As you know, SDL is a company contribution you must pay every month. This levy funds education and training through the Sector Training and Education Authorities (SETAs).
It's important that you get the treatment of SDL right. If you get it wrong, you'll face interest and penalties on underpayment and you'll expose your business to a full employees' tax audit from SARS.
Don't take that risk!
Avoid this mistake when you pay your SDL
So what's the mistake? Forgetting to include your members and directors' remuneration when you pay your SDL.
The reason this mistake is common is because of the following:
The Practical Tax Loose Leaf Service explains that when the SDL was first introduced, members of Close Corporations and directors of private companies were exempt from contributing to this levy.
But, the legislation changed a few years ago and the SDL now includes members and directors as employees.
Many employees are still not aware of the change and are still playing by the old rules.
Don't make the same mistake of excluding members and directors from the levy, they qualify and you must include them.
Important SDL tip
The Loose Leaf Service explains that you can only exclude deemed remuneration from the leviable amount, which is determined in accordance with Section 11C of the Fourth Schedule to the Income Tax Act. Actual remuneration paid or payable to a director must still fall under SDL.
Remember that getting the treatment of SDL wrong carries harsh penalties and interest.
So don't make the mistake of excluding your members and directors' remuneration when you pay your SDL.
If you want more info on SDL, check out this article.
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