The Skills Development Levy (SDL) is a levy imposed to encourage learning and development in South Africa. The funds are to be used to develop and improve skills of employees.
The applicability of the levy is determined by the employer’s salary bill – i.e. the total amount of salaries paid for a given 12 month period – and employers are required to make these contributions unless one of the exemptions mentioned below is applicable.
Calculating SDL
The employer’s contribution is calculated as 1% of leviable amount, which is equivalent to the employee’s remuneration for PAYE purposes – in other words, the employee’s remuneration less any taxable income deductions. Please see the following section for more information on the concepts of remuneration and taxable income deductions:
There is no employee contribution portion.
SDL Trace
The SDL trace provides you with information on how the SDL contribution is calculated for an employee. To view the SDL trace:
- Go to an employee’s profile and navigate to the relevant payslip.
- Open the web view for the payslip by clicking on More next to Preview (draft payslips) / View (finalised payslips).
- Click on SDL – employer to view the SDL trace.
- You can then drill further down into the calculation by clicking on Income subject to SDL to view how the income subject to SDL is determined.
Paying SDL
SDL contributions must be paid monthly along with an employer’s PAYE and UIF liabilities when submitting the EMP201. More details on each of these aspects can be found in the following sections:
SDL Breakdown
You can view a breakdown of the SDL calculated per employee. To do this:
- Go to Filing > Monthly Filing
- Navigate to the relevant month
- Click on Web under the EMP201 heading to open the web view of the EMP201
- Click on the total for SDL
SDL Exemption
SDL Exempt Employers
The following employers will be exempt from paying SDL:
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- Employers whose annual salary bill for the coming 12 month period won’t exceed the prescribed amount of R500 000 – there is no need for these employers to register
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- Any public benefit organisation (PBO) exempt from paying Income Tax in terms of Section 10(1) (cN) of the Income Tax Act No.58 of 1962, which only carries on certain welfare, humanitarian, health care, religion, belief or philosophy public benefit activities or only provides funds to a PBO and to whom a letter of exemption has been issued
- Municipalities and organisations within the provincial and national sphere of government are also generally exempt
If your company falls into one of the above-mentioned categories, you can mark it as SDL exempt as follows:
- Go to Settings > Payroll Calculations
- In the SDL Registration field, select “Not Registered” from the dropdown menu
- In the Effective from field, enter the effective date that your registration changed. If you haven’t been registered for SDL since the company inception, enter the company registration date
- Click Save
SDL Registered and Exempt Employers
PBOs (Public Benefit Organisations) who have registered for SDL but are SDL exempt can indicate this as follows:
- Go to Settings > Payroll Calculations
- In the SDL Registration field, select “Registered and SDL Exempt” from the dropdown menu
- In the Effective from field, enter the effective date that your registration changed. If you haven’t been registered for SDL since the company inception, enter the company registration date
- Click Save
SDL Exempt Employees
Registered employers must contribute for each employee to whom remuneration is paid, unless they fall into one of the exempted categories in section 3(5) of the SDL Act. The most common group of exempt employees is learners under section 18(3) of the Skills Development Act. These employees can be marked as such by selecting the “Learner in terms of the SDL act (also SDL exempt)” on their Classification screen. Please see the following article for more information: