Monthly SDL payable by an employer at 1% of payroll, with the small-employer exemption.
Monthly SDL
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Annual SDL
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Exemption threshold
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A levy on payroll, not on profit
The Skills Development Levy is one of those payroll costs that catches new employers off guard, because it is not deducted from anyone's salary. The employer pays it on top of wages, at 1 percent of total payroll every month, and it goes to SARS alongside PAYE and UIF on the monthly EMP201 return. The money funds the Sector Education and Training Authorities, the bodies that channel grants back into workplace training. This calculator takes your annual payroll, checks whether you cross the threshold to pay at all, and shows the monthly and annual levy.
The small-employer exemption
Not every business pays. The rule this calculator applies, in line with SARS practice, exempts employers whose total annual payroll is R500,000 or less. Below that line you neither register for SDL nor pay it. Cross it and the full 1 percent applies to your whole payroll, not just the part above R500,000, so the threshold is a cliff rather than a gradual ramp. Confirm the 1 percent rate and the R500,000 exemption with SARS before relying on them, as these are the figures the tool assumes. Note too that the levy base is broadly your PAYE-able remuneration, with some items such as certain retirement lump sums excluded.
Working out the levy on a R1.2 million payroll
Take an employer with an annual payroll of R1,200,000, comfortably above the exemption. Using the rate this calculator applies, the levy is 1 percent of R1,200,000, which is R12,000 a year, or R1,000 a month. That R1,000 is paid every month with the rest of the payroll taxes, regardless of whether the business is profitable.
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The chart shows the levy as a thin sliver on top of payroll, and the cliff at R500,000 where it switches on.
Getting the money back through training
The levy is easier to swallow once you realise a large part of it is reclaimable. Registered employers can apply to their SETA for a mandatory grant, often around 20 percent of the levies paid, by submitting a workplace skills plan and an annual training report. Further discretionary grants fund learnerships and bursaries. An employer who runs structured training can recover a meaningful share of what they paid, so SDL is better thought of as a forced training budget than a pure tax. The common mistake is paying the levy every month and never filing the paperwork to claim any of it back.
Is the Skills Development Levy deducted from employee pay?
No. Unlike PAYE and the employee's share of UIF, SDL is purely an employer cost. It is never taken off a worker's salary. The employer calculates 1 percent of total payroll and pays it over with the monthly return, so it adds to the true cost of employing staff rather than reducing anyone's take-home pay.
What happens if my payroll crosses R500,000 mid-year?
SDL liability is based on whether your total remuneration for the year is expected to exceed R500,000. If you start the year below and your payroll grows past that point, you become liable and should register for SDL with SARS. In practice many growing employers register once they can see annual payroll heading above the threshold, to avoid backdated levies and penalties on the months they should have been paying.