SDLA
Skills Development Levies Act, 1999 (Act No. 9 of 1999)
One per cent of your payroll to SARS, by the seventh of every month, whether or not you ever run a day of training or claim a cent of it back.
Sections
11
Duties
18
Questions
33
Assessment from
R 17 400
What it covers
The Skills Development Levies Act does one thing: it takes one per cent of what you pay your people and gives it to the skills system. Section 3(1) imposes the levy on every employer. Section 6(1) makes it due within seven days after the end of each month. Section 5(1) requires you to register for it with SARS and to name the SETA you belong to. That is nearly the whole of the employer's exposure, and it is a monthly exposure rather than an annual one. The commonest and most expensive misunderstanding is that the levy buys something. It does not. An employer that has never submitted a workplace skills plan, has no skills development facilitator, has never claimed a mandatory or discretionary grant and could not name its SETA still owes the full one per cent for every month its payroll clears the threshold. Section 3(1) conditions the levy on nothing at all. The grants are the Skills Development Act's business, and forgoing them does not reduce what you owe by a rand. The second most expensive misunderstanding is what the one per cent is charged on. Section 3(3) does not say gross salaries and it does not say taxable pay. It says the total remuneration paid or payable, or deemed to be paid or payable, as determined under the Fourth Schedule to the Income Tax Act, and then it adds the words that catch people: whether or not the employer is liable to deduct employees' tax on it. So remuneration paid to somebody who earns too little to pay PAYE is still in the leviable amount. Directors' fees, commission, overtime, bonuses, leave pay and amounts paid to labour brokers and personal service providers are in it on the same footing. Section 3(4) then takes four specific things out, and nothing else comes out. One threshold decides whether any of this applies. Under s 4(b) the levy is not payable where, during any month, there are reasonable grounds for believing that remuneration over the following 12 months will not exceed R500 000. That test is forward looking and it is monthly, which means a growing business can fall into the levy in the middle of a year without anything happening on a form, and the month it crosses is the month it has to act. Getting it wrong is mechanical and automatic. Interest runs on an unpaid levy under Chapter 12 of the Tax Administration Act by force of s 11(1), without anybody deciding to charge it, and under s 12(1) the Commissioner must impose a penalty of 10 per cent of the unpaid amount. SARS can estimate what you owe if you do not file. None of that requires an inspection or a finding of fault. This assessment covers the employer's duties: who pays, on what, who is exempt, registering with SARS and with a SETA, paying by the seventh, the returns, the dormant SETA collection route, interest, the penalty, recovery, refunds of a levy that was never payable, and co-operating with an inspector. It does not cover the National Skills Fund's allocations, the Director-General's or a SETA's distribution of the money, or the Minister's regulations, because no business can act on any of those.
Does this apply to you?
This applies to you if you employ anybody in South Africa and your payroll is big enough. The test is in s 4(b) and it is the only one that matters for a commercial business: if, during any month, there are reasonable grounds for believing that the total remuneration you will pay all your employees over the FOLLOWING 12 months will not exceed R500 000, the levy is not payable. Above that, it is.
Read the direction of that test carefully. It looks forward, not back. A business that paid R400 000 last year but has just signed a contract and hired four people has to ask what the next 12 months look like, not what the last 12 looked like. And it is tested every month, so the answer can change mid year without any form falling due.
R500 000 a year is about R41 667 a month across everybody you pay. Three people on R14 000 clears it. It is a low bar and most businesses with staff are over it.
It applies per employer registered with SARS, not per group. Three trading entities under one holding company are three registrations, three monthly returns and three threshold tests, and a dormant subsidiary that still pays two salaries is one of them.
Who counts as your employee is decided by the Fourth Schedule to the Income Tax Act, which s 1 of this Act adopts. That reaches wider than your payroll register: a labour broker, a personal service provider and a director on a contract of employment are all in it, and so is somebody who earns too little to pay any PAYE. Section 3(3) says the leviable amount is determined under that Schedule whether or not you have to withhold employees' tax.
Some employers are exempt by what they are rather than by size, under s 4(a), (c), (d) and (e): a national or provincial public service employer, a qualifying public benefit organisation, a national or provincial public entity funded 80 per cent or more by Parliament, and a municipality holding a Ministerial exemption certificate. If you think you are one of those, read s 4 itself. Note also s 5(6): those four still have to register, even though they do not pay. An employer exempt only on the R500 000 test is not in that list and does not have to register for the levy, though it may well still have to register for PAYE.
Nothing here depends on whether you train anybody, belong to an active SETA, or ever claim a grant.
Where this text comes from
Transcribed 2026-10-20. Check the provision against the source before relying on it in a filing.
What non-compliance costs
The consequences are percentages and interest rather than fines, they attach automatically, and they are collected by SARS with the full tax recovery machinery behind them.
LATE OR SHORT PAYMENT. Interest on the outstanding amount, in accordance with Chapter 12 of the Tax Administration Act, 2011, by force of s 11(1). Nobody has to decide to charge it. Plus, under s 12(1), a penalty of 10 per cent of the unpaid amount, which the Commissioner MUST impose under Chapter 15 of that Act. The Commissioner, or a SETA's executive officer where the SETA is the collector, may remit the penalty or part of it under s 12(2), but only in accordance with Chapter 15, so remission is an application on stated grounds and not a negotiation.
NOT FILING A RETURN. Two consequences. The Commissioner may refuse to authorise a refund of levy you overpaid until you file, under s 6(6). And because s 2(2) and s 2(2A) put the administration of the levy under the Tax Administration Act, SARS can raise an estimated assessment under Chapter 8 of that Act on the information it has, which you then have to pay and dispute rather than ignore. SARS's own employer guide confirms both, and adds that where an employer fails to pay with intent to evade the obligation it may face a penalty of up to twice the amount of the levy due.
NOT REGISTERING. Registration failures are no longer an offence under this Act: s 20, which created the offences, was repealed by s 271 of the Tax Administration Act, 2011. They are dealt with under Chapters 15 to 17 of that Act instead, where a failure to apply for registration as an employer is a listed non compliance. An unregistered employer also does not stop owing the levy for the months it was unregistered, which is the part that compounds.
UNDERSTATING THE LEVIABLE AMOUNT. The difference is still due, with interest under s 11 and the 10 per cent penalty under s 12 on the unpaid part, and understatement penalties under the Tax Administration Act may follow on top.
WHERE A SETA IS THE COLLECTOR. Under s 14(2) the SETA's executive officer may estimate the levy and issue an assessment where no statement was submitted or where the one submitted understates it, and under s 14(3) the SETA may recover the outstanding amount, interest and penalty by action in the magistrate's court for the area where the employer carries on business, despite any law to the contrary.
OBSTRUCTING AN INSPECTOR. Under s 18 a person questioned by an inspector must answer truthfully and an employer must give the inspector the facilities and assistance reasonably required at its premises. An inspector has the powers of a SARS official under Chapter 5 of the Tax Administration Act, by s 15(3).
What the assessment covers
The assessment works through 33 questions across 18 duties, scored out of 233. Each answer generates the specific actions needed to close or prove that duty, and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on SDLA
Run the assessment, get your score, and get the exact list of what to fix, with the evidence trail an auditor will ask for.