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Skills Development Levy (SDL)

Updated: Jun 17, 2023

What is SDL?

Skills Development Levy (SDL) is a compulsory levy that employers in Singapore are required to pay for all their employees, including foreign employees. The SDL is in addition to the monthly CPF contributions made by employers. The levy is paid to and collected by the CPF Board on behalf of the SkillsFuture Singapore Agency (SSG)

Purpose of Skills Development Levy

Purpose of SDL

The SDL (Skills Development Levy) collected from employers is channeled to the Skills Development Fund. The funds are used to support workforce upgrading programs and provide training grants to employers who send their employees for training under the National Continuing Education Training (CET) system.


The SDL plays a crucial role in promoting continuous learning and skills development in the workforce, enabling employees to enhance their capabilities and stay competitive in the evolving job market.


SDL Rates

Here are the steps to calculate the SDL (Skills Development Levy) amount for each employee:


1. Compute SDL for each employee

The SDL payable for each employee is calculated as 0.25% of their monthly total wages. However, there are minimum and maximum limits based on the employee's monthly earnings:

  • For an employee earning less than $800 a month, the minimum payable SDL is $2.

  • For an employee earning more than $4,500 a month, the maximum payable SDL is $11.25.

2. Sum up the total SDL for all your employees

Calculate the SDL amount for each employee using the guidelines mentioned in step 1. Then, sum up the SDL calculated for all your employees. Finally, round the total amount down to the nearest dollar.


Example calculation:

Let's consider an example to illustrate the computation of SDL and the potential penalty for late payment.

Example of SDL calculation

Late Payment Penalty:

If the SDL payment is not made on time, a penalty of 10% on the outstanding amount may be imposed each year.


Let's assume that the SDL payment is not made for three months, resulting in an outstanding SDL amount of $40.


Penalty = $40 x 10% = $4 (for three months of non-payment)


Therefore, if you pay the SDL late in this scenario, you may incur a penalty of $4 for each month of delay.


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