The Skills Development Levy is 1% of your total payroll, paid monthly on the EMP201 by the 7th. You must register once the total remuneration you expect to pay all employees over the next 12 months exceeds R500,000. It is an employer cost — you cannot deduct it from employees. Registered employers can claim a mandatory grant of 20% of what they paid back from their SETA, but only by submitting a workplace skills plan by the deadline.
Most small employers pay it and claim nothing back. The grant is not automatic and the deadline is not flexible.
Who has to pay it
You must register for SDL if the total remuneration payable to all your employees over the next 12 months exceeds R500,000.
Two things about that threshold that catch people out:
It is total payroll, not per employee. Four employees on R11,000 a month is R528,000 a year. That is over the threshold.
It includes directors. Remuneration paid to directors of a private company counts towards the R500,000 and towards the levy itself. A single-director company paying the director a R45,000 monthly salary is over the threshold on that alone.
Who is exempt
Employers whose total remuneration over the next 12 months will not exceed R500,000
The national and provincial spheres of government, and public entities meeting the prescribed funding conditions
Certain public benefit organisations carrying on approved welfare, humanitarian, health care, religious or similar activities
Municipalities holding a certificate of exemption
If you are exempt, you still register as an employer for PAYE and UIF where those apply — SDL exemption is separate.
How it is calculated
SDL = 1% of the leviable amount.
The leviable amount is broadly the remuneration on which PAYE is determined, with certain exclusions. In practice, for most small employers it is close to your gross payroll.
A worked example — three employees and a director:
| Monthly | Annual | |
|---|---|---|
| Director salary | R45,000 | R540,000 |
| Employee 1 | R18,000 | R216,000 |
| Employee 2 | R14,500 | R174,000 |
| Employee 3 | R9,500 | R114,000 |
| Total payroll | R87,000 | R1,044,000 |
| SDL at 1% | R870 | R10,440 |
R870 a month. Payable by the employer, on top of the salaries and on top of the 1% employer UIF contribution.
Note it is not deducted from employees. UIF is split — 1% from the employee, 1% from the employer. SDL is entirely the employer's cost. Deducting it from a salary is unlawful.
How and when you pay it
On the EMP201, together with PAYE and UIF, by the 7th of the following month — or the last business day before the 7th where it falls on a weekend or public holiday.
It is reconciled on the EMP501 at each interim and annual reconciliation, alongside PAYE and UIF.
Late payment attracts a penalty and interest, on the same basis as late PAYE. There is no separate SDL filing — it is a line on the return you are already submitting.
Claiming it back: the part most employers miss
SDL is not purely a cost. 20% of what you pay is claimable back as a mandatory grant from your SETA.
In the example above, R10,440 a year in levies means R2,088 recoverable. Not transformative, but it is your money and the process is administrative rather than difficult.
What you have to do
1. Know your SETA. Your levy is allocated to a Sector Education and Training Authority based on the industry code (SIC code) you registered under. Bookkeeping firms, construction companies and retailers all sit with different SETAs.
2. Appoint a Skills Development Facilitator. For a small employer this can be an existing staff member. They are the person the SETA deals with.
3. Submit a Workplace Skills Plan and Annual Training Report to your SETA. The WSP sets out planned training for the coming year; the ATR reports what was actually done in the past year.
4. Meet the deadline — 30 April. This is the standard SETA submission deadline for the mandatory grant. Miss it and you forfeit the grant for that year entirely. There is no late submission.
5. Be levy-compliant. SETAs will not pay a grant to an employer whose SDL account is in arrears.
Discretionary grants
Beyond the mandatory 20%, SETAs run discretionary grants funded from the remainder of the levy pool — learnerships, apprenticeships, bursaries and internships. These are competitive, application-based and can be worth considerably more than the mandatory grant.
The overlap worth noting: if you are already taking on learners, you may simultaneously qualify for the Section 12H learnership allowance and the Employment Tax Incentive. Learner training is one of the few areas where three separate incentives stack.
Where SDL causes problems
Crossing R500,000 without registering. Growth is gradual, the threshold is not. A business that adds two staff mid-year can cross it without anyone recalculating. Late registration means back-levies plus penalties and interest.
Assuming a one-person company is exempt. A director on a R45,000 monthly salary is already over the threshold. The exemption is about the size of the payroll, not the number of people.
Registering but never claiming. The most common outcome. Employers pay the levy for years, have never heard of their SETA, and forfeit the grant annually.
Getting the SIC code wrong at registration, which allocates you to the wrong SETA and makes the grant process harder than it needs to be.
Falling below the threshold and continuing to pay. If your payroll drops materially, review whether the registration should be deregistered — but note the test is forward-looking over the next 12 months, so a temporary dip is not the same thing.
Frequently asked questions
What is SDL in South Africa? The Skills Development Levy — 1% of your total payroll, paid monthly by employers on the EMP201 alongside PAYE and UIF. It funds the national skills development system through the Sector Education and Training Authorities.
When must a business register for SDL? When the total remuneration payable to all employees over the next 12 months exceeds R500,000. The threshold applies to total payroll, not per employee, and includes remuneration paid to directors of a private company.
Who is exempt from paying SDL? Employers whose total remuneration over the next 12 months will not exceed R500,000, the national and provincial spheres of government and qualifying public entities, certain approved public benefit organisations, and municipalities holding an exemption certificate.
How much is the Skills Development Levy? 1% of the leviable amount, which is broadly the remuneration on which PAYE is determined. On a R1,044,000 annual payroll the levy is R10,440 a year, or R870 a month.
Can I deduct SDL from my employees' salaries? No. SDL is entirely an employer cost, unlike UIF which is split between employer and employee. Deducting it from an employee's salary is unlawful.
How do I claim SDL back? Register with your SETA, appoint a Skills Development Facilitator, and submit a Workplace Skills Plan and Annual Training Report by 30 April each year. Compliant employers can claim a mandatory grant of 20% of the levies paid.
What happens if I miss the SETA submission deadline? You forfeit the mandatory grant for that year. The 30 April deadline is not extended and there is no late submission process for the mandatory grant.
When is SDL due? By the 7th of the month following the payroll month, on the EMP201, or the last business day before the 7th where it falls on a weekend or public holiday. Late payment attracts penalties and interest.
Pay it correctly, then claim it back
The levy itself is a small monthly line. The bigger issue is the R2,000 or R10,000 a year sitting with a SETA that most small employers have never contacted.
Smartbook runs payroll, files the EMP201 and EMP501, and flags when your payroll is about to cross the SDL threshold — so registration happens on time rather than retrospectively with penalties.
Last reviewed: 27 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. SETA grant processes and deadlines vary by SETA — confirm requirements with the SETA you are allocated to. General guidance, not advice on your circumstances.
Primary sources: SARS — Skills Development Levy · Skills Development Levies Act 9 of 1999 · Department of Higher Education and Training