What is Skills Development Levy (SDL)?

**Skills Development Levy (SDL) Overview**

The Skills Development Levy (SDL) is a statutory contribution paid by all Singapore employers for every employee working in Singapore. Unlike CPF, SDL applies regardless of the employee's nationality or work pass type, including Singapore Citizens, Permanent Residents, Employment Pass holders, S Pass holders, and Work Permit holders.

**Rate and Calculation**

SDL is levied at 0.25% of each employee's gross monthly wages, subject to a minimum of S$2.00 and a maximum of S$11.25 per employee per month. Gross wages include basic salary, overtime pay, allowances, and commissions, but generally exclude reimbursements and one-off special payments.

For a part-time employee earning S$800 per month: SDL = 0.25% x S$800 = S$2.00 (minimum applies). For a senior manager earning S$10,000 per month: SDL = S$11.25 (maximum applies; 0.25% x S$10,000 = S$25, but capped).

**Payment Channel**

SDL is collected by the CPF Board as part of the monthly CPF contribution process. For employees covered by CPF (SC and PR), SDL is submitted together with CPF contributions by the 14th of the following month. For non-CPF employees (foreigners), SDL must still be paid separately. Employers who use the CPF EZPay system submit SDL concurrently.

**Where SDL Funds Go**

SDL contributions are channelled to SkillsFuture Singapore (SSG), the statutory board responsible for workforce skills development. These funds support the SkillsFuture Credit scheme, the Enterprise Training Support system, and various government grants such as the Enhanced Training Support for SMEs and the SkillsFuture Enterprise Credit (SFEC). Employers who invest in qualifying staff training can apply to reclaim some costs through these schemes, partially offsetting their SDL payments.

**Employer Deductibility**

SDL is a deductible business expense for corporate income tax purposes.

**Penalties**

Failure to pay SDL attracts interest at 2% per month on the unpaid amount, plus potential prosecution. IRAS and the CPF Board have access to payroll data from multiple sources, making non-compliance easily detected.