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5 Things Every Entrepreneur Should Know About SDL (Skills Development Levy)

1. What is SDL?

In its simplest terms, the Skills Development Levy is a levy imposed by the Singaporean Government to create a source of funding for grants applied by employers to upgrade their employees under the national Continuing Education and Training system. Singapore’s Skillsfuture SG initiative was created to improve and leverage on the nation’s best resource: human talent. The pool of funds which subsidize those upgrading courses primarily come from the SDL.

2. Do all employers need to pay for the SDL?

Under the Singapore Law, all employers are required to pay SDL. According to the Skills Development Levy Act (Chapter 306), an ‘employer’ is a person (or entity) who pays or is liable to pay any remuneration to an employee.

However, there are two main exceptions:

  • An employee who employed solely as a domestic servant, chauffeur or gardener and does not have any part to play in the employer’s profession
  • An employee who does not render any services in Singapore within a month. This excludes employees who are on official leave from their job.

3. How do I calculate SDL for my employees?

Here is an example, courtesy of the official SDL website, on how to calculate the total SDL payable:

Employee Monthly Remuneration SDL Payable Remarks
A $150.80 $2.00 Minimum of $2 is payable for those less than $800
B $609.50 $2.00 Minimum of $2 is payable for those earning less than $800
C $2,000.00 $5.00 0.25% of monthly remuneration
D $4,500.00 $11.25 0.25% of monthly remuneration
E $4,502.03 $11.25 SDL is on the first $4,500 only
F $10,000.00 $11.25 SDL is on the first $4,500 only
Total $42.75
Total SDL Payable $42.00 Rounding down is done at the total for the whole organisation and not on each employee.

Alternatively, here is a calculator you can use.

4. Do employers need to pay SDL for their foreign employees?

Yes they do! The is no distinction between foreign and local employees under the definition of ‘employee’ in the Skills Development Levy Act (Chapter 306)

5. What if my SDL payments are late?

Unfortunately there will be a penalty of 10% per annum for any amount outstanding, under the SDL regulations.

With the advent of new initiatives and laws, we understand that keeping tabs on the changes can be a prominent issue, especially when penalties are involved. Upcoming regulatory compliant Human Resource software services in Singapore aim to automate calculations and simplify everything HR related for you so you can focus on growing what truly matters: your business.

Still not convinced? Find out why automating your employee database could be the best thing you’ll do for your business this year!

Find out how you can do it all with Payboy

Reach out to us if you are keen for a free demo on how we can help you save hours and give you some peace of mind on payroll and other HR matters so that you can focus on your business and people.
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