How Skills Development Levy (SDL) Is Calculated
17 Jun 2025
The Skills Development Levy (SDL) is a mandatory contribution by employers in South Africa, aimed at funding education and training initiatives to enhance workforce skills. It is governed by the Skills Development Levies Act No. 9 of 1999 and administered by the South African Revenue Service (SARS).
Who Needs to Pay SDL?
Employers must pay SDL if their total annual payroll exceeds R500,000. Certain entities, such as public service employers and registered public benefit organisations, may be exempt from paying the levy.
How is SDL Calculated?
SDL is calculated as 1% of the total remuneration paid to employees. The calculation follows these steps:
-
Determine Total Remuneration – This includes salaries, wages, overtime payments, bonuses, commissions, and other taxable earnings.
-
Exclude Non-Leviable Amounts – Certain payments, such as pension contributions and retirement allowances, are excluded from the SDL calculation.
- Apply the SDL Rate – Multiply the leviable amount by 1% to determine the SDL payable.
Payment and Compliance
Employers must submit SDL payments monthly via the EMP201 declaration to SARS. Payments are due within seven days after the end of the month in which the levy is payable. Late payments may incur penalties and interest charges.
Why SDL Matters
The SDL contributes to Sector Education and Training Authorities (SETAs), which use the funds to develop training programs, improve employment prospects, and support workforce development.
