The capacity to learn and acquire new skills is beneficial to anyone’s career. However, not everyone in South Africa has had the chance to acquire the knowledge and skills required to develop a successful career. This means they are unable to do their work to the best of their abilities and may face unemployment.
All they need is a little motivation and a programme to help them master these important skills. That is precisely the purpose of Skills Development Levies.
What Are Skill Development Levies?
Skill Development Levies (SDL) is a levy designed to assist in the development and growth of the number of trained professionals in South Africa. Employees will become more proficient in their job and hence advance in their careers.
Employees who meet the SDL criteria must pay a set amount of money to the South African Revenue Service (SARS). Only if the company is registered with a SETA is this levy charged.
What Is A SETA?
SETA, or Sector Education and Training Authority, is a scheme that employers must register with based on the industry in which they work. There are 21 SETAs in South Africa, and employers must register with the appropriate one.
The SETA will thereafter be responsible for using the Skill Development Levies (SDL) to develop skill-based programmes for employees who want and need to obtain the skills required to do their jobs and advance in their careers.
What Are The Advantages Of SDL?
Working individuals who want to further their careers can benefit greatly from Skills Development Levies. The following are some of the benefits of Skills Development Levies:
- People can start applying for job openings that demand certain skills
- You can earn promotions within your work if you have certain skills
- Skilled workers can work in a variety of roles inside a single organisation, making them adaptable
- People will gain scarce and in-demand skills in the industry and find work easily
What Is The Process Of A Company Claiming SDL?
There are a few basic procedures you must go through if you want to claim SDL for employees at your firm who wish to advance their skills.
- You must register with the Skill Development Levies (SDL) contribution scheme
- You must also register with the SETA applicable to your industry
- Each year, you must submit an ATR (Annual Training Report) and a WSP (Workplace Skills Plan) by the 30th of April
- Keep all records of the training you have provided. Then apply for a required grant within six (6) months after registration
- Your money will then be returned, and the SDL will be repaid
How Is SDL Calculated?
The SDL is calculated according to the salary bill of the employer. This means that all the payslips of the employees in a company should be added together to get this salary bill. Any other additional payments, such as these, should also be included:
- Leave pay
- Overtime pay
- Lump sum payments
If the salary slip exceeds R500 000 per year, the employer must calculate and pay 1% of the salary slip to SARS as their SDL.
How Should SDL Be Paid?
You can pay SDL by using one of the following payment methods:
- At a branch of a relevant and approved banking institution
- Through eFiling
- An electronic funds transfer (EFT)
When Should SDL Be Paid?
The SDL should be paid by eligible companies no later than seven (7) days after the end of each month. This date is determined by when your first deduction was made. If this date falls on a weekend or a holiday, the payment should be paid on the business day before the weekend or holiday.
What Happens To The SDL Funds?
The SETA, with which your company is registered, collects the SDL money. When you have employees that want to learn new skills, you may use the SDL to help them. The money is given to people who desire to study and enhance their skills. This can be done at their own convenience and according to their own schedule.
Is SDL Contribution Compulsory?
No, it is not mandatory for all employers to pay SDL. Some businesses are compelled to pay SDL if they meet specified criteria; if they do not, they are not obligated to pay for this service.
Who Must Pay SDL?
Employers are required to pay SDL if their annual salary slip exceeds R 500 000 or if they have more than 50 staff members employed. You must then register with SARS to pay for this service.
Which Employers Are Exempt From Paying SDL?
Some employers are exempt from paying SDL if they meet the criteria listed below:
- They do not have an annual payroll that exceeds R 500 000 for all of their employees
- A municipality that has received a certificate from the Minister of Higher Education and Training exempting it from paying SDL
- Any public health organisation that has received a letter from the Tax Exemption Unit (TEU) stating that SDL contributions are not required
- A provincial or national public entity that receives 80% or more of its funding directly or indirectly from Parliamentary funds
- Public service employers in the provincial or national spheres of government do not have to pay SDL
What Are The Implications Of Not Paying The Skills Development Levy?
There will be consequences if you qualify for the Skills Development Levy but do not fulfil your obligations. Sections 11 and 12 of the Skills Development Levies Act provide that if an employer fails to pay the SDL, they will face penalties as well as interest on the funds that are outstanding. This should be paid directly to SARS.
Author: Esmari Pool
Editor: Esmari Pool
Date Published: November 7, 2022