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Skills Development Levy Refund

Did you know that South African registered businesses can get a portion of their Skills Development Levy (SDL) back each year? Charmaine Pratt explains how.

What is Skills Development Levy (SDL)?
SDL is a levy imposed by the South African Revenue Services (SARS) to encourage learning and development and is determined by an employer’s salary bill. Every month, employers handover 1% of total salaries to SARS along with PAYE.

Who pays Skills Development Levy contributions?
An employer whose total salary bill will exceed R500 000 over the next 12 months, becomes liable to pay SDL.

If you pay SDL there are various ways in which you can claim this money back. If you don’t claim annually you lose it and the ability to reduce your overall training spend.

The Mandatory Grant claim allows you to claim back up to 20% of this levy from your industry SETA (CATHSSETA for the Tourism Industry) by meeting all the SETA requirements. Some of these requirement include submitting a workplace skills plan (WSP) and an Annual Training Report (ART). These are often daunting and companies generally get the help of a consultant but you will need to weigh up the cost of the consultant versus the potential claim before you proceed.

Employers can also apply for a discretionary grant which are funds that your SETA will give to you “at their discretion”. At present 80% of the SETA discretionary funds will be used for Pivotal training. Pivotal stands for professional, vocational, technical and academic learning programmes that lead to a qualification on the National Qualifications Framework. So you can use this to upskill your team and even as a benefit to attract better staff.

Other discretionary funding available is bursaries and internships. SETA’s will support learners who have been accepted to study at any South African Public Institution by offering learners bursaries to further their studies.

The bursary grant can be used to pay study fees, textbooks, accommodation, meals and other related costs depending on the funding policy of the SETA.

Internships are structured work based programmes designed to give unemployed graduates exposure to work experience. Many SETA’s offer internships based on set criteria. Monthly stipend payments are funded through the SETA for the duration of the internship programme.

Most companies don’t even know that this comes off their payroll and is paid to SARS let alone that they can structure their training programs to claim back the maximum benefit.

Should you need assistance with assessing your ability to claim for SDL grants, contact Charmaine Pratt at Sprout Consulting via email to charmaine@sproutconsulting.co.za.

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