SDL (Skills Development Levy)

“What is SDL?”

SDL stands for the Skills Development Levy.

It’s a small monthly tax that employers pay to SARS. It’s used to fund education, training, and skills development programmes across South Africa.

The goal is to help upskill the workforce and improve employment opportunities nationwide.

“How much is SDL?”

The levy is calculated at 1% of your total monthly payroll.This includes:

  • Salaries and wages
  • Bonuses
  • Overtime
  • Leave pay
  • Any other regular remuneration

So, for example, if your total payroll for the month is R60,000, your SDL payment would be R600.

“Who needs to pay SDL?”

You must register and pay SDL if:

  • Your total annual payroll is more than R500,000
  • You’re registered for PAYE with SARS
  • You have one or more employees

Smaller businesses with payroll under R500,000 per year are exempt, but as your business grows, SDL may become a requirement.

“How is SDL paid and reported?”

SDL is submitted to SARS as part of your monthly EMP201 return, along with:

  • PAYE (Pay-As-You-Earn)
  • UIF (Unemployment Insurance Fund)

All three are calculated, reported, and paid together, making payroll compliance simpler (if you're keeping on top of it!).

“What is SDL used for?”

The money collected through SDL is used to:

  • Fund Sector Education and Training Authorities (SETAs)
  • Support skills programmes, internships, and learnerships
  • Improve workforce education and job readiness in South Africa

You may even be able to claim back some of your SDL contributions if you provide formal training or participate in approved SETA programmes.

“What happens if I don’t register or pay SDL (when required)?”

  • You may face penalties and interest from SARS
  • Your company may be marked as non-compliant
  • You could lose out on training grants or funding opportunities linked to SETAs
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