What Is the Skills Development Levy?
The Skills Development Levy is a mandatory fee for companies to facilitate workforce training and skill development. If you work in Singapore, you automatically qualify for the SDL, regardless of your employment status.
The Skills Development Levy collection money is put into the Skills Development Fund, enabling the Singaporean government to create workforce upgrade programs and provide grants to employees.
Both the SDL and SDF are managed by the SkillsFuture Singapore Agency.
How Is the Skills Development Levy Calculated?
The Skills Development Levy payable should amount to 0.25% of your monthly wages. Once a company calculates the levy for all its employees, the total will be rounded to the next dollar.
However, you need to know a few things about calculating the Skills Development Levy.
- The lowest amount of SDL a company can pay for an employee is $2. That’s if you earn less than $800 a month.
- The highest SDL amount a company can pay for an employee is $11.25. This applies to employees earning above $4,500 a month.
You can also use the SDL Calculator to compute the total Skills Development Levy payable.
Who Must Pay the Skills Development Levy?
You’ll need to pay SDL for the following employees working in Singapore;
- All permanent, part-time, or casual employees.
- Employment pass holders or foreign employees working under a permit.
Who is Exempted from the Skills Development Levy?
Here are the notable exemptions from SDL payment;
- Chauffeurs, domestic employees, and gardeners are employed on personal terms.
- Employees who were overseas and didn’t render any services in Singapore within the payment month/bracket.
- Students.
If you fall under this category, you must submit a declaration of non-liability of SDL. Log in to the SDL website, indicate the reason for the declaration, and upload documents to support the claim.
Check out the most important documents to provide below.
- Work passes
- Employee contracts
- Salary slips
- Proof of overseas activity within the stated period
- Other documents that support the non-liability of SDL
How Can the Skills Development Levy Be Paid?
Here’s how to ensure you pay the SDL correctly and on time.
Create a CPF AXS Request
If your company operates with less than ten employees, creating a CPF AXS request will be most convenient.
Ensure to submit the SDL payment alongside the employees’ CPF at any AXS station.
Send an e-submission through CPF.
You can also use your Singpass login to make your company’s SDL payment and submit your employees’ CPF contributions.
Remember to input SDL payables for foreign employees, as the system automatically calculates the SDL for Singapore Citizens.
E-payment on the SDL Website
If your company only hires foreign employees, paying their SDL through the official website will be easy. That’s because they don’t need CPF contributions.
Use the e-payment option on SDL, which ensures the funds are directly transferred to the SkillsFuture Singapore Agency.
Cheque Payment to SDP
Cheque payment also applies to companies that only employ foreign workforce. When setting up the cheque transaction, don’t forget to include the following information;
- Company name
- SDL payment period
- Contact person and address
When to Pay the Skills Development Levy
You’re required to make the Skills Development Levy payment before the 14th day of the following month.
What Are the Penalties for Late Payment of the Skills Development Levy?
You’ll be faced with a 10%-per-year penalty on any outstanding SDL balances.
However, if you face challenges paying the total amount of SDL, you can negotiate an installment plan. Get in touch with SkillsFuture agents through their feedback portal.
You’ll need to give the total amount of SDL due, reasons for the outstanding SDL, and proposed instalment terms.
How to Always Ensure Skills Development Levy Compliance
The SkillsFuture Singapore Agency may send officials to conduct SDL-compliance audits on companies. It would be best if you were prepared with the following employee details within reach.
- Full name and Gender
- Age
- Physical Address
- Identity Card Number
- Rate and total SDL remuneration
- Employment commencement and cessation dates
How to get a Refund for the Excess Skills Development Levy Paid
The excess SDL paid will be refunded once your refund form is checked and approved! The
form asks you to fill in the refund amount, PayNow ID, and the period the excess payment was made.
The conditions for a refund are as follows;
- There must be solid proof of overpaid SDL within the request period.
- Refund requests can only be allowed if the Outstanding SDL Payable section reads a negative (-) value.
- Your records must reflect the refund period in the request. You’ll need to check the Outstanding DSL Payable section.
