Where is the SDL number and what is the skills development levy for? The SDL number is on a company’s tax clearance certificate.
The Skills Development Levy: The SDL Number
The Skills Development Levy (SDL) number is issued by the South African Revenue Service (SARS) when an employer registers for SDL. This number is unique to each employer and is used to identify and track the payment of SDL.
The importance of the SDL number lies in its role as a reference number for the payment of the levy. Employers are required to include their SDL number when submitting levy payments to SARS, as well as when submitting their annual reconciliation declarations. This ensures that the correct employer is credited with the payment of SDL and that the funds are allocated to the appropriate training and development initiatives via the SETAs.
Where is the SDL Number?
Employers can find their SDL number on their SARS registration certificate or by logging into their SARS eFiling account.
It is important to ensure that the SDL number is kept up to date and that any changes to the business or registration details are reported to SARS in a timely manner to avoid any delays or errors in the payment of SDL.
What is the Skills Development Levy (SDL)?
The SDL is a tax levied on employers in South Africa. This levy is used to fund training and development initiatives for employees. This levy is collected by the South African Revenue Service (SARS) and paid into the National Skills Fund, which is administered by the Department of Higher Education and Training (DHET).
For example, the ETDPSETA has planned its training and education interventions for 2023/4 around vacancies that are hard to fill. Stakeholders including interested youth can apply for these funded interventions.
SDL Purpose: The SDL Number
The purpose of the SDL is to promote learning and development in South Africa by using the funds to develop and improve employee skills.
The Skills Development Levy registration number (SDL) is listed almost in the middle of the tax clearance certificate and begins with an L.
The SDL is seen as a critical tool in addressing the skills gap and promoting economic growth and development in the country. By providing funding for skills development, the SDL aims to create a more skilled and productive workforce, which in turn can lead to improved productivity, competitiveness, and economic growth.
The SETAs are responsible for administering the funds collected through the SDL in their respective sectors. They use these funds to develop and implement training programs, bursaries, and other initiatives aimed at improving the skills of employees in their sectors. This includes providing training for new and existing employees, supporting learnerships and apprenticeships, and developing skills development frameworks to guide skills development efforts in each sector.
How much do employers pay to the Skills Development Levy?
1% of the Skills levy is paid to SARS.
SARS distributes 20% to the NSF and 80% to the SETA’s. The Sectoral Education and Training Authorities use 50% of this money for Mandatory Grants, 20% for Discretionary Grants to employers and 10% for Administration. Discretionary Grants are used for Learnerships and Bursaries.
Employers are required to pay the SDL on a monthly basis, based on the total amount of their employees’ remuneration.
- The current rate of the SDL is 1% of the total remuneration paid to employees, up to a maximum amount of R14,872 per year for each employee.
- This means that an employer with 10 employees who earn R10,000 each per month would be required to pay an SDL of R1,000 per month (1% of R100,000).
- The SDL is paid by employers when total salaries will exceed R500 000 over a 12-month period.
Why is the SDL important?
Employers paying the levy can apply for SETA funding to train and host unemployed youth, particularly those with disabilities. Employers offering learnerships can enjoy substantial benefits such as tax rebates and BEE points.
The SDL is an important mechanism for promoting economic growth and development in South Africa. By investing in the skills development of the workforce, employers are able to increase productivity, competitiveness, and innovation, while also improving the employability of workers. This, in turn, has a positive impact on the economy as a whole, creating more job opportunities, reducing unemployment, and boosting economic growth.
The SDL is also an important tool for addressing skills shortages and promoting social equity. By ensuring that all employers contribute to the development of the workforce, the SDL helps to create a more level playing field for all workers, regardless of their background or qualifications. This is particularly important in a country like South Africa, which has a history of social and economic inequality.
When is an employer liable to pay the SDL?
Where an employer expects that the total salaries will be more than R500 000 over the next 12 months, that employer becomes liable to pay SDL.
Who Does the SDL Exemption Apply to?
The following employers are exempt from paying SDL:
- Any public service employer in the national or provincial sphere of Government. (These employers must budget for an amount equal to the levies due for the training and education of their employees).
- Any national or provincial public entity, if 80% or more of its expenditure is paid directly or indirectly from funds voted by Parliament. (These employers must budget for an amount equal to the due for training and education of their employees).
- Any public benefit organisation (PBO), exempt from paying Income Tax in terms of Section 10(1) (cN) of the Income Tax Act No.58 of 1962, which only carries on certain educational, welfare, humanitarian, health care, religious, belief or philosophy public benefit activities or only provides funds to these PBO and to whom a letter of exemption has been issued by the Tax Exemption Unit (TEU).
- Any municipality to which a certificate of exemption is issued by the Minister of Higher Education and Training.
- And any employer whose total remuneration is subject to SDL (leviable amount) paid/due to all its employees over the next 12-month period won’t exceed R500 000. If this is the reason for exemption, these types of employers are not required to register to pay SDL.
In closing, the SDL aims to create a more skilled and productive workforce in South Africa, which is critical for economic growth and development.
By investing in skills development, the SDL aims to promote lifelong learning, support job creation, and ultimately improve the quality of life for all South Africans.
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