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How to Calculate SDL (Skills Development Levy)
How to Calculate SDL (Skills Development Levy) The Skills Development Levy (SDL) is a compulsory employer levy for employees working...
How to Calculate SDL (Skills Development Levy)
The Skills Development Levy (SDL) is a compulsory employer levy for employees working in Singapore. It applies in addition to CPF contributions and is collected by CPF Board on behalf of SkillsFuture Singapore Agency.
The SDL calculation is straightforward: calculate 0.25% of each employee’s monthly total wages, apply the minimum and maximum per employee, add all employees together, then round the total SDL payable down to the nearest dollar.
Who must pay SDL?
Employers need to pay SDL for all employees working in Singapore, including foreign employees. This is an employer levy, not a deduction from employee wages.
SDL rate and caps
| 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
Step 1: Calculate each employee separately
Take 0.25% of the employee’s monthly total wages. If the result is below $2, use $2. If the result is above $11.25, use $11.25.
Step 2: Add all employees together
Add the SDL payable for every employee in the month. Do this before rounding the final total.
Step 3: Round the total SDL down
CPF Board guidance says to round the total SDL payable down to the nearest dollar after summing the employees.
SDL calculation example
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 |
In this example, total SDL before final rounding is $29.50. The total SDL payable is rounded down to $29.
Common mistakes to avoid
- Do not deduct SDL from employee wages.
- Do not forget foreign employees.
- Do not round each employee down to a whole dollar before summing.
- Do not use CPF contribution rates to calculate SDL; SDL has its own formula.
Sources and latest checks
This guide was last reviewed in June 2026 against official CPF Board guidance. Always verify unusual employee cases against the official pages before payroll submission: CPF Board Skills Development Levy guide.
Is SDL paid by employer or employee?
SDL is paid by the employer. It is not deducted from the employee’s 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 maximum of $11.25 per employee per month.
Do I pay SDL for foreign employees?
Yes. CPF Board guidance states that SDL applies to all employees working in Singapore, including foreign employees.
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