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Skills Development Levies Act and Discretionary Grants

Skills Development Levies Act regulates a compulsory levy scheme to fund education and training in businesses within various sectors in South Africa. It aims to expand the knowledge and competencies of the labour force and in so doing increase the supply of skilled labour in South Africa, providing for greater productivity and employability.

If the company has staff registered for PAYE and the annual payroll exceeds R500 000 per annum, the company must register with SARS and pay a skills levy of 1% of the monthly payroll. If the company does not fall within these criteria, it does not have to pay levies or register with SARS.

The following amounts are not subject to the payment of the levy:

• Remuneration payable to a labour broker if an exemption certificate in respect of PAYE has been issued to such labour broker;
• Pension, superannuation and retirement fund receipts;
• Lump sum payments in respect of retirement;
• Lump sum payments in respect of loss or termination of employment or office;
• Deemed remuneration (needs a definition) amounts in respect of directors of private companies. However, the levy is payable on the final actual remuneration paid to a director during the year;
• Remuneration payable to a learner in terms of a contract of employment contemplated in terms of Section 18(3) of the Skills Development Act.

The following employers are exempt from paying the levy:

• A public service employer (i.e. national or provincial government);
• Any employer where there are reasonable grounds for believing that the total amount of remuneration payable to all its employees during the following twelve month period will not exceed R500 000;
• Certain public benefit organisations which are exempt from income tax;
• Any national or provincial public entity if 80% or more of its expenditure is defrayed directly or indirectly from funds voted by Parliament;
• Any municipality which has been issued with a certificate of exemption by the Minister of Labour.
• This levy cannot be deducted from the agent or staff of the business and is payable by the principal or business owner.

How to determine which SETA your company belongs too

 Each SETA has a mandate to serve the Sector Industry Classification Codes (Sic Codes) under its control as determined by the Department of Higher Education from time to time.

  Currently Skills Levies are paid to the relevant SETA and distributed as follows:  (better quality graph attached)

Signa now offers a service to assist the clients in applying for Discretionary Grants, when their SETAs grants window opens.  For more info on how we can assist you please feel free to contact [email protected] 

Current open window:

The Services SETA 2016-17 Discretionary Grant Window 2 applications opens on 23 January 2017 at 08:00 am and closes on 24 February 2017 at 16:00.  The Services SETA is a public institution and is therefore obliged to avail business and skills development training opportunities to all South Africans who meet its requirements. 

Services SETAs discretionary funding is applicable, in the main, to:

• Applicants must have a valid Services SETA Levy number.
  
•  Applicants must provide proof that the qualification applied for aligns with the core business operations of the applicant.
• All stakeholders and role-players with the requisite capacity and good standing legally may apply for Services SETA funded interventions.
• Must have a Valid Tax Clearance or Exemption Certificate (valid at date of closure)
• Company Registration Documents
• We will require written authority from the applicant to represent the company and to conduct dealings with SETA in relation to the discretionary grant process.  (Form 1b – Declaration of Authorised Person) 

 Frequently asked questions:

• If ?I applied for previous discretionary grant allocations, may ?I apply again? Yes, all applicants who fulfil the criteria set out in the dg advert online, whether successful or not, may apply for the discretionary grant advert.?
• Is my company still eligible to apply if they have foreign nationals in the management structure? Yes. Your company is eligible to apply. The company has to be registered & based in south africa; the learners have to be based in south africa as well.
  
• Can ?I? nominate someone to make enquiries and/or apply with the services seta on my behalf?  Services seta will require written authority from the applicant to represent the company and to conduct dealings with services seta in relation to the discretionary grant process. A template (form 1b – declaration of authorised person) is provided for this purpose.
  
• How do I determine ?which SETA I actually belong ?to?  Primary focus of the business is determined by analysing what approximately 60% of your employees do. 
  
• How will I know what to do in order to comply with the requirements? The SETA will send you all the information you need, 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 your participation
  
• Are any employers exempt from paying the levy? Yes. The exemptions are applicable if certain provisions are met. You will be able to apply for such exemptions, which you will find in the SDL 101 form, issued by the Commissioner of SARS. SARS will ultimately determine whether you qualify for an exemption or not
  
• To whom are levies payable? Levies are payable to the South African Revenue Service, which acts as a collecting agency for the applicable SETA. 
  
• ?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. 
  
• By when is the levy payable? The levy must be paid to SARS 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. 

Thank you, have a great year, and if I can be of any assistance please feel free to ask.

Glenda Wendy Shuttleworth  c 082 55 88 042  |  t 0861 124 668  |  e [email protected]