What is Code 4142 on a South African IRP5?
The employer-paid Skills Development Levy on your tax certificate: how it is calculated and why it never touches your take-home pay.
4142Code 4142 is your employer's Skills Development Levy (SDL) on your IRP5: 1% of the remuneration your employer pays, handed to SARS from the business's own money. It is not deducted from your salary. Employers expecting R500,000 a year or less in remuneration need not register, so small employers often show no 4142 at all.
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What code 4142 means
Code 4142 is the SARS source code for the Skills Development Levy (SDL) on your IRP5. SARS calls the field "Employer SDL Contribution": the levy your employer paid on your remuneration, under the Skills Development Levies Act No. 9 of 1999.
It sits next to PAYE (code 4102) and UIF (code 4141) in the deduction group of the certificate, but unlike those two, none of it comes from you. SDL is the employer's levy. Your employer pays it to SARS from the business's own money, so your take-home pay is unaffected.
SDL is 4142, not 4115. Code 4115 is the tax on retirement lump sums and severance pay.
How the levy is worked out
SDL is 1% of the amount paid in salaries to employees, which SARS defines to include wages, overtime, leave pay, bonuses, fees, commissions and lump sum payments. Unlike UIF, there is no earnings ceiling. The levy keeps rising with pay.
| Monthly remuneration | SDL rate | Code 4142 (per month) |
|---|---|---|
| R10,000 | 1% | R100.00 |
| R20,000 | 1% | R200.00 |
| R35,000 | 1% | R350.00 |
| R60,000 | 1% | R600.00 |
| R100,000 | 1% | R1,000.00 |
At R35,000 a month for the whole year, 4142 reads R4,200.00 (12 × R350). Compare that with UIF, which stops at R177.12 a month for you and R177.12 for your employer no matter how much more you earn.
Who pays SDL and who is exempt
An employer does not have to register for SDL if the total remuneration it expects to pay all its employees over the next 12 months will not exceed R500,000. SARS also exempts some public employers (national and provincial government) and certain registered public benefit organisations. The full list is on SARS's SDL page.
For you as an employee, that means 4142 can be missing from a small employer's certificate. That is not an error.
When it is paid and what it funds
Employers declare and pay SDL on the monthly EMP201 employer declaration, within seven days after the end of the month, together with PAYE and UIF. The levy funds skills development through the Sector Education and Training Authorities (SETAs), which pay for learnerships and workplace training in their industries.
An employer that submits a Workplace Skills Plan and Annual Training Report to its SETA by 30 April can claim a grant of up to 20% of the SDL it paid back from its SETA. SETA grant rules change, so the employer confirms the current percentage with its SETA.
Check your net pay once. Take your gross pay, subtract PAYE, your 1% UIF and any other deductions listed on the payslip. If net pay is lower than that because of an extra 1% labelled SDL, raise it with payroll. There is no employee share of SDL.
Frequently asked questions
What does code 4142 mean on my IRP5?
Code 4142 is the Skills Development Levy your employer paid on your remuneration, 1% of it. On the IRP5 it sits in the same group as PAYE in 4102 and UIF in 4141. A figure there is normal for a larger employer, and it does not change your own tax.
Is SDL code 4115 or 4142?
SDL is code 4142. Code 4115 is PAYE on retirement lump sums and severance benefits, a different figure altogether. If you are matching a certificate line by line, look for 4142 next to the combined UIF figure in 4141, and keep 4115 for the lump sum tax.
Is SDL deducted from my salary?
No. SDL never appears as a deduction on your payslip. The only place you see it is the 4142 field on your IRP5, which records what your employer paid. If a payslip line labelled SDL reduces your net pay, that is a payroll error to raise. Your net pay is your gross pay less PAYE, UIF and the deductions you agreed to.
Why is my code 4142 zero or missing?
Ask payroll whether your employer is registered for SDL. A small employer under the registration threshold, or an exempt employer such as national or provincial government, has no 4142 to report, and SARS accepts 0.00 in the field. Neither case is an error, and neither affects your own tax.
Why is 4142 not capped like UIF?
The Skills Development Levies Act sets no earnings ceiling, only the 1% rate. On R100,000 a month, SDL is R1,000.00 while each half of UIF is still R177.12. That is why a high earner's 4142 can be several times the UIF in 4141.
What does SDL fund and can my employer claim it back?
SDL funds skills development through the SETAs. Your employer can claim a grant of up to 20% of the levy back from its SETA, so there is nothing for you to apply for. The percentage can change, so employers confirm it with their SETA. What you can use is the training the levy pays for, such as learnerships and skills programmes. Ask your HR department which ones your employer or SETA offers.
Does code 4142 affect my tax return?
No. SDL is your employer's cost, not income to you, so it adds nothing to your taxable income and takes nothing off your PAYE. SARS includes it, with 4141 and the PAYE codes, in the 4149 total on the certificate. You have nothing to claim or declare for it.