If your company’s payroll is more than R500,000 a year, you pay the Skills Development Levy (SDL) every month. Many employers treat it as just another tax. It doesn’t have to be: part of it can come back to you as a grant, as long as you do the paperwork on time.
What the Skills Development Levy is
The SDL is 1% of your total payroll (the “leviable amount”: salaries, wages, overtime, bonuses and most other remuneration). You pay it to SARS each month on your EMP201, together with PAYE and UIF.
Employers with an annual payroll of R500,000 or less are generally exempt. If you’re above that line, you pay, whether or not you train anyone.
Where the money goes
SARS passes the levy on to the Sector Education and Training Authority (SETA) for your industry, and to the National Skills Fund. Your SETA then uses its share to fund training through grants, and that is where your opportunity lies.
The mandatory grant: up to 20% back
Every levy-paying employer can claim a mandatory grant of up to 20% of the levies it paid. It isn’t automatic. To qualify, you need to:
- Be registered with your SETA and up to date with your levy payments.
- Appoint a Skills Development Facilitator (SDF), internal or external, registered with the SETA.
- Submit your Workplace Skills Plan (WSP) and Annual Training Report (ATR) on the SETA’s system by 30 April.
- Have the submission approved.
Once approved, SETAs usually pay the grant out in instalments during the year.
Quick example: a business with a payroll of R500,000 a month pays R5,000 a month in SDL, or R60,000 a year. The mandatory grant could be worth up to R12,000 a year. Work out your own figure with our calculator.
Discretionary grants: the bigger opportunity
On top of the mandatory grant, SETAs award discretionary grants for specific programmes such as learnerships, internships, apprenticeships, bursaries and skills programmes. These depend on the SETA’s priorities and funding windows, and they are competitive, but they can be worth far more than the mandatory grant. A submitted, approved WSP/ATR is usually a requirement for these too.
Why employers miss out
- Missing the 30 April deadline. Late submissions are normally not accepted, and that year’s mandatory grant is lost.
- No records. The ATR needs evidence of training that actually happened: who, what, when. If it was never captured, it can’t be reported.
- No SDF. Without a registered SDF, nobody can submit.
- Thinking it isn’t worth it. Even a modest grant, year after year, adds up, and the same records count towards your B-BBEE scorecard.
How to make it easy
The secret is to keep your training records as you go, not to scramble in April. Every course your team completes should be captured with names, dates and the type of training. Then the ATR practically writes itself, and next year’s WSP is based on real needs.
That is exactly what the ROI Consultants platform does: your team gets unlimited online courses, completions flow straight into your WSP & ATR records, and on our SDF Managed plans we act as your SDF and handle the submission for you. See how the plans work.
This article is general information, not legal or tax advice. Rules and deadlines can differ between SETAs and change over time, so confirm details with your SETA, SDF or B-BBEE verification agency.