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Skills Development Levies Act
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Purpose of the Skills Development Levies Act:
The principal aim of the SDLA is to finance skills development programmes by a compulsory levy system. Based on the Act, every company that exceeds the threshold set for the annual payroll (currently this threshold is R 500,000 total payroll per annum), as calculated for Pay as You Earn (PAYE), has to pay one percent (1%) of their total payroll as a Skills Development Levy (SDL).
The SDLA (1999) did have an effect as expenditure on training increased. The average expenditure on training, as a percentage on payroll, in 2002/2003 was 2.1%. Large enterprises spent 2.8%, which is much higher than medium and small enterprises. This pattern of higher levels of spending in large enterprises is similar internationally, where expenditure on training usually increases with enterprise size. (Labour Market Review, 2005)
Click here to view a video that explains the Skills Development Levy.