The Skills Development Levy is payable for all employees rendering services in Singapore, including foreign employees, part-timers and those on short-term contracts. It funds the national skills development framework that supports training grants and subsidies.
How it is calculated
It is charged as a percentage of monthly remuneration, subject to a minimum and a maximum amount per employee per month. Because of the cap, it is a small and predictable cost for higher earners and a floor amount for low earners. It is collected alongside CPF contributions for employees who have them, which is why it often goes unnoticed as a separate item.
- Payable for every employee, not only citizens and permanent residents
- Applies to part-time and temporary staff as well as full-time
- Separate from CPF, though usually remitted together
Why it matters when hiring internationally
The amounts are modest, but the coverage is broader than employers expect, particularly the inclusion of foreign employees for whom no CPF is payable. A cost model that treats foreign hires as having no employer statutory cost beyond the levy for their pass will be slightly wrong, and the error is systematic rather than random.