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Skills Development Act

The Skills Development Act aims to develop the skills of the South African workforce and to improve the quality of life of workers and their prospects of work. To improve productivity in the workplace and the competitiveness of employers and to promote self-employment. The Skills Development Act as amended by the

• Amendment - Skills Development Act - 2003, and 
• Proposed Amendments to SETAs June 2006

Skills Development Levies Act

The Skills Development Levies Act applies to all employers except:

• the public service;
• religious or charity organisations;
• public entities that get more than 80% of their money from Parliament; and
• employers:
  • whose total pay to all its workers is less than R 250 000 per year;
  • and who do not have to register according to the Income Tax Act.

Basic Guide for Registering for the Skills Development Levy
Based on Legislation in Section 5 of the Skills Development Act.

Registering with SARS

Employers must register with the South African Revenue Services (SARS). When they register, employers must tell SARS which SETA they belong to.

Employers who Fall Under more than One SETA

Employers who fall under more than one SETA must consider the following when deciding which one is best for their workplace:

• composition of their workforce;
• pay of the different workers;
• and training needs of the different workers

Basic Guide for Skills Development LeviesEmployers must pay 1% of their workers’ pay to the skills development levy. The money goes to Sector Education and Training Authorities (SETAs) and the Skills Development Fund to pay for training.  Based on Legislation in the Skills Development Act.

Registration

Employers who are required to pay the skills development levy must register with the South African Revenue Services (SARS).

Levy Amount

Employers must pay 1% of all their workers’ pay to the skills development levy every month. The levy may not be deducted from workers’ pay.

Payment

Employers must pay the levy to the South African Revenue Services (SARS) by the 7th day of each month.

Non-Payment

Employers who do not pay will have to pay interest on the money they owe and may also have to pay a penalty.

Distribution of Funds

• SETAs get 80% of the money
• Employers get back some of the money back from SETAs as a refund if they train their workers.
• The Skills Development Fund gets 20% of the money, which is used for special training, etc.