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Tax & SARS

Employers Pay a Separate Tax Just to Fund Skills Training — Even If Staff Never Use It

The Skills Development Levy is a payroll tax of 1% of an employer's total monthly remuneration bill, payable by any business with an annual payroll above R500,000, funding SETA and National Skills Fund training programmes.

Many small business owners are surprised to learn SDL exists as a separate payroll cost once their business crosses the threshold — it's easy to budget for PAYE and UIF and overlook this third payroll levy. Registered employers can potentially claim back a portion as a training grant from their relevant SETA, but only by actively submitting the required workplace skills planning documents.

Source: SARS

Frequently Asked Questions

Is SDL deducted from an employee's salary?

No — it's calculated on total payroll but paid entirely by the employer; it cannot legally be deducted from an employee's pay.

Which businesses are exempt from paying SDL?

Employers with an annual payroll of R500,000 or less, along with certain public sector employers and qualifying public benefit organisations, are exempt.

How can an employer claim back some of what it pays in SDL?

By registering with the relevant SETA and submitting a Workplace Skills Plan and Annual Training Report by the required deadlines to qualify for a training grant.

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