Monthly SDL
RÂ 2Â 500,00
Annual SDL
RÂ 30Â 000,00
SDL Per Employee (Avg)
RÂ 250,00
SDL is governed by the Skills Development Levies Act. Employers with an annual payroll above R500,000 must pay 1% of total remuneration to SARS monthly.
80% of SDL goes to the relevant SETA, and 20% goes to the National Skills Fund. Employers can claim back up to 20% as a mandatory grant by submitting their WSP and ATR to their SETA.
SDL is an employer cost and is not deducted from employee salaries. It is calculated on the same leviable amount as UIF.
What is SDL in South Africa?
The Skills Development Levy (SDL) is a compulsory levy paid by employers to fund education and training. It is 1% of the total payroll (leviable amount) and is paid by the employer, not deducted from employee salaries.
Who must pay SDL?
All employers with an annual payroll exceeding R500,000 must register and pay SDL. Employers with payroll below R500,000 are exempt.
How is SDL calculated?
SDL = 1% of total leviable amount (gross salaries, bonuses, commissions, overtime, and other remuneration for all employees). It is paid monthly to SARS.
Can employers claim SDL back?
Employers registered with a Sector Education and Training Authority (SETA) can claim back up to 20% as a mandatory grant by submitting a Workplace Skills Plan (WSP) and Annual Training Report (ATR).
How SDL works, who pays it, and how businesses can claim training grants
What is the Skills Development Levy (SDL)?
SDL is a compulsory levy paid by employers to fund skills training in South Africa. It is calculated at 1% of the total payroll (all employee salaries, wages, bonuses, and commissions). An employer with a monthly payroll of R500,000 pays R5,000 in SDL per month. The levy goes to SARS, which distributes it to SETAs (Sector Education and Training Authorities).
Which employers must pay SDL?
All employers with an annual payroll above R500,000 must register for and pay SDL. Employers with payroll below R500,000 are exempt. Certain organisations are also exempt: national and provincial government departments, public entities listed in Schedule 1 or 2 of the Public Finance Management Act, and religious or charitable organisations that do not trade.
How is SDL calculated?
SDL is 1% of total leviable amounts, which includes gross salaries, wages, overtime pay, bonuses, commissions, and the taxable portion of fringe benefits. If your payroll totals R800,000 per month, your SDL payment is R8,000. SDL is paid monthly together with PAYE and UIF through the EMP201 return filed with SARS.
Can I claim SDL back through training grants?
Yes. Employers registered with a SETA can claim back up to 20% of their SDL through mandatory grants (by submitting a Workplace Skills Plan and Annual Training Report). Discretionary grants can provide additional funding for specific training projects. To claim the mandatory grant, you must submit your WSP and ATR to your SETA by 30 April each year.
What is a SETA and which one do I belong to?
SETAs are Sector Education and Training Authorities that manage skills development in specific industries. There are 21 SETAs covering all sectors. Examples: BANKSETA (banking), MERSETA (manufacturing), MICT SETA (media and IT), W&R SETA (wholesale and retail). Your SETA is determined by your main business activity as registered with SARS.
Does SDL affect my employees' pay?
No. SDL is paid entirely by the employer — it is not deducted from employees' salaries. It is an additional cost on top of salaries. For every R100 you pay an employee, you effectively spend R101 on SDL (plus R1 for employer UIF). Some employers show SDL on payslips for transparency, but it does not reduce take-home pay.
What happens if I do not pay SDL?
Late or non-payment of SDL results in a 10% penalty on the outstanding amount, plus interest at the prescribed rate. SARS can also issue a notice of assessment and pursue collection through its normal enforcement channels. Additionally, non-compliant employers cannot access SETA training grants or claim learnership tax allowances.
Can I claim a tax deduction for training expenses?
Yes. Training costs for employees are tax-deductible as business expenses under section 11(a). Additionally, section 12H provides learnership allowances — R40,000 per learner per year for NQF level 1-6 qualifications, or R20,000 for learners with disabilities. Completion bonuses of the same amount apply when a learner finishes. These allowances are separate from SETA grants.
SARS-Aligned: Based on 2025 SARS rates and thresholds. For personal advice, speak to a qualified tax practitioner.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms
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