Statutory topics
Skills Development Levy (SDL)
SDL is an employer-borne levy that funds skills development through the SETAs. It is not deducted from employees — it is a cost of employment, calculated on payroll and declared monthly with PAYE and UIF.
Which employers are liable
Liability depends on the employer's total annual payroll. Employers whose remuneration bill exceeds the prescribed threshold must register for SDL and pay the levy; smaller employers below the threshold are exempt, as are certain public entities and qualifying religious or charitable organisations.
How SDL is calculated
SDL is a percentage of the total remuneration paid to employees for the month, with defined exclusions. Because the base differs slightly from the PAYE base, it must be configured separately in payroll rather than assumed to be the same figure.
Declaring and paying SDL
SDL is declared on the monthly EMP201 and paid with PAYE and UIF, then reconciled on the EMP501 for each declaration period.
Getting value back through the SETAs
- A portion of the levy is available to employers as a mandatory grant when a Workplace Skills Plan and Annual Training Report are submitted on time
- Discretionary grants fund learnerships, apprenticeships and bursaries
- Skills spend and demographics also affect B-BBEE scorecard outcomes
- Late or missing submissions forfeit the grant even though the levy was still paid
Frequently asked questions
What is the Skills Development Levy?
SDL is a levy on an employer's payroll that funds national skills development through the SETAs. It is payable by the employer and may not be deducted from employees.
Which employers are exempt from SDL?
Employers whose total annual remuneration bill falls below the prescribed threshold, together with certain public and qualifying non-profit entities, are exempt. Exemption status should be reviewed annually as payroll grows.
Is SDL deducted from employees' salaries?
No. SDL is an employer cost. Deducting it from employees would be an unlawful deduction under the BCEA.
Can SDL be recovered?
Partly. Employers that submit a Workplace Skills Plan and Annual Training Report to their SETA by the deadline can claim mandatory grants, and may apply for discretionary grants for approved training programmes.
Patuza confirms your SDL liability, calculates the levy on the correct base and keeps declarations aligned to your payroll.
Book a consultationRelated services
- Payroll compliance →
PAYE, UIF, SDL, EMP201, EMP501 and IRP5 compliance managed end to end for SARS.
- Payroll & GL reconciliation →
Payroll reconciled to the general ledger: salary expense, control accounts and payroll liabilities.
- Payroll reporting →
Cost, variance, management and reconciliation reporting from every payroll cycle.
Related topics
- PAYE →
Pay-As-You-Earn: how employees' tax is calculated, withheld, declared and paid to SARS.
- UIF →
Unemployment Insurance Fund contributions, declarations and employer obligations.
- EMP201 →
The monthly employer declaration for PAYE, UIF and SDL, and how to get it right.
- Employer cost →
The true cost of employment: contributions, statutory levies and cost beyond the salary line.
Related insights
- SDL and SETA grants →
How to recover part of the Skills Development Levy through mandatory and discretionary grants.
- Payroll compliance calendar →
EMP201, EMP501 and statutory deadlines.
Last reviewed 2026-03-01. Rates, thresholds and limits are set by legislation and change — most commonly in the annual Budget. This page explains how the obligation works; always confirm current values against the official SARS or Department of Employment and Labour publication for the applicable tax year.