Scholarships & Bursaries

Any bona fide scholarship or bursary granted to enable or assist any person to study at a recognised educational or research institution may be exempt from normal tax in terms of section 10(1)(q).

Bursaries or scholarships that are competed for by, or are awarded on merit to non-employees are exempt from normal tax.

A scholarship or bursary granted by an employer to and employee is exempt from normal tax as long as the employee agrees to reimburse the employer if he or she fails to complete his or her studies for reasons other than death, ill-health or injury.

Where a scholarship or bursary is granted to a relative of an employee, the amount will be exempt from normal tax if the following requirements are met:

  • The remuneration of the employee in relation to a year of assessment may not exceed R600 000.

The amount that is exempt, is limited to the following:

  • R20 000 in respect of grades R to 12.
  • R20 000 in respect of a qualification to which an NQF level from 1 up to and including 4 has been allocated.
  • R60 000 in respect of a qualification to which an NQF level from 5 up to and including 10 has been allocated (Higher education).

Where an employer grants a bursary to a person with a disability who is a member of the family of an employee in respect of whom the employee is liable for family care and support, the amount will be exempt from normal tax if the following conditions are met:

  • The remuneration of the employee in relation to a year of assessment may not exceed R600 000.

The amount that is exempt, is limited to the following:

  • R30 000 in respect of grades R to 12.
  • R30 000 in respect of a qualification to which an NQF level from 1 up to and including 4 has been allocated.
  • R90 000 in respect of a qualification to which an NQF level from 5 up to and including 10 has been allocated (Higher education).

To the extent that a bona fide bursary does not qualify for the exemption, it is taxable in the employee’s hands.