Finance

Finance Overview

In order for an education and training provider to be accredited by a SETA ETQA, it is necessary to determine whether or not the provider offers programmes that fall within primary focus of the SETA ETQA. The ETQA Regulations state that an ETQA must have “a primary focus for its quality assurance activities based on its association with identified sector and the identified mission of the sector” This primary focus determine what learning the ETQA will quality assure and monitor. This section provides you with critical information on what the scope of the LGSETA and then details the primary focus of the LGSETA ETQA. The primary focus determin which education and training providers should apply for accreditation at this SETA.


What employers need to know about the Skills Development Levy

These questions and answers provide information about employers’ obligations in terms of the Skills Development Act, 1998, and the Skills Development Levies Act, 1999; and explain what the levy grant system is all about.


What is the purpose of this scheme?

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.


What is a SETA?

SETA stands for Sector Education and Training Authority. Up to 27 SETAs are to be established during March 2000 and will cover all sectors in South Africa, including government. The members of a SETA include employers, trade unions, government departments and bargaining councils where relevant, from each industrial sector.


How do I know which SETA applies to me as an employer?

SARS will provide you in January 2000 with a list of proposed SETAs and their scope of coverage. You will be required to make a choice from the list of SETAs of the SETA that is most representative of your core business.


How will I know what to do in order to comply with the requirements?

Your SETA, once established, will send you all the information on the scheme including the requirements and timetable for action by you. You will be supplied with contact details of employees of the SETA who are available to help you maximise the benefits of the scheme.


What if I do not hear from the SETA?

If you have not heard anything by 1 October 2000 contact the Executive Officer: National Skills Authority (NSA) at the Department of Labour, Laboria House, 215 Schoeman Street, Pretoria (Private Bag X117, Pretoria, 0001).


Is any employer exempt from the payment of the levy?

Yes. The exemptions are applicable if certain provisions are met. Application for such exemptions are 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 (1 April 2000 -- 31 March 2001): 0,5% (half of a percent) of the total amount of remuneration paid to employees. Any prescribed exclusions that are not leviable 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 are not leviable 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. The first levy amount is therefore payable on or before 7 May 2000.


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.


Where can I obtain further information on my obligations as an employer regarding levy payments in terms of the Skills Development Levies Act?

The Department of Labour and the SARS have drafted a SDL 10 guideline containing comprehensive details in this regard. This guide will be forwarded to all registered employers.


Who do I contact if I have questions about the collection of the levy in terms of the Skills Development Levies Act?

Any SARS office, Department of Labour Head Office and Provincial Offices.​