What Is SDL (Skills Development Levy)?
Quick Answer
What Is SDL (Skills Development Levy)?
The Skills Development Levy (SDL) is 1% of your total payroll, paid monthly with your EMP201, funding skills training through the SETAs. Employers with total annual payroll of R500,000 or less are exempt. Once you cross that line, SDL registration with SARS is compulsory.
What this means in plain language
SDL exists to fund the SETA system – the industry training authorities that run learnerships and skills programmes. You pay 1% out; compliant employers can claim grants back for training their own staff.
It rides on the same employer registration as PAYE and UIF at SARS, and appears as its own line on the monthly EMP201. Try the SDL calculator.
Who this applies to
- Employers whose annual payroll exceeds R500,000
- Growing businesses approaching the threshold for the first time
Step by step
- Estimate your total annual payroll (all salaries and wages).
- If above R500,000, register for SDL on your SARS employer profile.
- Calculate 1% of the monthly payroll each month.
- Pay it with the EMP201 by the 7th of the following month.
- Register with your industry SETA to access mandatory and discretionary grants.
What it costs
| Item | Cost / detail |
|---|---|
| SDL rate | 1% of total payroll |
| Exemption | Annual payroll of R500,000 or less |
Common mistakes to avoid
- Crossing R500,000 and never registering – SARS picks it up at the EMP501 reconciliation.
- Paying SDL but never joining the SETA – you leave the grants you funded on the table.
- Calculating 1% per employee rather than 1% of the whole payroll.
A South African example
A Klerksdorp engineering firm grows to a R1.2 million annual payroll. SDL adds R1,000 a month to its EMP201 – and the firm claims mandatory grants back from its SETA for the apprenticeships it runs.
Related questions
- What Is an EMP201?
- Hiring Employees in South Africa: The Complete Employer Guide
- Free SDL Calculator (Skills Development Levy)
Always verify this information with official South African government sources. Rules, fees and thresholds change. Check SARS, CIPC, the Department of Employment and Labour or gov.za before you act.
Frequently Asked Questions
Who is exempt from SDL?
Employers whose total annual payroll is R500,000 or less are exempt from registering for and paying SDL. Certain public-sector and religious employers are also exempt.
What is the SDL rate?
One percent of the total leviable payroll, paid monthly with the EMP201 declaration.
Can I get SDL money back?
Yes, partly – employers registered with their SETA can claim mandatory grants (a percentage of levies paid) for workplace skills plans and reports, plus discretionary grants for learnerships.
Official sources
About BizAnswers: BizAnswers is a privately owned South African company – not a government department. Our guides are free to read and show you how to do things yourself through official channels. If you would rather have the paperwork handled for you, we assist individuals and businesses with filing their South African tax returns and staying compliant, which is a paid service, not a free government service. Contact us for help.
Last reviewed: September 2026 by the BizAnswers editorial team. How we write and check our guides.
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