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Payroll Singapore: Understanding the Skill Development Levy (SDL)

Learn what the Skill Development Levy (SDL) is in Singapore, how it’s calculated, and why it matters for payroll compliance.

What is the Skill Development Levy (SDL)?

The Skill Development Levy (SDL) is a compulsory levy that you have to pay for all your employees working in Singapore, including foreign employees. This is in addition to your monthly CPF contributions. CPF Board collects SDL on behalf of the SkillsFuture Singapore Agency (SSG). 

Purpose of the Skill Development Levy

How SDL supports workforce training

SDL is used to support workforce upgrading. The SDL collected is channelled to the Skills Development Fund, which is used to support workforce upgrading programmes and to provide training grants to you when you send your employees for training under the National Continuing Education Training system.

How to compute the total SDL payable?

SDL is calculated based on the employee’s total monthly remuneration, including salary, allowances, bonuses, and commissions.

SDL contribution rates

The SDL contribution rates are as follows:

  • 0.25% of the monthly remuneration

  • Minimum contribution: $2

  • Maximum contribution: $11.25 per employee per month

Examples of SDL computation

  • If an employee earns $800 per month:
    SDL = $800 × 0.25% = $2.00

  • If an employee earns $5,000 per month:
    SDL = $5,000 × 0.25% = $12.50, but the contribution is capped at $11.25

Rounding rules for SDL

The total SDL contribution calculated for each employee is then rounded down to the nearest dollar.

SDL contributions in Payroll Reports from BrioHR

Once the payroll cycle has been completed, you can download a Payroll Report from the system. In this report, you may notice slight differences in the amounts shown, as illustrated in the screenshots below. This is because the system automatically rounds down the total SDL contribution.

Actual SDL contribution amount :

Rounding rule automatically applied : 

 

For more information on the Skill Development Levy (SDL), employers can refer to the official Central Provident Fund Board website or the SkillsFuture Singapore (SSG) website.

 

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