Scope and Liability of SDL

Scope and Liability of SDL

• Who is liable to pay SDL?

  All employers are required to pay SDL for their employees.

  SDL is not payable for the following employees:

  • An employee who is a domestic servant, chauffeur or gardener wholly and exclusively employed by an individual outside of that individual’s trade, business, profession or vocation.
  • An employee who does not render any services in Singapore for at least a month. This excludes employees who are on leave for that month.

  For more details, you can refer to the question on exemptions below.

• Are ministries and statutory boards required to pay SDL for their employees?

  Yes, ministries and statutory boards are still required to contribute SDL for their employees.

• Do employers need to pay SDL for employees who are paid locally but work outside of Singapore?

  No, employers do not need to pay SDL for employees who render services outside of Singapore.

• Do employers need to pay SDL for foreign employees?

  Yes, employers need to pay SDL for foreign employees. This is in addition to any foreign employee levy payable to the Ministry of Manpower.

• Why do I have to pay both SDL and Foreign Worker Levy (FWL) for foreign employees?

  Both the SDL and FWL serve different purposes.

  SDL contributions are channelled to the Skills Development Fund which is used to build a national Continuing Education and Training (CET) system and provide financial assistance for employers to send their employees for training under the national CET system. Your foreign workers can benefit from the improvement of training facilities as well as the wide variety of courses available as SSG had used the moneys of the fund to improve the whole training ecosystem in Singapore.

  FWL is a levy imposed via the Ministry of Manpower for the administration of foreign workers with work permits.

• If an employer engages a third party agent to pay wages on its behalf to its (the employer's) employees, does the employer still have to pay SDL?

  Yes. For example, Company A has five employees and is liable to pay wages to those employees. Company A engages a third party agent, Company B, to pay wages to the five employees on its (Company A’s) behalf. There is no contractual relationship between Company B and the employees.

  In the above scenario, Company A is still required to pay SDL for the five employees, notwithstanding that the wages is paid by Company B on its behalf.

• Is SDL payable for directors or partners for the wages paid to them?

  SDL is payable on directors’ wages if the director is an employee of the company. SDL is also payable on the wages paid to the employee(s) employed by the partnership.

  However, SDL is not payable on the fees paid to its directors or wages paid to its partners.

• Is a self-employed person required to pay SDL on account of his earnings from his business?

  No, self-employed persons such as taxi drivers and hawkers do not need to pay SDL on account of the earnings from their business. However, the self-employed person has to pay SDL for any employees they hire.

• Which categories of employees or workers are exempted from SDL?

  SDL is not required for:

  • An employee who is a domestic servant, chauffeur or gardener wholly and exclusively employed by an individual outside of that individual’s trade, business, profession or vocation.

  • An employee who does not render any services in Singapore for at least a month. This excludes employees who are on leave for that month.

  • A matriculated or registered student of any of the following institutions, who is employed for the training, such as internship, approved by the institution in question:
    1. Institute of Technical Education
    2. Nanyang Polytechnic
    3. Nanyang Technological University
    4. National University of Singapore
    5. Ngee Ann Polytechnic
    6. Republic Polytechnic
    7. Singapore Institute of Technology
    8. Singapore Management University
    9. Singapore Polytechnic
    10. Singapore University of Social Sciences
    11. Singapore University of Technology and Design
    12. Temasek Polytechnic
  • A matriculated or registered student of any overseas tertiary education institution who is required by the institution to undergo training in Singapore for a period of not more than 6 months. The exemption of SDL is subject to the condition that the employer of the student submits to SkillsFuture Singapore (SSG) a letter issued by the overseas tertiary education institution which confirms that:
    1. The student is a matriculated or registered student of the institution; and
    2. The student is required by the institution to undergo training in Singapore such as internship.
  • A registered student (other than a student who has completed his “A” level examinations) of any school registered under the Education Act (Cap. 87) and who is employed during the gazetted school holidays.
  • Students of Government schools, excluding tertiary institutions, working during their scheduled school holidays.
  • ‘N’ & ‘O’ level Government school students working during the scheduled school holidays.
  • ‘A’ level students working during scheduled school holidays before their “A” level examinations.

  Please submit a declaration/NOO of your computed monthly SDL payable excluding these exempted employees for the relevant months where your records differ from SSG. Please retain all supporting documents as SSG may request to review them.

• Do employers need to pay SDL for part-time employees?

  Yes, SDL is payable for both full-time and part-time employees including employees on temporary contract.

• Do employers need to pay SDL for employees whose length of employment is less than a month?

  Yes. SDL is payable for employees whose length of employment is less than a month.

  The exemption made for such employees is no longer in force.

• Can employers be exempted from paying SDL if they are not tapping on SDF training assistance?

  No. The collection of SDL and the disbursement of SDF training assistance are separate matters.

  SDF training assistance is given as financial incentives for employers to upgrade their workers’ skills. The SDL payment by an employer is not tied to the amount of funding the employer can obtain from SDF to train its workers. For details on SDF funding, please visit the SkillsFuture Singapore (SSG) website.

• If there's a change in the shareholders of a company, or a change in the partners of a limited liability partnership (LLP), is the company or LLP required to pay the outstanding SDL?

  Yes, companies and LLPs have legal personalities separate from those of its shareholders or partners. The company or LLP is still required to pay any outstanding SDL, regardless of changes in shareholders or partners.

• What types of payment by employers are subject to SDL?

  You can refer to this list of various payment types and whether they are subject to SDL.