This article gives a quick overview of everything employers need to know about their Skills Development Levy (SDL).
What is an SDL?
Employers with an expected annual payroll of over 500k must register and pay Skills Development Levy. The SDL is used to develop and improve employee skills and to encourage the learning and development of employees.
Some entities are exempt, including government entities, but most for-profit businesses with an annual payroll above the threshold must pay SDL.
How much is the SDL and how is it paid?
The total SDL per annum is equal to 1% of your total annual payroll (including overtime payments, leave pay, bonuses, commissions, and lump-sum payments).
This must be paid monthly to SARS, completed on the Monthly Employer Declaration (EMP201), using the unique Payment Reference Number (PRN) generated for the EMP201.
It has to be paid within 7 days from the last day of the month.
What happens to the money I’ve paid?
The SDL paid by businesses is used mainly by SETAs. The SETA gets 80% of your levy and uses that as follows:
- 10.5% for Administration
- 20% for Mandatory Grants
- 49.5% for Discretionary Grants (80% for PIVOTAL and 20% for other training)
The National Skills Fund (NSF) gets the other 20% and uses that as follows:
- 18% for Priority Skills
- 2% for SARS Administration Costs
How can you benefit most from paying SDL?
With the breakdown above, it becomes clear pretty quickly how your business can benefit the most:
- Claim your Mandatory Grant every year – this puts a portion of the SDL right back into your pocket to fund your employees’ training
- Apply for Discretionary Grants – and focus on PIVOTAL training to get the best chances of receiving the grants you apply for.
When in doubt, talk to a professional! Skills Development Facilitators should be experts in knowing how to apply your Skills budget with savvy so you can get the most out of your SDL and your training initiatives.
To read more about this, go to:
https://www.servicesseta.org.za/page?&site=emp_Overview