Employer contribution for workforce training
The Skills Development Levy, or SDL, is a mandatory contribution paid by employers in Singapore. It funds national workforce training and development programmes, including SkillsFuture initiatives. Unlike CPF, SDL is paid entirely by the employer and is not deducted from the employee's salary.
SDL applies to all employees, including foreign workers on work passes. Understanding SDL helps you budget for the true cost of employment and stay compliant with Singapore regulations.
What SDL Funds
SDL contributions go to the Skills Development Fund, which supports:
- SkillsFuture programmes that help workers upgrade their skills throughout their careers.
- Workforce training grants for companies investing in employee development.
- Industry transformation initiatives to prepare Singapore's workforce for the future economy.
By contributing SDL, employers collectively fund a national ecosystem that benefits businesses and workers alike.
Who Pays SDL
SDL is an employer-only contribution. It applies to all employees working in Singapore, regardless of nationality:
- Singapore Citizens
- Permanent Residents
- Foreigners on Employment Pass, S Pass, Work Permit, and other work passes
This means you pay SDL for every employee on your payroll, not just local staff.
How SDL Is Calculated
SDL is calculated on each employee's total monthly wages:
- The levy rate is 0.25% of total monthly wages, worked out to the cent. For example, wages of $2,200 give an SDL of $5.50.
- There is a minimum contribution of $2 per employee per month, which applies to wages below $800.
- There is a maximum contribution of $11.25 per employee per month, which applies to wages above $4,500.
Each payslip shows the SDL for that employee to the cent. When you pay the CPF Board, the SDL for all employees is added up and the total is rounded down to the nearest dollar.
Employer Responsibilities
As an employer, you are responsible for:
- Calculating SDL for each employee based on their monthly wages.
- Paying SDL to the CPF Board along with your CPF contributions.
- Including all employees in SDL calculations, regardless of their nationality.
SDL is submitted together with CPF contributions through the same monthly submission process. You do not need to make a separate payment.
How Officaid Handles SDL
Officaid automatically calculates SDL for every employee when you process payroll. Whether your team includes locals, PRs, or foreign workers, Officaid applies the correct SDL amount based on their wages.
When you generate payslips and submit to CPF, the SDL amount is included automatically. You can see the SDL contribution in the employer contributions section of each payslip.
Frequently Asked Questions
No. SDL is paid entirely by the employer. It is an additional cost on top of the employee's salary and is not deducted from their wages.
Yes. SDL applies to all employees regardless of nationality, including those on Employment Pass, S Pass, and Work Permit.
CPF is a savings scheme with contributions from both employer and employee, and it only applies to Singapore Citizens and Permanent Residents. SDL is an employer-only levy that applies to all employees, including foreigners.
You cannot claim back SDL directly, but as an employer you can tap on training grants funded by the Skills Development Fund to offset employee training costs.
Official Resources
For more information on the Skills Development Levy, visit:
What's Next?
Learn about other employer obligations in Singapore:
- What is CPF covers the mandatory savings scheme for local employees.
- What is SHG explains Self-Help Group contributions.
- What is IRAS covers tax obligations for employers.