# The levy that covers everyone

URL: https://skillsforce.com.sg/insights/skills-development-levy-sdl-singapore-employers
Title: Skills Development Levy (SDL) for Singapore employers | Skillsforce
Description: Most employers think SDL is a smaller CPF. It is not: it covers foreign staff CPF never touches, and the agency behind it just changed.
Updated 06 August 2026. First published 06 August 2026. Author: Skillsforce (People-operations team)
Category: payroll-cpf

Most employers file Skills Development Levy every month without ever reading what it actually is. It is not a CPF add-on for local staff. It covers every employee working in Singapore, foreign work-pass holders included, and as of 1 July 2026 it is administered by an agency most guidance still gets wrong.

## What is the Skills Development Levy and who does it cover?

SDL is a compulsory levy of 0.25% of an employee's monthly total wages, minimum S$2 and maximum S$11.25, paid alongside CPF via CPF EZPay. It covers every employee working in Singapore, including foreign work-pass holders, with only two narrow exemptions. CPF Board collects it as agent for the Skills and Workforce Development Agency (SWDA).

## Key points

- SDL covers every employee working in Singapore, foreign work-pass holders included. That is the fact almost every employer misses, because CPF itself does not apply to them.
- The rate is 0.25% of monthly total wages, with a floor of S$2 for wages under S$800 and a ceiling of S$11.25 for wages above S$4,500.
- Only two exemptions are confirmed: domestic staff in private households, and overseas-tertiary students on short Singapore training placements with a supporting institutional letter. Nothing else is exempt.
- SDL is paid together with CPF through the same CPF EZPay submission, on the same monthly cycle. There is no separate filing to remember.
- From 1 July 2026, CPF Board collects SDL as agent for the Skills and Workforce Development Agency (SWDA), a new statutory board formed by merging SkillsFuture Singapore and Workforce Singapore. Content still naming SkillsFuture Singapore as the fund administrator is out of date.
- The one SDL offence confirmed to a specific section is giving false information under section 11: a penalty equal to the unpaid levy plus a fine of up to S$2,500 and/or up to 6 months' imprisonment.

Skills Development Levy is payable for every employee working in Singapore, foreign work-pass holders included. CPF is not. An Employment Pass holder attracts no CPF from either side, and still costs you SDL every month, for as long as they are on your payroll.

That difference in coverage is where most SDL errors start, and it is worth stating plainly, once, before anything else here: SDL is not a CPF add-on for local staff. It is a separate, broader levy that happens to travel alongside CPF on the same monthly submission.

## What the Skills Development Levy actually is

SDL is imposed under the [Skills Development Levy Act 1979](https://sso.agc.gov.sg/Act/SDLA1979), a piece of legislation most employers have never had reason to open, because CPF Board handles the filing for them inside the same CPF EZPay submission used for CPF contributions. It is a levy on employment, not a tax on the employee, and the employer bears it directly rather than deducting it from wages.

Total monthly wages for SDL purposes take in the general shape of what an employee is paid for their work: basic salary, overtime, allowances, commissions, bonuses and other cash payments for services rendered. If a specific payment type is borderline, such as a one-off relocation allowance, that is worth a direct check rather than an assumption, since the itemised boundaries of "total wages" are less precisely published than the headline rate.

The mechanics matter more than the amount, at least at first. SDL rarely shows up as a line item anyone budgets around, because on any individual salary it is small. Its cost is in the coverage gap it exposes, not the sum itself.

## Who it is payable for

Coverage is the part almost everyone gets wrong: SDL is a compulsory levy an employer pays for all employees working in Singapore, including foreign employees. CPF, by contrast, is payable only for Singapore Citizens and Permanent Residents earning more than S$50 a month. Someone on an Employment Pass, S Pass or Work Permit generates no CPF contribution at all, and it is easy to let that fact quietly generalise into "no statutory cost beyond the levy and quota" for foreign staff. SDL breaks that assumption. If this is your first foreign hire, SDL is one line item that applies to them even though CPF does not.

[Only two exemptions are confirmed](https://file.go.gov.sg/sdl-generic-faq.pdf), and both are narrow. The first covers domestic servants, gardeners or chauffeurs employed in a private household. The second covers a matriculated or registered student of an overseas tertiary institution, on a Singapore training placement of no more than six months, provided the employer submits a letter from that institution confirming the student's status. That is the complete list. Part-time staff, casual staff and short-term contractors are not exempt as categories; if someone is working for you in Singapore and does not fall into one of the two exceptions above, SDL applies to them.

## How much is the Skills Development Levy?

The [Skills Development Levy rate is 0.25%](https://www.cpf.gov.sg/employer/employer-obligations/skills-development-levy) of an employee's monthly total wages, with a floor and a ceiling either side of it. Wages under S$800 a month attract the minimum, S$2. Wages above S$4,500 a month attract the maximum, S$11.25. Between those two points, the levy simply scales with the rate: an employee earning S$3,000 a month in total wages costs 0.25% of that, S$7.50, comfortably inside the band. The arithmetic is the same for a Singapore Citizen, a Permanent Resident, or an Employment Pass holder; SDL does not vary by citizenship the way CPF does.

Across a whole team the total stays modest, because the ceiling binds quickly: no single employee costs more than S$11.25 a month in SDL, however much they earn. That is exactly why the levy is so easy to overlook, and why the coverage question above matters more than the rate itself. Missing a foreign employee from the SDL calculation entirely is a bigger error than any rounding on the amount, and no aggregate figure quoted for "a company your size" will tell you as much as running the rate across your own payroll.

## How and when it is paid

SDL is paid together with CPF contributions, in the same submission, on the same monthly cycle, through CPF EZPay. There is no separate portal, no separate deadline, and no separate filing to track. Inside that submission, CPF EZPay auto-computes SDL for Singapore Citizens and Permanent Residents from the wage figures already entered. For foreign employees, since CPF is not being calculated for them at all, SDL has to be keyed in manually, which is exactly the step a busy payroll run skips when nobody has been told it exists. Our guide to [submitting CPF contributions](/insights/how-to-submit-cpf-contributions-singapore) covers the mechanics of the wider submission this sits inside.

## Who actually administers it now, and why that changed

CPF Board collects SDL as agent, and as of 1 July 2026 the agent it collects for is the [Skills and Workforce Development Agency](https://www.mom.gov.sg/newsroom/press-releases/2026/0505-factsheet-on-swda), SWDA for short. This is not a rebrand of an existing body. SWDA is a genuinely new statutory board, formed by merging SkillsFuture Singapore (SSG) and Workforce Singapore (WSG), with the SSG and WSG Acts repealed and consequential amendments made to the Skills Development Levy Act itself. The Bill establishing SWDA had its First Reading in Parliament on 8 April 2026 and passed on 5 May 2026, with the new board taking effect on 1 July 2026.

The change is just over a month old at the time of writing, and most content on this topic still names SkillsFuture Singapore as the body the levy funds. That description is now out of date. If you are updating internal documentation or a payroll policy that references SSG by name, this is the line to correct.

## What it funds

SDL feeds the Skills Development Fund, which supports workforce upgrading programmes and training grants. It is, in that sense, the one statutory payroll cost with a direct line back to something an employer might actually use: training subsidies and grants that draw on the same fund the levy pays into, now run through SWDA rather than through SSG alone. Framed that way, SDL sits closer to an enforced training contribution than to a tax with nothing coming back for it, even though the connection between what one employer pays in and what any single employer draws out is not one-to-one.

## What happens if you do not pay

The Skills Development Levy Act's own enforcement provisions are narrower and less publicised than CPF's. The one offence this article can cite to a specific section is section 11: giving false information about SDL liability, negligently or without reasonable excuse, carries a penalty equal to the unpaid levy plus a fine of up to S$2,500 and/or imprisonment of up to 6 months. A separate provision covers obstructing the Agency or its officers in the course of their SDL duties. Beyond those two, treat non-payment as a compliance matter to fix immediately rather than a figure to plan around: no specific late-payment percentage or fixed penalty for plain non-payment is confirmed, and figures circulating online for either are not reliable enough to repeat here.

What is certain is that SDL rides on the same monthly submission as your CPF contributions, so an employer who falls behind on CPF is, almost by definition, falling behind on SDL at the same time. The interest, composition and prosecution mechanics that apply to CPF lateness, covered in [the CPF late payment penalty](/insights/cpf-late-payment-penalty-singapore), already give an employer plenty of reason to keep the whole monthly submission current rather than treating SDL as the smaller, safer part of it. Treat a missed SDL entry the same way you would treat a missed CPF one: fix it in the next submission, and do not wait for a reminder that may not come.

SDL is one line in a wider recurring calendar: monthly CPF and SDL together, annual AIS filing, and event-triggered obligations like IR21, mapped in full in our [payroll compliance calendar](/insights/singapore-employer-payroll-compliance-calendar). Keeping track of agency renames and levy floors is, admittedly, exactly the sort of detail [payroll processing](/services/payroll) exists to absorb, so that nobody on your team has to notice SWDA replaced SSG in the middle of a Tuesday.

## Frequently asked questions

### Do I need to pay SDL for foreign employees?

Yes. Unlike CPF, which applies only to Singapore Citizens and Permanent Residents, SDL is payable for every employee working in Singapore, including Employment Pass, S Pass and Work Permit holders. It is the single most common SDL mistake employers make.

### How much is the Skills Development Levy?

0.25% of an employee's monthly total wages. The minimum payable is S$2, for wages under S$800 a month; the maximum is S$11.25, for wages above S$4,500 a month. Between those points, the levy scales with the 0.25% rate.

### Who administers the Skills Development Levy now?

CPF Board collects SDL as agent for the Skills and Workforce Development Agency (SWDA), a statutory board formed on 1 July 2026 by merging SkillsFuture Singapore and Workforce Singapore. Content describing SkillsFuture Singapore as the current administrator is now out of date.

### Is anyone exempt from paying SDL?

Only two categories are confirmed: domestic servants, gardeners or chauffeurs employed in a private household, and matriculated students of an overseas tertiary institution on a Singapore training placement of up to 6 months, supported by a letter from that institution. No other exemption is confirmed.

### Do I need to pay SDL for part-time staff?

Generally yes. SDL covers employees working in Singapore, and the confirmed exemptions are the two narrow categories above, neither of which is "part-time" as a category. Do not assume a part-time or casual role is exempt without checking it against those two exceptions.

### How is SDL paid?

Together with CPF contributions, in the same monthly CPF EZPay submission. There is no separate portal or filing date. CPF EZPay auto-computes SDL for Singapore Citizens and Permanent Residents; for foreign employees, it is keyed in manually.

## Sources

- [CPF Board: Skills Development Levy](https://www.cpf.gov.sg/employer/employer-obligations/skills-development-levy) (Accessed 4 August 2026)
- [SkillsFuture Development Levy generic FAQ (PDF)](https://file.go.gov.sg/sdl-generic-faq.pdf) (Accessed 4 August 2026)
- [Skills Development Levy Act 1979 (Singapore Statutes Online listing)](https://sso.agc.gov.sg/Act/SDLA1979) (Accessed 4 August 2026)
- [MOM: Factsheet on the Skills and Workforce Development Agency (SWDA)](https://www.mom.gov.sg/newsroom/press-releases/2026/0505-factsheet-on-swda) (Published 5 May 2026; SWDA established 1 July 2026)

## Related

- [Payroll compliance calendar](https://skillsforce.com.sg/insights/singapore-employer-payroll-compliance-calendar)
- [CPF late payment penalty](https://skillsforce.com.sg/insights/cpf-late-payment-penalty-singapore)
- [How to submit CPF contributions](https://skillsforce.com.sg/insights/how-to-submit-cpf-contributions-singapore)
- [Payroll processing](https://skillsforce.com.sg/services/payroll)