Employer. This file pulls into the Employer’s payroll software, in the exact same manner as a medical aid contribution file. The employer only needs to import this file into their software and make one bulk payment for the total fees amount to SmartFunder.
There is not cost! SmartFunder aims to provide this to employers at a budget neutral level, thereby offering a fantastic benefit to employees, at no additional cost to the employer.
SmartFunder charges an administration fee for each beneficiary for whom we process payments. This is not a set fee, instead it is a sliding scale, based on an employee’s CTC. An employer has the choice to either pay this admin fee on behalf of the employee, or to have the employee pay the admin fee.
Certainly, we do not have a minimum required size in order to offer the benefit. However, we do require a minimum total monthly admin fee of R3000 per employer. If the total admin fees of all employees are less than R3000, an employer will only be liable for the shortfall.
Yes, fees processed through SmartFunder decreases an employer’s Total Leviable Amount. An employer’s Skills Development Levy and Skills Development Target are linked to their leviable amount. A decrease in Total Leviable Amount would therefore have a direct impact on an employer’s levy and target.
Section 10(1)(q) has existed for a long time, however recent changes to the non-taxable limits and qualifying criteria have cast a spotlight on the potential benefits.
Certainly not. We have designed our product from the ground up with both your HR department and Payroll department in mind. We take care of every single part of the administration, starting with employee education, employee registration process, the vetting around applications right through to the distribution of school fees. All that is left for you as employer to do is a simple payroll adjustment and a single third-party payment.
We have a full-service support desk including digital support as well as a fully-fledged call center which employees can contact with queries.
SmartFunder is administered on a monthly basis, making it easy to reconcile the payments we make. If an employee is on the payroll file provided by SmartFunder, but is no longer employed at the company, no deduction will be made and subsequently no payment to the school for this specific employee. The individual would now be responsible for making the payments, as they did before they made use of SmartFunder.