Skills Development Levy (SDL) in Singapore: A Guide for HR Professionals
Updated on 08 January 2026 in Business | Suki Bajaj
Ever wondered what the "Skills Development Levy" on an employee's payslip truly means for your HR operations? It's more than just a salary deduction – it's a strategic investment in your workforce.
This guide will clarify everything you need to know about the Skills Development Levy in Singapore, from accurate SDL calculations to leveraging the very funds it generates for your team's growth.
Key Takeaways:
- The SDL is a compulsory monthly levy for all employees working in Singapore, including foreign, part-time, and temporary staff.
- Employers must pay 0.25% of an employee’s monthly wages, with a minimum payment of S$2 for employees earning less than $800 per month.
- The maximum payment is S$11.25 for employees earning more than $4,500 per month.
- Contributions must be paid within 14 days from the end of each month to avoid a 10% annual late payment penalty and potential loss of grant eligibility.
In this guide, we’ll talk about:
Is Skills Development Levy (SDL) Compulsory in Singapore?
The Skills Development Levy (SDL) is a mandatory levy that employers must pay for all their employees working in Singapore, including foreign workers.
This is in addition to your regular monthly CPF contributions and is collected by the CPF Board on behalf of the SkillsFuture Singapore (SSG) Agency.
The funds collected through the SDL are channelled into the Skills Development Fund (SDF), supporting initiatives aimed at enhancing the skills of the workforce.
It provides training grants to employers who send their employees for training programs under the National Continuing Education Training (CET) system, facilitating workforce upgrading and development across various industries.
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Who Is Liable to Pay the Skills Development Levy?
Employers are required to pay skills development levy contributions for:
- All employees rendering services in Singapore: This includes both local and foreign employees.
- All employment types: Whether employees are full-time, casual, part-time, or temporary.
Skills Development Levy Exemptions
SDL is not payable for the following types of employees:
- An employee who is a domestic servant, chauffeur or gardener employed by an individual solely for personal use, outside of their trade, business, profession, or vocation.
- An employee who doesn't provide any services in Singapore for at least one full month. This does not include employees who are on leave for that month.
How To Calculate SDL Contributions?
Here’s how to calculate how much skills development levy to pay every month:
Step 1: Compute SDL for each employee
- The levy is 0.25% of each employee's total monthly wages.
- There's a minimum payment of $2 for employees earning less than $800 per month.
- The maximum payment is $11.25 for employees earning more than $4,500 per month.
Step 2: Sum up the total SDL for all your employees
- Add the individual SDL amounts for each employee.
- Round the total amount down to the nearest dollar.
You may also use the Skills Development Levy Calculator to ensure accurate SDL contributions.
How To Pay Skills Development Levy?
Employers have two primary methods for paying the Skills Development Levy (SDL): via CPF EZPay or directly through the GoBusiness platform.
Pay SDL Together with CPF Contributions
Most employers can pay SDL along with their CPF contributions using CPF EZPay. This method offers an auto-computation feature that calculates the SDL payable for Singapore Citizen and Singapore Permanent Resident employees based on their wage information.
However, for the Skills Development Levy for foreigners, employers must manually input the SDL payable in CPF EZPay.
Each transaction through CPF EZPay allows for payment for only one month at a time. Payments made via the CPF Board are typically reflected in the SkillsFuture Singapore (SSG) records within two months.
Pay SDL Directly to SSG If You Only Hire Foreign Employees
Employers who exclusively hire foreign employees, or those making back-payments, should pay SDL directly through the SDL payment service on GoBusiness.
This platform offers different processing times based on the payment method:
- Offline payments (PayNow or Bank Transfer) made via GoBusiness are usually reflected in SSG's records within two weeks.
- Online payments (Stripe - Credit Card) made via GoBusiness are processed much faster, reflecting in SSG's records within two days.
If you've received a Notice of Assessment (NOA) or an SDL Letter from SSG, always remember to make payments for the specified periods via GoBusiness, ensuring you select the relevant month(s) indicated in the notice.
FAQs on Skills Development Levy (SDL)
Employers are required to pay the Skills Development Levy in Singapore within 14 days from the end of each month.
The Skills Development Levy Regulations, enacted under the Skills Development Levy Act 1979, stipulate a late payment penalty of 10% per annum on the outstanding amount.
Beyond financial penalties, late payment may also impact your organisation's eligibility for funding support from SkillsFuture Singapore (SSG), potentially hindering access to valuable training grants and initiatives.
If you have overpaid your SDL, you can submit a refund request directly to SkillsFuture Singapore (SSG).
To initiate this process, please log in to your GoBusiness Dashboard and navigate to the SDL refund request service. Ensure all necessary documentation is prepared to facilitate a smooth refund process.
Employers are obligated to make back-payments for the entire period of non-payment or underpayment. You can promptly make these payments through the SDL payment service available on the GoBusiness platform.
Keep in mind to carefully select the "Relevant Month(s)" for which the back-payment is being made to ensure accurate crediting.
If you received a Notice of Assessment (NOA) or an SDL Letter from SSG, please make your SDL payments via GoBusiness by selecting the specific period(s) indicated in the NOA or SDL letter.
While closely related, the Skills Development Levy (SDL) is the mandatory contribution collected from employers.
The Skills Development Fund (SDF), on the other hand, is the fund into which these SDL contributions are channelled.
How Can a Payroll Software Help You With SDL?
As your company expands, managing SDL for a growing workforce can quickly escalate from tedious to a full-blown administrative challenge. But what if there’s a way to simplify this process?
Here's how our QuickHR Payroll Software in Singapore streamlines your SDL contributions:
- System-Tailored CPF Formulations fully compliant with the latest CPF rules and aligned with your company's specific requirements.
- Auto SDL Deductions in line with the latest SDL contribution rates and regulations.
- Seamless Bank GIRO and CPF Submission guarantees on-time contribution payments.
- Refund Support to efficiently process relevant refunds, should they be needed.
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