Pre-1994, South Africa was characterised by non-inclusion of most of the population. Thankfully, after our first democratic elections several pieces of legislation were enacted to rectify the wrongs of the past. The Skills Development Act 97 of 1998 (SDA) and the Skills Development Levies Act (SDLA) Act 31 of 2003 are two of these.
What is the purpose of the SDA?
One of the problems that was identified in apartheid South Africa is the lack of skills and employment opportunities who were not privileged under this regime. Thus, the SDA was enacted to – among others – to provide a framework to be used to develop South Africa’s workforce. One of the ways in which this would be carried out is through the development of a levy-grant scheme as well as a National Skills Fund.
How does the SDLA fit in?
The SDLA provides more clarity on the levy-grant scheme and who must pay the Skills Development Levy (SDL) under this scheme. The Services Seta states that if you have the following you are liable for an SDL of 1% of your turnover:
- Employees to who you pay Pay As You Earn (PAYE), and
- A payroll that exceeds R500 000 per annum
An amount of 20% of your SDL goes to the National Skills Fund. The balance is distributed to the Sector Education and Training Authority (SETA) that your company belongs to.
Skills development is an integral part of the new B-BBEE Codes which came into effect two years ago. This is because if you don’t obtain at least 40% in ownership, skills development as well as supplier and enterprise development your B-BBEE level could drop by one point. Make sure that you don’t get left out and sign up for Global Business Solutions’ B-BBEE Bootcamp. Follow this link to find a course in your area.