SDL Distribution – Does not add up….


Front Page Looking For… Skills Development Facilitators SDL Distribution – Does not add up….

This topic contains 23 replies, has 5 voices, and was last updated by  sylvia hammond 4 months, 1 week ago.

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  • #65060

    Henk Cloete
    Participant

    Hi guys

    It seems that I am a bit mathematically challenged today…

    Maybe some of the other SDF’s could assist?

    SDL is disbursed as follow:
    Payroll 1% to SARS = R200 000 (As example)
    SARS deducts 2% = R 4 000

    AMOUNT to distribute to SETA / NSF = R196 000
    20% NSF = R 39 200
    80% SETA = R156 800

    The amount of R156 800 allocated to the SETA now becomes their new “100%”

    10.5% SETA ADMIN = R16 464 (0.5% of this goes to QCTO)
    20% MANDATORY GRANT = R31 360
    49.5% DISCRETIONARY GRANT = R77 616

    Here comes the question….
    10.5% + 20% + 49.5% = 80%
    R16 464 + R31 360 + R77 616 = R125 440

    I am shorting R31 360 or 20%

    Where does this go?

    If you could please clarify or refer me to some reading material I would appreciate it.

    Thanks

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  • #65065

    sylvia hammond
    Keymaster

    Hi Henk,
    If I follow you correctly:
    if you add the 10.5 + 20 = 30.5
    100 – 30.5 = 69.5 (not 49.5)

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  • #65068

    Henk Cloete
    Participant

    Exactly Sylvia… where does the other 20% go??

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  • #65078

    Kate Sani
    Participant

    Hi Henk. Im not an expert but my understanding is that the Mandatory Grant is the sticky bit. According to legislation, Employers must receive back 20% of their levies paid to SARS, not 20% of the 80% allocated to the SETA.
    Thus, employers paid R200 000 in levies. 20% of this is R40 000. This will be paid by the SETA out of their grant budget.

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  • #65079

    Henk Cloete
    Participant

    Kate – that should be the equation.. But consider the following…

    SARS receive the SDL, deducts their “part” for administration (being a post office) and then distributes to NSF and SETA… Already you are not dealing with the original R200 000…

    Now the SETA takes “their” 80% and deducts 10.5% (0.5% goes to the QCTO) for administration…

    An even smaller amount is left… Nobody could expect from the SETA to bear the brunt of 20% x R200 000 when they actually only received 80% of an amount less than that…

    That being said… nobody seems to be able to explain where the additional 20% (that definitely is amiss) goes…

    Thanks for the revert…

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    • This reply was modified 10 months, 2 weeks ago by  Henk Cloete.
  • #65089

    Des Squire
    Participant

    In summary
    20% goes to national skills fund
    80% of all grants are paid to the SETAS
    10.5% is used for administration cost and 0.5% goes to QCTO
    Balance is now 69%
    20% is allocated to Mandatory grants
    49% is used for Discretionary grants of which 80% must be used for Pivotal Funding and 20% for Discretionary Funding
    Levies collected as you say amount to 200000
    NSF get 39200 and SETA gets 156800.
    10.5% of 156800 is 16464
    .5% of 156800 is 784 so the new balance for grant distribution is 139552.
    20% goes to mandatory is 27910.40
    80 Pivotal amounts to 111641.60 – total is 139552.
    100% accounted for. QED

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  • #65090

    Henk Cloete
    Participant

    Hi Des

    Thanks for the revert, and although I have the greatest respect for you, I still feel something is amiss…

    Please see the attached, maybe my point of view would be better illustrated..

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  • #65104

    Des Squire
    Participant

    Hi Henk, you are so kind.
    The .5% that is paid to QCTO is not out of the 10.5% administration costs. It is a stand alone .5% of the 80% or of the 156800 in your example.

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  • #66766

    Zanele Tshabalala
    Participant

    Good Afternoon

    The levies are disbursed as follows and as per your example – Payroll would have been R20 000 000
    SDL is thus 1% = R200 000

    Mandatory Grant = 20.0% = R40 000
    Discretionery Grant = 49.5% = R99 000
    QCTO = 0.5% = R 1 000
    Sars = 2.0% = R 4 000
    National Skills Fund = 18.0% = R36 000
    SETA = 10.0% = R20 000

    Total =R200 000

    I hope this helps, even though its months later

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    • #66767

      sylvia hammond
      Keymaster

      Thank you Zanele –
      There are always new people coming in and this issue has not changed at the moment, so it is very appropriate.
      If I understand the key is that the NSF is not getting 20% but is getting 18%.
      So I think that Henk is looking for the Regulation that confirms that – so I think we all need to go and search – and see who can come back with the info.

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  • #66774

    Henk Cloete
    Participant

    Hi guys

    I am glad this has caught some attention again as I am still adamant that either the powers that be or I cannot do maths..

    I attached a spreadsheet for easy reference… yellow sections open

    Enjoy your day

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  • #66776

    Henk Cloete
    Participant

    Maybe this would help you see why I am confused….

    Take a R100 note and get yourself a lot of change… (R1, 50c etc)

    Now – play the following game:

    You have R100 in your pocket, you need to go to the bathroom and end up paying R2 to gain access… (2%)

    You now have only R98 in your pocket.

    You arrive at home to find your youngest child standing there anxiously; he needs R19.60 so that he might be able to buy himself some lunch at school. (20%)

    You now only have R78.40 in your pocket.

    In the kitchen your wife asks you for all the cash that you have on you for food etc… You hand her the R78.40 (80%)

    YOU NOW HAVE NOTHING…. (20%+80%=100%)

    BUT

    Your wife left for the mall with her R78.40 to go and buy food…
    At shop A she spends – R7.84 (10%)
    At shop B she spends – R15.68 (20%)
    At shop C she spends – R38.81 (49.5%)
    She gives the guard a tip – R0.39 (0.5%)

    When she arrives home she tells you that she exhausted her funds and that she has no more money left???

    Do you agree with her? Or do you see the conundrum I am facing??

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  • #66778

    Zanele Tshabalala
    Participant

    Good day Henk

    I hope this helps, you can verify the information from Department of Justice

    SETA gets 80% (160 000)
    NSF gets 20% (40 000)

    Sars can then collect a maximum of 10%(R4000)from the money given to the NSF – as a collecting cost, in essence, that R4000 is 2% of the R200 000(skills development levy).

    The SETA has to now distribute their funds to the following, they receive R160 000

    Discretionary Grants R99000(49.5% of SDL) or (61.875% of R160000[SETA])
    Mandatory Grant R40 000(20% of SDL) or (25% of R160000[SETA])
    QCTO R1000 (0.5% of SDL) or ( 0.625% of R160 000[SETA])
    SETA Admin Cost R20000 (10% of SDL) or (12.5 of R160 000[SETA])

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    • #66783

      sylvia hammond
      Keymaster

      Dear Zanele,
      Unfortunately we don’t have a “feature the member of week” – I think I must ask our IT people about that. Thank you for your response. You definitely are the member of the week.
      That is the first time I have had clarity on exactly how that distribution works.
      I will see whether I can make a plan to get your response and Henk’s spreadsheet uploaded to our Downloads sector.
      Thank you.

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  • #66779

    Henk Cloete
    Participant

    Zanele – thanks for this insightful and eye opening answer! Since the inception of this new “system” during April 2013 I have really struggled to get my mind around this one…
    Now I can put this to bed…
    Thanks!!

    The spreadsheet should thus look like this.

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  • #66786

    Des Squire
    Participant

    Give Zanele a star. Thank you for clarifying

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  • #66790

    Zanele Tshabalala
    Participant

    It is thanks to this platform that most of us learn what we know. I appreciate and Thank you guys so much 🙂

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    • #66795

      sylvia hammond
      Keymaster

      Thanks Zanele – we learn and grow together. 🙂
      sylvia

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  • #67467

    Des Squire
    Participant

    There is a bone of contention at present as to whether the total levies payable amounts to 40%, 50% or the original 70%. Can anyone throw light on the subject and advise what the changes have been. My understanding is under question so I need help please.

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    • #67468

      sylvia hammond
      Keymaster

      Hi Des, Please have a look at the Downloads section where you will find an excellent detailed explanation which was confirmed with Treasury.
      Let me know if you can’t find it.

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  • #67469

    Des Squire
    Participant

    Hi Sylvia, Unfortunately I looked earlier and could not find the most up to date explanation. Your help will be appreciated.

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  • #67470

    sylvia hammond
    Keymaster

    Hi Des, the most up to date info is that from Henk and Zanele & Zanele confirmed with Treasury.
    Look on the right for the Downloads section. At the bottom of those headings there is a link to access the downloads documents – click there and it opens all the downloads.
    Just below the top – there is a heading about the Distributiion and two files – one from Henk and one from Zanele.
    They explain it extemely well.
    Let me know if you can’t find them.

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  • #67472

    Des Squire
    Participant

    Thank you Sylvia, yes, those are the ones I am familiar with and with which I agree. However some people are of the opinion that the total of 70% made up of discretionary and Mandatory grants is incorrect and that the combined is now 50%. That is what I am trying to get some opinions on.

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    • #67482

      sylvia hammond
      Keymaster

      Thanks for the clarification Des.
      Well I am no maths rocket scientist so I am not going to argue, but I found that the figures that Zanele provided, which she said are verifiable with the Treasury department – make complete sense to me.
      So I would suggest that the alternative idea people should take it up with the Treasury department.

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