What Is the Skills Development Levy (SDL)?

The Skills Development Levy (SDL) is a compulsory monthly levy every Singapore employer pays on top of CPF contributions — for every worker, local or foreign. It is 0.25% of monthly wages, floored at $2 and capped at $11.25 per worker, collected by the CPF Board for SkillsFuture Singapore.

Last reviewed 2 June 2026 · Rate source: SkillsFuture Singapore (SSG) & CPF Board.

Who actually pays SDL?

Unlike CPF, SDL is not limited to Singapore Citizens and Permanent Residents. You pay it for everyone who rendered services in Singapore that month — full-time, part-time, temporary, casual, and foreign staff on a Work Permit, S Pass or Employment Pass.

The one real exception is a genuine contractor. Someone engaged under a contract for service — a freelancer invoicing you — sits outside SDL, because their earnings are not "remuneration" under the SDL Act (SDL Act, Chapter 306). An employee under a contract of service is always in.

If a worker drew a wage from you under a contract of service this month, they almost certainly attract SDL.

What about yourself? If you draw a salary as a director under a service contract with your own company, that salary attracts SDL like any other employee's. Money you take out as a sole proprietor or partner is profit, not wages, so it carries no SDL — and no CPF either.

How much SDL do you pay?

SDL is 0.25% of an employee's total monthly wages, subject to a minimum of $2 and a maximum of $11.25. The cap is reached at $4,500 — 0.25% × $4,500 = $11.25 — so every higher earner costs you exactly the same.

Monthly wage	SDL payable	How it is derived
$500 (part-timer)	$2.00	Floor applies — 0.25% would be only $1.25
$800	$2.00	Break-even: 0.25% × $800 = $2.00
$1,200	$3.00	0.25% × $1,200
$3,000	$7.50	0.25% × $3,000
$4,500	$11.25	Cap reached: 0.25% × $4,500
$20,000 (director)	$11.25	Capped — no further scaling

The levy stops scaling at $4,500. Your $4,500 employee and your $20,000 director cost you the same $11.25 a month.

There is no separate proration for a mid-month joiner or leaver. SDL is simply 0.25% of whatever you actually paid that month, so a part-month wage already produces a part-month levy — a new hire who earned $1,500 in their first fortnight attracts $3.75, not a full-month figure.

Does SDL apply to bonuses and overtime?

Yes. SDL is charged on an employee's total wages for the month — basic pay plus overtime, commission, allowances and any bonus paid that month. A $4,000 salary in a month you also pay a $5,000 bonus has total wages of $9,000, already past the $4,500 cap, so the SDL is $11.25 that month regardless. Below the cap, the bonus simply lifts the 0.25% base.

SDL vs CPF — what is actually different

Employers conflate the two because both leave in the same submission. They cover different people and fund different things.

	SDL	CPF
Who it covers	Every employee, including foreign staff	Citizens and PRs only
Rate	0.25% of wages	Age-banded — see the CPF rates guide
Per-worker cap	$11.25 / month	Bound by the monthly Ordinary Wage ceiling
What it funds	SkillsFuture training (a shared pool)	The employee's own retirement savings
How it is paid	CPF EZPay, monthly	CPF EZPay, monthly (same submission)

The headline difference: CPF builds that worker's nest egg; SDL feeds a national training fund you can later draw from yourself.

SDL is not the Foreign Worker Levy

If you employ Work Permit or S Pass holders, you owe two separate things, and bosses routinely mix them up. SDL is the small, universal one — 0.25% of wages, capped at $11.25, paid for every worker including your locals. The Foreign Worker Levy (FWL) is the large, foreign-only one: a monthly charge of several hundred dollars per work-pass holder, set by your sector, the worker's skill category, and your dependency-ratio tier (the Ministry of Manpower sets the rates). Paying SDL does not discharge FWL — for a single Work Permit holder you pay both, every month.

When and how do you pay?

SDL is due monthly, together with your CPF contributions, through CPF EZPay, by the 14th of the following month — the same deadline as CPF. The CPF Board collects it and channels it to the Skills Development Fund — the pool that pays for SkillsFuture course subsidies and absentee payroll funding. Pay late and the Board enforces SDL exactly as it does late CPF: monthly interest accrues and composition fines are possible (CPF arrears, for reference, run 1.5% a month).

The rounding rule most people get wrong

SDL is not rounded employee by employee. You compute each worker's exact levy, sum the lot across your whole headcount, then round the total down to the nearest dollar — the CPF Board's prescribed method. Round each line first and you over-pay and break your reconciliation.

Here is a three-person café for a single month:

Employee	Monthly wage	Exact SDL
Manager	$4,800	$11.25 (capped)
Barista (full-time)	$2,400	$6.00
Barista (part-time)	$700	$2.00 (floor)
Total, exact		$19.25
SDL payable (rounded down)		$19.00

One table shows all three rules at once: the cap on the manager, the straight 0.25% on the full-timer, the floor on the part-timer, and the single round-down at the end.

What you get back for it

The fund you pay into is the same one that subsidises training for your own staff — course-fee grants, enhanced subsidies for SMEs, and absentee payroll funding while they are away learning. SDL is a cost, but it is also the tap your training dollars come out of.

Before your next payroll run, check that SDL is switched on for every active employee — especially your foreign workers, who sit outside CPF and are the ones most often missed.