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Bursaries and Scholarships

SimplePay has a Bursaries and Scholarships system item where you can capture these types of payments either as a once-off amount or as regular instalments. Based on the taxable and exempt portions you enter, SimplePay will automatically report these types of payments under the correct SARS tax codes.

Any bona fide bursary or scholarship granted to enable or assist any person to study at a recognised educational or research institution may be exempt from income tax, provided that it meets the criteria as set out by SARS. More information can be found in SARS’s Guide for Employers in respect of Employees' Tax here and SARS’s Interpretation Note 66 here.

SARS updates

SARS is in the process of publishing a newer version of the Guide for Employers in respect of Employees' Tax, which we'll link to as soon as it's available. Because SARS guidance is updated from time to time, please confirm the latest position directly with SARS (or your tax practitioner). If the relevant SARS requirements are not met, the full bursary or scholarship will generally be treated as a taxable fringe benefit.

From the 2027 year of assessment, i.e from 1 March 2026, the annual remuneration limit is R 900,000.

Checking of SARS exemption limits

As the applicable limits depend on individual circumstances, SimplePay does not check whether the amounts you enter fall within SARS limits. It is your responsibility to capture the Taxable Portion and Exempt Portion correctly based on the employee’s circumstances, as well as the applicable year of assessment and limits.

Once-off

You can pay a bursary or scholarship amount in one lump sum to the employee, or directly to the educational institution. When you set up this item, you can mark any payments under the annual limit as tax-exempt.

To add the item:

  1. In the left sidebar, click Employees, and select the relevant employee.
  2. Click Add next to Payslip Inputs.
  3. Click Bursaries And Scholarships under Benefit.
  4. Enter the Taxable Portion and/or Exempt Portion of the bursary or scholarship.

  5. Select the Type of study from the drop-down:

    • Basic Education (Grade R to 12 and NQF levels 1 to 4) Education
    • Further Education (NQF levels 5 to 10)

  6. Check the Employee handles the payment box if applicable.

    Effect on payslip

    Checking this box will add an allowance item to the employee’s payslip – which will not influence PAYE.

  7. Check the To a disabled person box if applicable.

  8. Click Save.

Instalments

The Bursaries and Scholarships item can also be added as a regular payslip item (on every payslip) and can be paid to the employee, or directly to the educational institution by the employer.

Regardless of how the item is paid, the prescribed annual limits and conditions must be satisfied for the payment to be a non-taxable fringe benefit.

To add the item:

  1. In the left sidebar, click Employees, and select the relevant employee.
  2. Click Add next to Regular Inputs.
  3. Click Bursaries And Scholarships (Regular) under Benefit.
  4. Enter the Taxable Portion and/or Exempt Portion of the bursary or scholarship.

  5. Select the Type of study from the drop-down:

    • Basic Education (Grade R to 12 and NQF levels 1 to 4) Education
    • Further Education (NQF levels 5 to 10)

  6. Check the Employee handles the payment box if applicable.

    Effect on payslip

    Checking this box will add an allowance item to the employee’s payslip – which will not influence PAYE.

  7. Check the To a disabled person box if applicable.

  8. Click Save.

Annual Limits and Base Requirements

2027 limits

The limits below apply from the 2027 year of assessment. For earlier years, please contact SARS.

Where a bursary or scholarship is granted to the employee directly

  • It is fully tax-exempt, provided that you have confirmation that the employee must repay the loan if they drop out or fail.

Where a bursary or scholarship is granted to a relative of the employee

  • It is fully tax exempt provided that the employee’s total remuneration does not exceed R 900,000 in that year of assessment; and
  • There is an annual limit of R 30,000 for studies from Grade R to 12, including qualifications at NQF levels 1 to 4; or
  • An annual limit of R 90,000 for qualifications at NQF levels 5 to 10.

Disability limits

These limits are increased for relatives of the employee who have disabilities:

  • Grade R to 12, including qualifications at NQF levels 1 to 4: R 45,000
  • Qualifications at NQF levels 5 to 10: R 130,000

No salary sacrifice

In addition, a main condition for all types is that the exchange must not involve any element of salary sacrifice to make provision for the bursary.