The SDL collected are channelled to the Skills Development Fund (SDF), which is used to support workforce upgrading programmes and to provide training grants to you when you send your employees for training under the National Continuing Education Training system.
The SDL and SDF are administrated by the SkillsFuture Singapore Agency (SSG).
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, S Pass, Employment Pass, Personalised Employment Pass holders and LOC (Letter Of Consent) holders.
The SDL for foreign employees is in addition to the Foreign Worker Levy payable to the Ministry of Manpower.
Under the SDL Act, you are required to contribute SDL for all your employees* up to the first SGD4,500 of each employee’s total monthly wages at a levy rate of 0.25% or a minimum of SGD2 (for total wages of SGD800 or less), whichever is higher.
The SDL calculation formula is as follows:
- The contribution percentage is 0.25% of the staff member’s monthly wage.
- The minimum SDL is $2.
- The maximum SDL is $11.25.
- Wages up to $800 per month = $2 for SDL
- Wages between $800 and $4,500: Salary x 0.25% SDL
- Wages above $4,500 then pay a flat $11.25 for SDL
* 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.
Who are the Employees Excluded From The SDL
There are a few circumstances where businesses are exempted from the monthly SDL payment for their employees:
- Those who are not in Singapore companies or businesses’ payroll.
- Singapore companies or businesses that hire workers outside the country and whose jobs require them to work overseas. For example, a Singapore registered company that hires an employee in the U.S. for the purpose of increasing business in France.
- Singapore companies or businesses that hire a worker in Singapore but proceeds to send them abroad to work in a satellite office. This could be, for example, a Singapore resident is transferred to the Myanmar or India office.
- Fees paid to both local and foreign directors does not require a Skills Development Levy (SDL) contribution. However, if they are paid a monthly salary then the SDL will be applicable.
- Self-employed individuals do not need to remit a monthly SDL for their earnings or profits. However, if they hire employees or contractors on their payroll then the SDL will be applicable.
- Stipends paid to interns or students engaging in work during vacation including those who are on Work Holiday Pass (WHP) are not applicable for SDL contributions.
- Employees hired by individuals such as those tasked to fulfill household duties do not qualify for SDL contributions. Examples of these are gardeners, chauffeurs, and domestic helpers (aka: maids).
When to pay SDL (Skills Development Levy)?
SDL payment should be made by the 14th day of the following month (for every month that the employee is hired). For late payment, SSG will impose a penalty of 10% per annum on the outstanding amount.
How to pay SDL?
The Central Provident Fund (CPF) Board is the authorised collection agency for SDL. Employers can pay SDL together with their employees’ CPF contributions via the following options:
When you are making monthly CPF contributions the SDL will be computed automatically if you have opted in to include any local employees. You need to input the SDL amount payable manually for any foreign employees separately when the CPF contribution is made monthly. Note: The CPF system will not compute the SDL if you have not opted in for any local employees even though it’s mandatory for all employees under the payroll.
CPF e-Submit@AXS (for employers with 10 or fewer employees)
The SDL can be paid along with the monthly CPF contribution through e-Submit@web. If your firm has 10 or fewer employees, you can use e-Submit@AXS.
E-Payment at SDL website
Firms employing only foreign workers or those who have missed to contribute the SDL in the past are allowed to make payments via the E-payment service at the SDL website. https://sdl.ssg.gov.sg/Default.aspx
Direct Payment to SDL
Direct payments to SSG are also allowed, either through a crossed cheque or bank transfer. The cheque must be payable to Skills Development Fund. Be sure to include details such as the company’s name, payment period, and contact information using the SDL Return Form.
SDL for foreign employees when there is no local employee
Employers with only foreign employees can pay SDL (Skills Development Levy) directly to SSG either via GIRO or by issuing a cross cheque payable to ‘Skills Development Fund’ (details such as Organisation’s name, period of payment, contact person, contact address should be provided).
How To Apply for SDL Grants
The purpose of the SDL is to help businesses access a pool of funds to upskill their workforce and encourage individual growth.
The Skills Connect website is the best place to start for more information about how to get access to the plethora of training grants and schemes. There’s up-to-date instruction and guidance for Singapore companies or businesses, as well as for individuals and training providers looking to get accredited.
Please refer to the below link with Annex A for the contents of the table are meant to provide general guidance, and the answers provided are only indicative in nature. For the avoidance of doubt, the said contents are not to be construed as limiting or prejudicing the operation of the Skills Development Levy Act (Chapter 306) or the subsidiary legislation made thereunder.
You may wish to visit Skills Development Levy (SDL) System or use SDL Calculator online for detailed information and current updates. Alternatively, employers can also E-mail SSG or contact SSG at 67855785.
Source of Information for SDL & its related matters is from the SkillsFuture Singapore Agency, Singapore.