- SDL is 0.25% of each employee’s monthly wages, with a floor of S$2 and a cap of S$11.25.
- It applies to almost every employee, local or foreign, full-time or part-time, on the first S$4,500 of monthly wages.
- You pay SDL to the CPF Board through the same monthly e-Submission as CPF, by the 14th of the following month.
The Skills Development Levy rate is 0.25% of each employee’s total monthly wages, and almost every Singapore employer has to pay it. That’s the short answer, and for most small teams the sum is tiny: a minimum of S$2 a month for your lowest earners and a maximum of S$11.25 for anyone earning more than S$4,500.
Small as it is, it’s a statutory levy, so getting it wrong still counts as getting your payroll wrong. A payroll or accounting service can calculate and pay your Skills Development Levy alongside CPF each month, but it’s worth understanding the number yourself first.
What is the Skills Development Levy?
The Skills Development Levy, or SDL, is a compulsory levy that employers pay for every employee they hire in Singapore. It’s collected by the CPF Board on behalf of the SkillsFuture Singapore Agency, and it feeds the Skills Development Fund, which pays for national training programmes and course subsidies. In other words, the money you pay in comes back to the wider workforce as subsidised training, and often back to your own business through grants.
Two things trip people up. First, SDL is separate from CPF, even though you pay both to the CPF Board in the same monthly submission. Second, it’s the employer’s cost alone. You don’t deduct it from anyone’s salary the way you handle the employee share of CPF. The legal basis for all of this is the Skills Development Levy Act 1979, so it isn’t new; it’s just easy to overlook when you’re setting up payroll for the first time.
How much SDL do you pay?
SDL is 0.25% of an employee’s total monthly wages, subject to a floor and a cap:
- Floor: S$2, applies to any employee earning less than S$800 a month (if 0.25% works out to less than S$2, you still pay S$2)
- Cap: S$11.25, applies once an employee earns more than S$4,500 a month, as the levy only applies to the first S$4,500 of monthly wages (if 0.25% works out to more than S$11.25, you pay S$11.25)
- “Total wages” means the full remuneration for the month: basic pay plus overtime, allowances, commission, bonuses, and other cash payments, so the figure moves month to month if your team earns variable pay.
Who has to pay SDL?
Almost every employer, for almost every employee. SDL is due on all employees rendering services in Singapore, whether they’re employed on a permanent, part-time, casual or temporary basis. Crucially, it also covers foreign employees, which surprises many first-time employers who assume levies apply only to local staff.
This is where SDL and the Foreign Worker Levy differ, and it’s worth being clear about the boundary. The Foreign Worker Levy applies only to Work Permit and S Pass holders. SDL applies to everyone on your payroll, local and foreign alike, including Employment Pass holders. You can end up paying both for the same Work Permit holder, and only SDL for a Singaporean or Employment Pass employee. If you employ residents, your obligations under the Employment Act and your CPF duties sit alongside SDL as part of the same monthly cycle.
How and when do you pay SDL?
You pay SDL to the CPF Board alongside your monthly CPF contributions, with no separate return or deadline to track:
- Deadline: 14th of the following month. Wages paid in July must be submitted and paid by 14 August; late payment can attract interest.
- Same e-Submission as CPF. The system calculates SDL using the same wage data and collects it together, so there is nothing extra to file.
- No CPF obligation does mean no SDL. If you do not contribute CPF for someone (e.g. a director drawing fees rather than a salary), you may still owe SDL on their wages, handled through the CPF Board’s channels.
- When in doubt, treat anyone earning wages for services in Singapore as SDL-liable and verify the edge cases separately.
How do you calculate SDL?
Take each employee’s total wages for the month, multiply by 0.25%, then apply the floor and the cap. Do it per employee, then add the results together for your total monthly SDL. Here’s how that plays out across four common wage levels.
|
Employee’s monthly wages |
0.25% of wages |
SDL payable |
|---|---|---|
|
S$650 |
S$1.63 |
S$2.00 (floor applies) |
|
S$2,000 |
S$5.00 |
S$5.00 |
|
S$4,000 |
S$10.00 |
S$10.00 |
|
S$8,000 |
S$20.00 (before cap) |
S$11.25 (cap applies) |
So a four-person team on those exact wages would owe S$2.00 plus S$5.00 plus S$10.00 plus S$11.25, which is S$28.25 for the month. The maths is simple, but it’s per employee,e and it repeats every month, which is why most growing teams let payroll software handle SDL rather than recomputing it by hand.
Are there any SDL exemptions?
Yes, but they’re narrow. SDL generally isn’t due on certain categories of workers, such as domestic servants employed in a private household and, in defined cases, people like gardeners or private chauffeurs engaged in a personal capacity rather than by a business. Some payments also fall outside “wages”, so they don’t attract the levy.
For an ordinary company with employees, though, assume SDL applies unless SkillsFuture Singapore’s guidance clearly says otherwise. Don’t self-exempt a normal hire because they’re part-time or foreign, because those aren’t grounds for exemption. If you think a genuine exemption applies, confirm it against SkillsFuture Singapore’s rules before you leave anyone off your submission.
What does SDL give back?
This is the part worth remembering when the levy feels like just another cost. Because you pay SDL, your business can tap into SkillsFuture Singapore’s training ecosystem: subsidised courses for your staff and funding schemes that offset the cost of sending people for training.
The most relevant one for employers is Absentee Payroll funding, which helps cover the salaries you keep paying while employees are away on approved training. Beyond that, there’s a wider set of government grants and support schemes that reward businesses for investing in their people. And if you’re raising wages for lower-wage staff, the Progressive Wage Credit Scheme can co-fund those increases. Paid consistently and paired with the right grants, SDL stops being a line item and starts working for you.
How Sleek helps with your Skills Development Levy
SDL is small, monthly and easy to mis-file, which is exactly the kind of task that eats a founder’s time for no good reason. Sleek runs payroll and accounting for Singapore businesses end to end: monthly payslips, CPF, SDL, Self-Help Group funds and IR8A reporting, all computed correctly and submitted on time. You get the figures right every month without doing the maths, and you free up the hours to focus on the parts of the business only you can run.
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FAQs: Skills Development Levy in Singapore: Rate, Calculation and Exemptions
What is the Skills Development Levy rate in Singapore?
The SDL rate is 0.25% of an employee’s total monthly wages. It’s subject to a minimum of S$2 for employees earning under S$800 a month and a maximum of S$11.25 for those earning more than S$4,500, because the levy only applies to the first S$4,500 of monthly wages.
Do employers pay SDL for foreign employees?
Yes. SDL applies to all employees rendering services in Singapore, including foreign staff on Work Permits, S Passes and Employment Passes. This is different from the Foreign Worker Levy, which only applies to Work Permit and S Pass holders. You can owe both for the same Work Permit holder.
Is SDL the same as CPF?
No. CPF is a retirement and healthcare savings contribution split between employer and employee. SDL is a separate training levy paid only by the employer. You do pay them together, though, because both go to the CPF Board in the same monthly e-Submission.
How do I calculate SDL for my staff?
Multiply each employee’s total monthly wages by 0.25%, then apply the S$2 floor and the S$11.25 cap. For example, wages of S$2,000 give S$5.00, while wages of S$8,000 are capped at S$11.25. Add each employee’s figure together for your monthly total.
When is SDL due?
SDL is due by the 14th of the month following the wage month, at the same time as your CPF contributions. There’s no separate SDL deadline or return to file. Late payment can attract interest, so keep your monthly submissions on time.
Is SDL tax-deductible?
SDL is a business expense incurred in the course of running your company, so it’s generally deductible against your taxable income. Keep your monthly SDL records with the rest of your payroll documentation so your tax return reflects the cost accurately.
What do I get back for paying SDL?
Your SDL funds the Skills Development Fund, which subsidises national training. As an employer, that gives you access to subsidised courses and schemes like Absentee Payroll funding, which helps cover salaries while staff attend approved training. Paired with the right grants, SDL can offset a real share of your training costs.
