How is the Skills Development Levy (SDL) calculated?
The Skills Development Levy (SDL) is calculated on the balance of remuneration as defined in the fourth schedule to the Income Tax Act.
The following elements are excluded from the SDL balance of remuneration:
- Pensions, superannuation allowances or retirement allowances
- Annuities
- Payments for relinquishment, termination or loss of office or employment
- Lumpsum payments
The SDL Levy is calculated according to the below formulae -
Step 1: Calculate the SDL Remuneration
SDL Remuneration = Taxable Earnings + Taxable Fringe Benefits - Tax Deductible Deductions
Step 2: Calculate the SDL using the result of step 1.
SDL = SDL Remuneration x 1%