The Skills Development Fund (SDF) was established in October 1979 with the institution of the Skills Development Levy (SDL) Act with the primary objective of encouraging employers to invest in skills upgrading of the workforce.

The SDF does this by offering assistance as an incentive to companies to mount training programmes for employees.

Incentives are offered on the basis of a cost-sharing principle and the training must be relevant to the economic development of Singapore. The amount of incentives that a company can obtain is not tied to the levy contribution.

Skills Development Levy (SDL)
Under the Skills Development Levy (SDL) Act (Cap. 306), it is a statutory requirement for employers to make SDL contributions for employees who fall within the salary ceiling for levy contributions. With effect from 1 September 2005, the salary ceiling for SDL contributions is $2,000. The levy rate is 1% and a minimum of $2 is payable where the remuneration is less than $200.

The SDL is payable for all employees whose gross remuneration** is less than or equal to the salary ceiling. The SDL is also payable for employees such as casual, part-time, temporary and foreign workers rendering services wholly or partly in Singapore.

With effect from 1 October 2008, SDL contribution is payable by employers for all employees up to the first $4,500 of gross monthly remuneration at a reduced levy rate of 0.25% or $2, whichever is higher.

Payments for the SDL should be made by the 14th day of the following month to the Central Provident Fund (CPF) Board, which is our authorised collection agency, together with other payments. A penalty of 10% per annum will be imposed on the outstanding amount for late payment. In addition, employers who give false and/or misleading information relating to the payment of the levy, or who contravene the provisions of the Act or Regulations shall be liable, if convicted, to a fine or imprisonment or both.

The SDL collections are credited to the Skills Development Fund (SDF). Under the administration of the Singapore Workforce Development Agency (WDA), the Fund provides various incentive schemes to companies to upgrade the skills of their employees.

*"Remuneration" means any wage, salary, commission, bonus, leave pay, overtime pay, allowances (including housing or other like allowances) and other emoluments paid in cash.

Example of SDL computation (up to September 2008):

Employee	Gross Monthly Remuneration	SDL Payable
A	$150.80	Min of $2.00 is payable
B	$609.50	$6.10
C	$1,390.00	$13.90
D	$1,970.80	$19.71
E	$2,000.00	$20.00
F	$2,005.00	$0.00
		$61.71

Total SDL Payable is $61.00. Cents should be ignored only when you arrive at the total SDL payable.
For more details on SDL, please click here.

Example of SDL computation (with effect from 1 October 2008):