The Government enacted the Skills Development Levies (SDL) Act 1999 in order to provide a framework to implement strategies that will develop and improve the skills of the South African workforce. Skills Development is the training and development that employers offer.
It is required by law that companies with annual payrolls in excess of R500,000 have to contribute towards this fund by paying a monthly levy to SARS, along with their EMP201, equal to 1% of their total monthly remuneration paid. In terms of the act, companies can claim back 55% of the levy paid by them. Companies failing to pay the SDL will be liable to penalties and fines of 10% of the leviable amount.
The following organisations are exempt from paying SDL:
• The public sector;
• Employers with an annual payroll of less than R500,000;
• Religious or charity organisations;
• Public entities that get 80% or more funding from Parliament;
• Municipalities with exemption certificates.