Does your business have an annual payroll of above R 500 000? If so, then every month, 1% of your payroll expenditure goes to SARS in the form of a tax called the Skills Development Levy (SDL).
The SDL is a tax on employers in South Africa, that funds employee training and development programs. The levy is intended to help employers improve the skills of their workforce, which can lead to increased productivity and competitiveness.
How do you claim back a part of this SDL from SARS?
Claims are made through either a Mandatory or a Discretionary Grant.
The Mandatory Grant is a relatively direct process whereby a business can claim back up to 20% of their SDL by being up to date with SDL payments, providing professional training to their employees and submitting their Workplace Skills Plan (WSP) and Annual Training Report (ATR).
The WSP must outline the employer’s skills development strategy for the coming year, including the specific training goals they aim to achieve. The ATR must document all training activities that took place in the previous year, including the number of employees who participated, the type of training they received, and the training outcomes.
The Discretionary Grant is a more complicated process whereby a business is reimbursed for implementing accredited training, leading to a formal qualification, i.e. Learnerships, Internships, Apprenticeships and Bursaries.
Employers can apply for a Discretionary Grant to claim back some of their SDL payments. The grant is available to employers who meet specific requirements, including:
– Providing training in priority, scarce, or critical skills.
– Cooperating with the relevant Sector Education and Training Authority (SETA).
– Demonstrating a commitment to skills development.
The grant amount will vary depending on the specific project or initiative, but it can be up to 40% of the total skills development levy paid. Applications for Discretionary Grants are typically due in the first quarter of each year.
Employers can turn to a Skills Development Facilitator if they need help reclaiming their levy. These experts offer guidance and ensure accurate procedures. The facilitator can help employers to:
– Develop a WSP.
– Identify and select appropriate training providers.
– Track the progress of training activities.
– Compile and submit reports to the relevant SETA.
Collaborating with a Skills Development Facilitator can be incredibly beneficial for employers seeking to reclaim their skills development levy. A facilitator can help determine the eligibility requirements for mandatory and discretionary grants, improving the chances of a successful claim.
SEESA offers a full range of Skills Development & Training solutions that takes care of this entire process on your behalf.