Skills Development Levy (SDL) Guide for Employers

The Skills Development Levy (SDL) is a mandatory levy that all employers in Singapore must pay for each employee working in Singapore. The SDL funds the Skills Development Fund, administered by SkillsFuture Singapore (SSG), which supports workforce upgrading programs and training subsidies.

Unlike CPF (which applies only to Singapore Citizens and PRs), the SDL applies to all employees — including foreign workers on Work Permits, S Passes, and Employment Passes. This makes it a universal employer obligation regardless of the workforce composition.

The SDL is collected monthly by the CPF Board on behalf of SSG, alongside CPF contributions. While the levy amount per employee is relatively small, errors in computation and payment — particularly for companies with large numbers of lower-wage workers — can accumulate and attract penalties.

The SDL rate is straightforward:

• Rate: 0.25% of each employee's total monthly remuneration
• Minimum levy: $2 per employee per month (for employees earning more than $800/month)
• Maximum levy: $11.25 per employee per month (since the levy applies to the first $4,500 of remuneration only)

Calculation examples:

• Employee earning $1,500/month: 0.25% × $1,500 = $3.75
• Employee earning $800/month: 0.25% × $800 = $2.00 (equals minimum, so $2 payable)
• Employee earning $600/month: 0.25% × $600 = $1.50 → rounded up to $2 minimum
• Employee earning $10,000/month: 0.25% × $4,500 = $11.25 (capped at first $4,500)

Total monthly remuneration for SDL purposes includes: basic wages, overtime pay, bonuses, commissions, allowances, and all other payments in respect of the employee's employment.

Rounding: SDL is rounded to the nearest cent. The minimum of $2 applies when wages exceed $800/month but the computed levy would be less than $2.

Employees earning $800 or less: SDL is not payable for employees earning $800 or less in total monthly remuneration.

SDL is payable by all employers for all employees working in Singapore, including:

• Singapore Citizens
• Permanent Residents
• Foreign workers on Employment Passes
• Foreign workers on S Passes
• Foreign workers on Work Permits
• Part-time employees
• Temporary/contract employees

Exemptions: The following are not liable for SDL:

• Employees of the Government of Singapore
• Employees of any statutory authority or body
• Domestic workers
• Self-employed persons (for themselves — but if they employ others, they must pay SDL for those employees)
• Employees earning $800 or less per month

Important: SDL applies regardless of whether the employee is local or foreign, full-time or part-time. The employer bears the full cost — SDL cannot be deducted from the employee's wages.

SDL is collected by the CPF Board on behalf of SkillsFuture Singapore (SSG):

• Payment deadline: Same as CPF — by the 14th of the following month
• Payment method: Submitted together with CPF contributions via CPF EZPay
• For employees who require CPF contributions (SCs and PRs), SDL is automatically computed and included in the CPF submission
• For foreign employees (no CPF), employers must still submit SDL via CPF EZPay under the SDL-only category

New employers: Employers must register for SDL with the CPF Board. This typically happens automatically when the company registers with MOM or ACRA and starts employing workers.

Foreign-only workforce: Companies employing only foreign workers (no CPF-contributing employees) must still register and submit SDL monthly via CPF EZPay.

Errors and adjustments: If SDL has been under-paid, the difference can be paid in the next month's submission. Over-payments can be offset against future months or refunded by the CPF Board upon application.

The SDL funds the Skills Development Fund (SDF), which provides grants and subsidies for workforce training and development. Employers who pay SDL can access various SkillsFuture programs:

• Absentee Payroll (AP) funding: Employers receive a grant of up to 80% of hourly basic pay (capped at $7.50/hour for SMEs, $4.50 for non-SMEs) when employees attend SSG-approved courses during working hours
• Course fee subsidies: Up to 70% subsidy on course fees for SSG-supported courses (up to 90% for SMEs under Enhanced Training Support)
• SkillsFuture Enterprise Credit: SMEs can receive a one-time $10,000 credit to defray out-of-pocket expenses for supported workforce transformation programs
• Workforce Singapore (WSG) programs: Career conversion programs, job redesign grants, and industry transformation support

To access these benefits, employers need a valid SSG account and must meet the specific eligibility criteria for each program. Course enrollment is typically done through the SkillsFuture for Business portal or the Training Partners Gateway (TPGateway).

The SDL effectively creates a training ecosystem — employers contribute a small levy, and in return, they can access substantial subsidies that significantly reduce the cost of employee training and upskilling.