What Exactly Is A Skills Development Levy, and How Does It Work?

What exactly is the Skills Development Levy?

Do you know what the Skills Development Levy is? Everything you need to know is outlined below.

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

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

Is the Skills Development Levy mandatory for employers?

As an employer, you must pay the skills development levy on a monthly basis if you:

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

You must pay 1% of the total amount paid in employee salaries, which includes the following:

• Payments for overtime
• Bonuses,
• commissions,
• lump sum payments are all examples of leave pay.

More information on the Skills Development Levies can be found here, Western Cape Government Website