A levy is a charge the law requires, usually earmarked for a particular purpose rather than going into general revenue. The L in SDL stands for levy: the Skills Development Levy funds skills training through the SETAs.
What it means
A levy differs from a tax mainly in that it is ring-fenced for a defined use. The Skills Development Levy is paid by the employer at 1% of remuneration and channelled to skills development, part of which an employer can claim back by submitting training plans. It is not deducted from the employee.
Where it fits in
The Skills Development Levy is declared on the EMP201 alongside PAYE and UIF and paid over with them. Because it is an employer charge, it adds to cost to company rather than reducing the employee's net pay, and an employer below the payroll threshold is exempt.
Key rules
- A compulsory, purpose-specific charge, distinct from a general tax.
- The Skills Development Levy is 1% of remuneration, paid by the employer.
- Declared and paid on the EMP201 with PAYE and UIF.
- Employers below the SDL payroll threshold are exempt.
