Skills Development Levies and the submission of your Workplace Skills Plan (WSP) and Annual Training Report (ATR)

What is the purpose of this act of the Skills Development Levies Act (Act 9 of 1999)?

The availability of skilled employees is a serious obstacle to the competitiveness of South African companies.
The Legislature has created a way for companies to contribute towards the upliftment of every South African through a levy grant scheme. The levy grant scheme aims to ensure that employers train their employees.
The money that companies spend on training their employees are paid back to employers through a process which is referred to as the submission of a company’s Workplace Skills Plan (WSP) and Annual Training Report (ATR) to the relevant Seta that the company is registered with.
These WSP and ATR reports have to be submitted by the annual deadline which normally is the 30th of April each year

Who must pay towards the Skills Development Levy?

All employers whose annual payroll is more than R500,000 per year must be registered to pay Skills Development Levies (SDL).

Who must register to pay the Levy?

Employers who are liable to pay the Levy must register with SARS by completing a registration form (form SDL 101, obtainable from all SARS offices).
In order to register, the employer must obtain a registration form (SDL 101). Employers have to then elect the SETA (Sector Education and Training Authorities) that is most representative of the companies’ business activities. All Workplace Skills Plans must be submitted to the relevant industry Sector Education and Training Authority (SETA) by the deadline. Workplace Skills Plans must be submitted by 30 April 2020.

To whom are Levies payable?

Skills Development Levies are paid by companies to SARS. SARS fulfills the role of a collecting agency for the SETAs.
SARS will provide all registered employers with a “Return for remittance” form (an EMP 201) each month. The form enables companies to calculate the amount payable each month.

How is Skills Development Levy Calculated?

The amount payable is calculated as follows:
Employers have to pay 1% (one percent) of the total amount of remuneration paid to employees. SARS prescribes a list of exclusions that are excluded from “total remuneration”.
The following amounts are included in the calculation in the amount that is payable:
●overtime payments
●leave pay
●bonuses
●commissions
●lump sum payments

By when should a company pay a Skills Development Levy?

The levy must be paid over to SARS by no later than seven days after the end of each month. In the event that an employer fails to pay the Levy the company will be liable for interest at the “prescribed rate for Income Tax purposes for late payments”. A penalty of 10 percent will also be payable on the unpaid amount.

 

What does SARS do with the Skills Development Levy that is paid by employers?

The Levies are paid into a special fund. 80% of the Levies are distributed to the relevant SETA’s and the balance (20%) is paid into the National Skills Fund. The individual SETAs then pay levy-grants to qualifying employers, while the National Skills Fund will fund skills development projects not within the scope of SETAs.
Levy distribution is done as follows:

Do companies still have to pay SDL during the national lock down period?

Although the Government has not yet published a decision in this regard, it is reported that they are considering a temporary reduction of employer and employee contributions to the Skills Development Fund.

This will be applicable to all businesses, irrespective of whether their turnover is more or less than R50 million. This should provide some relief to employers amidst the Coronavirus pandemic but it will all be dependent on how much these contributions are reduced.

How does companies recover Skills Development Levies that are payable by means of grants?

At Chamlabour we assist companies with recovering the funds that they have spent on training their employees.

We have simplified the process and will ensure that the training information provided to us by companies are processed and submitted in such a way to ensure a maximum refund from the SETA’s.

Please contact us for a free quotation or inform us in the event that you have any further inquiries.