If you're a business owner in South Africa, it's essential to understand the Skills Development Levy (SDL) system and the grants available to you.
Who Must Pay the SDL?
According to the Skills Development Levies Act of 1999, employers in South Africa who are registered with SARS for PAYE and have an annual payroll in excess of R500,000 or more than 50 employees must register with SARS to pay the Skills Development Levy. If your business falls into this category, you’re required to declare the SDL, PAYE, UIF, and/or ETI amounts to SARS on a monthly basis.
How Much Is the SDL?
The SDL is calculated as 1% of the total amount of remuneration paid to employees, less any specific exclusions. As an employer, you’re responsible for paying the SDL to SARS on a monthly basis and submitting a Monthly Employer Declaration (EMP201) within seven days after the end of the month in which the amount was deducted.
What is a SETA?
A Sector Education and Training Authority (SETA) is a body set up under the Skills Development Act to develop a sector skills plan within the framework of the national skills development strategy (NSDS). SETAs provide funding for skills development initiatives, including learnerships, apprenticeships, internships, and more.
What is a Workplace Skills Plan (WSP)?
A Workplace Skills Plan is a strategic document that outlines how you will address the training and development needs of your employees.
What is an Annual Training Report (ATR)?
An Annual Training Report provides evidence to the SETA that you’ve conducted or are conducting training in line with the Workplace Skills Plan. It allows the SETA to compensate you for the money spent when implementing the Workplace Skills Plan for the training that you’ve funded for your staff.
What Grants are Available from a SETA?
If you’ve submitted a suitable Workplace Skills Plan and Annual Training Report to the appropriate SETA and met all the necessary requirements, you’re entitled to a mandatory grant of 20% of the SDLs you’ve paid for the relevant period. You may also apply for a discretionary grant if you’ve put in place a PIVOTAL Programme.
What is a PIVOTAL Programme?
A PIVOTAL Programme refers to professional, vocational, technical, and academic learning programs that result in qualifications or part qualifications registered on the National Qualifications Framework (NQF) and address critical and scarce skills needs. These programs may include apprenticeships, learnerships, skills programs, and more.
Is WSP submission compulsory to submit?
It is only compulsory if you are an employer with 50 or more employees.
Considerations in terms of Cost Benefit
While the grants available from SETAs can provide valuable funding for skills development initiatives, it's important for businesses to weigh the costs and benefits of the submission process. For companies with smaller payrolls, the administrative burden of submitting a Workplace Skills Plan and Annual Training Report may outweigh the potential grant funding. It's important to carefully consider the total annual SDL payments and the potential grant funding to determine if the submission process is worthwhile. Additionally, businesses should consider the long-term benefits of investing in their employees' skills and knowledge, as well as the potential competitive advantage gained from a highly skilled workforce.
Conclusion
By understanding SDL and the grants available, businesses can invest in their employees' development, improve their skills and knowledge, and gain a competitive edge. For more information, businesses can visit the relevant website of their relevant Sector Education and Training Authority (SETA).
SETAs in South Africa
Agricultural Sector Education and Training Authority (AgriSETA)
Banking Sector Education and Training Authority (BANKSETA)
Chemical Industries Education and Training Authority (CHIETA)
Construction Education and Training Authority (CETA)
Culture, Arts, Tourism, Hospitality and Sport Sector Education and Training Authority (CATHSSETA)
Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA)
Energy and Water Sector Education and Training Authority (EWSETA)
Fibre Processing and Manufacturing Sector Education and Training Authority (FP&M SETA)
Finance and Accounting Services Sector Education and Training Authority (Fasset)
Food and Beverage Manufacturing Industry Sector Education and Training Authority (FoodBev SETA)
Health and Welfare Sector Education and Training Authority (HWSETA)
Insurance Sector Education and Training Authority (Inseta)
Local Government Sector Education and Training Authority (LGSETA)
Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA)
Media, Information and Communication Technologies Sector Education and Training Authority (MICT SETA)
Mining Qualifications Authority (MQA)
Public Service Sector Education and Training Authority (PSETA)
Safety and Security Sector Education and Training Authority (SASSETA)
Services Sector Education and Training Authority (SSETA)
Transport Education Training Authority (TETA)
Wholesale and Retail Sector Education and Training Authority (W&RSETA)