April 15, 2024

The distribution of learnerships as well as training programmes and initiatives is what the Skills Development Act intends to facilitate. These efforts are funded by the Skills Development Levy (SDL), but what is it and how does it work?

What is the Skills Development Levy Act?

First released in 1999, the Skills Development Levies Act is a compulsory levy scheme (payable monthly by employers) to fund the training envisaged by the Skills Development Act. The Minister of Higher Education and Training and Sector Education and Training Authorities (SETAs) are responsible for administrating the processes followed in the Skills Development Act of 1998.

What Does the Skills Development Act Mean for Employees?

When you ask yourself “what is the purpose of the Skills Development Act?” the one thing to remember is that the SDL is what makes this possible. The Skills Development Act is in place to develop the skills of the South African workforce through training initiatives and to improve the employment prospects of those previously disadvantaged and excluded from the South African workforce.

How Much Needs to be Paid and By When?

The Skills Development Levy is paid by all employers, excluding:

  • Public services
  • Religious or charity organisations
  • Public entities who receive more than 80% of their funds from Parliament
  • Employers who pay all their workers less than R250 000 annually
  • Any employers not required to register according to the Income Tax Act

Employers must pay 1% of all their workers’ pay to the Skills Development Levy every month and it is punishable to deduct this from workers’ pay.

The amount should be payed to SARS, commencing on the day following the last day of the preceding alternate period in relation to the employer and ending on a date falling (not more than 14 days before or after the last day of February) in February of each year.

The Skills Development Levy is what makes the implementation of the Skills Development Act possible. Contact us to discover how you can be compliant and be sure to follow the procedures of local business legislative requirements.