Skills Development Levy (SDL) is a compulsory demand that is implemented in all Singapore companies. As required by law under the SDL Act, employers are required to pay a monthly SDL for all employees rendering services in Singapore, including foreign employees and employees employed on casual, part-time, or temporary basis. Domestics servants, gardeners, or chauffeurs are exempted from the SDL Act. The CPF Board collects SDL on behalf of the Skills Future Singapore Agency (SSG).
The SDL collected are directed to the Skills Development Fund (SDF), which is used to aid workforce upgrading programmes and to supply training grants to you when you send your employees for training under the National Continuing Education Training system.
For more information, please visit CPF's website.
Who Do I Pay For?
You have to pay SDL for all your employees working in Singapore, including:
- employees employed on permanent, part-time, casual and temporary basis
- foreign employees on work permits and employment pass workers
The SDL for foreign employees is in addition to the Foreign Worker Levy due to the Ministry of Manpower (MOM).
How to Calculate?
You can use the Skills Development Levy Calculator to compute the total SDL payable.
Under the SDL Act, you are required to contribute SDL for all your employees up to the first $4,500 of each employee's total monthly wages at a levy rate of 0.25% or a minimum of $2 (for total wages of $800 or less), whichever is higher.
Note: Employees include full-time, casual, part-time, temporary and foreign employees rendering services wholly or partly in Singapore.
The total monthly wages includes any salary, commission, bonus, leave pay, overtime pay, allowance and other payments in cash.
After you have computed the SDL for each employee, you need to add up the total amount of SDL payable and round down to the nearest dollar. The table below shows an example on the computation of the SDL payable.
Picture from: Ministry of Manpower here
Paying Employees' SDL
You can pay SDL together with your employees' monthly CPF contributions. If you only employ foreign employees, you can pay the SDL directly to SkillsFuture Singapore Agency (SSG).
SDL is required by the law for all Singaporean companies and are thus turned on by default. If you don't want to pay for it anymore you can simply find it on Payboy and remove it from your universal payroll. Should you wish to keep it, the calculations will be done by Payboy in the system.
How to opt-out SDL for all employees
- Head to Payroll > click on Payroll Settings on the side menu.
- Scroll down and look under the header Levies & Contributions Via CPF
- Uncheck the box labelled Apply Skills Development Levy (SDL) by clicking on the checkbox next to the label.
- Click Submit to save any changes made.
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