More about the Skills Development Levies Act – Skills Levies and Skills Plans
The Skills Development Act was implemented by the South African government in 1998, during which time there were high levels of unemployment, low levels of investment in South Africa on a global scale, as well as significant imbalances in income distribution. By implementing this act, the government aimed to improve the skills and productivity of its workforce.
The primary aim of the skills development act is to provide an institutional framework to implement national, sector and workplace strategies to develop and improve the skills of the South African workforce. These strategies are then integrated with the National Qualification Framework.
Furthermore, the act aims to provide opportunities for those in the South African workforce to gain recognised occupational qualifications. The act also aims to provide financing for skills development and to provide for and regulate employment services.
Who must pay skills levies?
Every employer who is registered with SARS for PAYE and who has an annual payroll (total salaries and wages including bonuses, commission, etc.) in excess of R500 000 (approximately R41 000 per month), or 50 plus staff members is required to pay skill levies.
All employers who are required to pay the skills development levy must register with the South African Revenue Services (SARS).
Employers are required to pay 1% of their payroll to the skills development levy fund every month, and the levy may not be deducted from workers’ pay.
By complying with certain legal and procedural requirements, employers may claim up to 60% of the skills development levy (SDL) back from their Skills Education Training Authorities (SETA). Deadlines for submission is June of every year.
Employers must pay the levy to the South African Revenue Services (SARS) by the 7th day of each month.
Based on the legislation in section 11 and section 12, of the Skills Development Levies Act, employers who do not settle the relevant liability to SARS timeously will be subjected to penalties and interest on the amount outstanding.