The Skills Development Levy (SDL) is an amount of money that employers have to pay to SARS for skills development of employees.

WHO DOES THE SDL APPLY TO?

The Skills Development Levies Act applies to all employers except:

• The public service
• Religious or charity organisations
• Public entities that get more than 80% of their money from parliament
• Employers –
  • whose total pay to all its employees is less than R500 000 per year; and
  • who do not have to register the employees with SARS for tax purposes (PAYE)

REGISTERING WITH SARS

Employers who are required to pay a skills development levy must register with SARS.

PAYING THE SDL

Employers must pay a levy of 1% of the total amount paid in salaries to employees (including overtime, leave pay, bonuses, commissions and lump sum payments) every month. The levy may not be deducted from the employees’ pay. The levy must be paid by the 7th day of each month.

DISTRIBUTING THE SDL FUNDS

SARS pays 80% of the total levy money paid by employers over to the Sector Education and Training Authorities (SETAs). When employers register, they must tell SARS which (SETA) they belong to. Employers who fall under more than one SETA must consider the following when deciding which one is best for their workplace:

• Composition of their workforce
• Pay of the different employees
• Training needs of the different employees.

Employers can claim back from the SDL up to 70% of the levy, provided they can

prove that they have undertaken training for their staff. SARS will supply the correct forms to fill in (SDL201 return form).

The Skills Development Fund gets 20% of the money, which is used for special training.

Payments of employees’ tax, SDL and UIF contributions must be paid together into the SARS account and must be reflected correctly and separately on the EMP 201 form in order to ensure that payments are correctly allocated.

For more information on the Skills Development Fund and Levy and how to register, view the following website: www.labour.gov.za and click on ‘Skills Development Levy’. (See Skills Development Act)