Skills Development Levy

The Skills Development Levy (SDL) is not merely a compliance obligation for businesses in South Africa; it is a strategic tool designed to enhance the skills and productivity of the national workforce. Established under the Skills Development Act of 1998 and the Skills Development Levies Act of 1999, the SDL framework mandates that businesses above a certain size contribute a small percentage of their payroll towards skills development initiatives. In return, companies can access various training grants and programs, making the SDL a valuable resource for enhancing workforce capabilities.

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Benefits of Claiming Back SDL Paid

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1.⁠ ⁠Revenue Recovery: Businesses can reclaim substantial amounts of SDL. Up to 70% of the levies paid to SARS can be claimed back through mandatory and discretionary grants.

2.⁠ ⁠Mandatory Grants:

- Up to 20% of the levies paid can be recovered through the mandatory grant, which is disbursed quarterly by the Sector Education and Training Authority (SETA).

- To access this, companies must:

- Appoint a registered Skills Development Facilitator (SDF).

- Submit an approved Workplace Skills Plan (WSP) promptly.

3.⁠ ⁠Discretionary Grants:

- Companies can recover up to 50% of SDL through discretionary grants aimed at financing learnerships, skills development programs, apprenticeships, work placements, internships, and bursaries.

- The application process mirrors that of the mandatory grant.

4.⁠ ⁠Tax Rebates: Offering SETA-accredited training and registered learnerships can lead to further tax rebates, enhancing the financial benefits of skills development activities.

5.⁠ ⁠B-BBEE Compliance: Successful submission of necessary reports can earn points for the Skills Development priority element under the revised Broad-Based Black Economic Empowerment (B-BBEE) Codes, thus improving the company’s overall B-BBEE score.

6.⁠ ⁠Improved Employment Equity Management: The information collected through WSP and Annual Training Reports (ATR) aligns closely with Employment Equity reports, facilitating better management of labor demographics.

7.⁠ ⁠Enhanced Workforce Skills: Skills development initiatives foster a more skilled and productive workforce, supporting effective succession planning.

8.⁠ ⁠Sector Information Contribution: The annual submission of reports provides critical data to SETAs, aiding in the development of sector skills plans that contribute to the National Skills Development Plan.

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