The COVID-19 outbreak together with extended lockdown continues to have a negative impact on the cash flow of employers. The government has therefore proposed a four months’ payment holiday (non-payment) for Skills Development Levy (SDL) contributions by employers.
The four months’ payment holiday came into effect from 1 May 2020 and will end on 31 August 2020. This means that employers who are registered for SDL are not required to declare any SDL liability on their May to August 2020 EMP201 returns and make payment for these periods.
What is SDL?
SDL is a levy imposed to encourage learning and development in South Africa and is determined by an employer's salary bill.
The funds are to be used to develop and improve skills of employees.
Who must pay SDL?
SDL is due by employers who have been registered. You can register once for all different tax types using the client information system.
Top Tip: Where an employer expects that the total salaries will be more than R500 000 over the next 12 months, that employer becomes liable to pay SDL.
What steps must the employer take?
If an employer becomes liable, they need to register for SDL.
The following employers are exempt from paying SDL—
How much do you need to pay?
1% of the total amount paid in salaries to employees (including overtime payments, leave pay, bonuses, commissions and lump sum payments).
The amounts deducted or withheld by the employer must be paid to SARS on a monthly basis, by completing the Monthly Employer Declaration (EMP201). The EMP201 is a payment declaration in which the employer declares the total payment together with the allocations for PAYE, SDL, UIF and/or Employment Tax Incentive (ETI).
A unique Payment reference number (PRN) will be pre-populated on the EMP201, and will be used to link the actual payment with the relevant EMP201 payment declaration.
This article first appeared on sars.gov.za.
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