What Do You Know about Skill Development Levy (SDL)?
Do you know? As an employer, on top of CPF contribution and Foreign Worker Levy, you are required to pay a mandatory levy for all your employees working in Singapore, and that would be Skill Development Levy (SDL). The SDL also includes foreign employees and employees employed on casual, part-time or temporary basis. Yet, domestic servants, gardener or chauffeurs are exempted from the SDL Act.
What is the purpose of SDL? Administered by the SkillsFuture Singapore Agency (SSG), all SDL collected are channelled to the Skills Development Fund (SDF) to support workforce upgrading programmes and also to provide training grants to employers when they send their employees to attend training under the national Continuing Education and Training system.
What is the total amount of SDL payable for employee? Under the SDL Act, you are required to contribute SDL for all your employees which includes full-time employees, part-time employees, temporary employees and foreign employees that rendering services wholly or partly in Singapore, up to the first $4,500 of each employee’s total monthly wages at a levy rate of 0.25% or a minimum of $2 (for an employee earning less than $800 a month), whichever is higher.
The total monthly wages include any salary, commission, bonus, leave pay, overtime pay, allowance and other payments in cash.
The table below shows an example of the calculation for SDL payable:
| Employee | Total wages for the calendar month | SDL Payable |
| A | $609.50 | $2.00
(Minimum of $2.00 is payable because the total wages is less than $800) |
| B | $2,000.00 | $5.00 |
| C | $4,500.00 | $11.25 |
| D | $4,502.03 | $11.25
(Maximum of $11.25 is payable because the total wages is more than $4,500) |
| E | $10,000.00 | $11.25
(Maximum of $11.25 is payable because the total wages is more than $4,500) |
| Total SDL | $40.75 | |
| Total SDL payable | $40.00 (rounded down to the nearest dollar) |
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Every company is required to pay exact amounts of salary to their employees within 7 days after the end of salary period according to the Singapore Employment Act. Subsequently, failing to comply will either be penalised or help responsible under the stated rule. Therefore, preparing salaries in a timely manner is crucial for all companies.
For more information on SDL, please refer to our Frequently Asked Questions (FAQ).
However, preparing employee’s salaries and filing statutory contribution is a complicated process that takes much effort and time besides being costly. That is why outsourcing payroll among the SMEs is getting more common and popular. By engaging services provider to handle your company’s payroll not only save cost, at the same time, you have more time to focus on your business development.
More information about payroll services is available at 3E Accounting, contact them today!
