The Skills Development Levy was established under the Skills Development Act. A levy is an amount of money that employers have to pay to the South African Revenue Service (SARS) for skills development of employees. If employees undergo training then the employer can claim this amount back from the relevant SETA.

PAYING THE SKILLS DEVELOPMENT LEVY

An employer must pay a skills development levy every month if:

• The employer has registered the employees with SARS for tax purposes (PAYE), and/or – The employer pays over R500 000 a year in salaries and wages to their employees (even if they are not registered for PAYE with SARS)
• An employer must pay 1% of the total amount paid in salaries to employees (including overtime payments, leave pay, bonuses, commissions and lump sum payments)

The employer must register with SARS and pay the levy monthly. SARS will supply the correct forms to fill in (SDL 201 Return Form). The levy must be paid to SARS not later than 7 days after the end of every month.

HOW ARE THE LEVIES USED?

The levies paid to SARS are put in a special fund. 80% of the money from this fund will be distributed to the different SETAs with 10% of this going towards paying SETA administration. The other 20% will be paid into the National Skills Fund. The SETAs will then pay grants to employers who appoint a Skills Development Facilitator. The National Skills Fund will fund skills development projects that don’t fall under the SETAs. Even if an employer’s total salary bill is less than R500 000 and they don’t have to pay the SDL, they can still claim from the SETA for training and development.

GETTING A SKILLS DEVELOPMENT GRANT

An employer can get money back from the SETA or the National Skills Fund to use on training and developing their own employees’ skills.

An employer can get back up to 70% of the levies they paid to SARS from the relevant SETA. The grants that can be claimed back are:

• 20% of the levy in a Mandatory Grant
• 50% of the levy in Discretionary Grants for Learnerships, Skills Programmes, Apprenticeships, Workplace Experience Placements, Internships and Bursaries.

There are also benefits of tax rebates on registered learnership programmes.

The requirements to be able to claim SDLs are:

• Register as a Skills Development Facilitator (SDL)
• Submit a Workplace Skills Plan (WSP) indicating training planned for the next reporting period
• Submit an Annual Training Report (ATR) as proof of the training conducted during the previous reporting period

By submitting company reports on training, employers can also improve their BBBEE score.