This is the act that sees to it that there will be money available to pay for the training of people as is stipulated by the Skills Development Act. This act makes training affordable.
SKILLS DEVELOPMENT LEVIES ACT (Act 9 0f 1999)
What is the purpose of this act?
The short supply of skilled staff is a serious obstacle to the competitiveness of industry in South Africa. The levy grant scheme aims to expand the knowledge and competencies of the labour force resulting in improvements in employability and productivity. This will be achieved through new approaches to planning for training, learning programmes, incentives and an improved employment service. If you participate fully in the scheme you will reap the benefits of a better skilled and more productive workforce.
Why pay towards this levy grant scheme?
The payment towards this levy grant scheme is legislated in terms of the Skills Development Levies Act. The intention is to stimulate skills development by enabling employers to reclaim some expenditure on skills development initiatives.
Who must pay the levy?
Every employer in South Africa who:
Is registered with SARS (South African Revenue Services) for PAYE or has an annual payroll in excess of R250 000.
Who must register?
Every employer who is liable to pay the levy must register for the payment of the levy with SARS by completing a registration form (form SDL 101 available from all SARS offices).
In order to register, you (the employer) must:
Obtain a registration form (SDL 101) from any SARS office, if not received by mail, choose from a list of registered Sector Education and Training Authorities (SETAs) as indicated in the SETA classification guide provided with the registration form, a (one) SETA most representative of your activities.
Is any employer exempt from the payment of the levy?
Yes. The exemptions are applicable if certain provisions are met. Application for such exemptions is contained in the SDL 101 form, issued by the Commissioner of SARS, who will ultimately adjudicate whether you qualify for exemption or not.
Where (to whom) are levies payable?
Levies are payable to the South African Revenue Service, which acts as a collecting agency for the Department of Labour and SETAs.
How are levies payable?
Each month SARS will provide all registered employers with a “Return for remittance” form (SDL 201), which enables you to calculate the amount payable and effect payment.
What amount is payable?
The amount payable will be calculated as follows:
1st year: 0,5% (half of a percent) of the total amount of remuneration paid to employees. Any prescribed exclusions that are not be levied are subtracted from the total remuneration.
2nd year and onwards: 1% (one percent) of the total amount of remuneration paid to employees. Any prescribed exclusions that cannot be levied are subtracted from the total remuneration.
By when is the levy payable?
The levy must be paid over to SARS (after registration), not later than SEVEN days after the end of the month in respect of which the levy is payable, under cover of a SDL 201 return form.
Is there any interest and penalties leviable on late/ non-payment of the levy?
Yes. Interest is payable at the PRESCRIBED RATE (Income Tax Purposes) on late payments. A penalty of 10 PERCENT will be levied on the unpaid amount.
What happens to the levies paid?
The levies paid to SARS will be deposited into a special fund from where 80% of it will be distributed to the relevant SETAs as indicated on the registration forms, and the balance (20%) will be paid into the National Skills Fund. SETAs will in turn pay levy-grants to qualifying employers, while the National Skills Fund will fund skills development projects not within the scope of SETAs.
What if I am training already?
The levy still has to be paid but you may be eligible for a grant.
Can I recover any of this levy payment by means of grants?
In the first year of the levy grant scheme you can recover in grants a minimum of 50% of the levy you paid on condition that you meet all the requirements for the different grants. The details of these requirements will be issued to you in April 2000 by your SETA.
The Levy Grant System was revised in 2005:
Levy-paying companies: up from R250 000 to R500 000
Discretionary Grant: up from 10% to 20%
Mandatory Grant: down from 60% o 50%
In total a company can still claim back 70%