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How to Calculate SDL (Skills Development Levy)
The Skills Development Levy, or SDL, is a compulsory employer levy for employees working in Singapore. It is collected by...
The Skills Development Levy, or SDL, is a compulsory employer levy for employees working in Singapore. It is collected by CPF Board on behalf of SkillsFuture Singapore Agency.
SDL is an employer cost. It should not be deducted from employee wages.
Who Must Pay SDL?
Employers generally need to pay SDL for employees working in Singapore, including foreign employees.
Payroll should include SDL checks for:
- Full-time employees.
- Part-time employees.
- Temporary employees.
- Foreign employees working in Singapore.
- Employees with low wages where the minimum SDL applies.
SDL Rate And Caps
SDL is calculated per employee using monthly total wages.
| Monthly total wages per employee | SDL payable per employee |
|---|---|
| Less than $800 | $2 minimum |
| $800 to $4,500 | 0.25% of monthly total wages |
| More than $4,500 | $11.25 maximum |
How To Calculate SDL
- Calculate monthly total wages for each employee.
- Multiply wages by 0.25%.
- Apply the $2 minimum where wages are below $800.
- Apply the $11.25 maximum where wages are above $4,500.
- Add SDL for all employees.
- Round the total SDL payable down to the nearest dollar, if applicable under the CPF Board workflow.
Examples
Employee | Monthly total wages | SDL before total rounding | Reason |
|---|---|---|---|
A | $609.50 | $2 | Minimum applies because wages are below $800 |
B | $2,000 | $5 | 0.25% of $2,000 |
C | $4,500 | $11.25 | 0.25% of $4,500 |
D | $10,000 | $11.25 | Maximum cap applies |
Common Mistakes
- Deducting SDL from salary.
- Forgetting SDL for foreign employees.
- Applying CPF rates instead of the SDL formula.
- Forgetting the per-employee minimum and maximum.
- Not reconciling SDL after payroll adjustments.
Source To Verify
Check CPF Board or SkillsFuture Singapore guidance before finalising payroll. SDL rules are exact payroll rules, so do not rely on memory if payroll software values look unusual.
Frequently Asked Questions
Is SDL paid by employer or employee?
SDL is paid by the employer. It should not be deducted from employee wages.
What is the SDL rate in Singapore?
SDL is 0.25% of monthly total wages for each employee, subject to a minimum of $2 and a maximum of $11.25 per employee per month.
Do employers pay SDL for foreign employees?
Yes. SDL generally applies to all employees working in Singapore, including foreign employees.
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