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What Is A Skills Development Levy And How Does It Work?

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What is a Skills Development Levy?

Wondering that the Skills Development Levy is? Below we uncover everything you need to know.

Skills Development Levy (SDL) is a levy imposed to encourage learning and development in South Africa. The funds are paid to the South African Revenue Services (SARS) and are to be used to develop and improve skills of employees in the workplace.

As an employer, if you submit a Workplace Skills Plan (WSP) and an Annual Training Report (ATR) then a percentage of the levies that you’ve paid will be paid as a mandatory grant towards the company.

Are employers required to pay the Skills Development Levy?

As an employer, you’re required to pay the skills development levy every month if:

  • you’ve registered your employees with SARS for tax purposes (Pay As You Earn (PAYE)), and
  • if you pay over R500 000 a year in salaries and wages to your employees (even if they’re not registered for PAYE with SARS). 

You’ll need to pay 1% of the total amount paid in salaries to employees, including the following: 

  • overtime payments
  • leave pay
  • bonuses
  • commissions
  • lump sum payments

For more information on the Skills Development Levies, click here.

 

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