Skills Development Levy Amended

In the 2008 budget, the Singapore government has proposed several amendments to the Skills Development Levy for Individuals.

Current (Prior to Budget 2008)

Employers contribute a Skills Development Levy (SDL) to the Skills Development Fund (SDF) of 1% of the gross salary or $2, whichever is greater, for employees earning a monthly gross salary of $2,000 or less.

Changes to Skills Development Levy

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

Technical / Business Considerations of Skills Development Levy

The change will be welcomed by smaller businesses that generally have more low wage employees. Businesses having employees with a monthly gross salary of more than $2,000 may face an increase in their SDL contribution.

Depending on the staff mix, the additional costs to be incurred resulting from the increase in the number of employees who require SDL contributions may in turn be offset by the lower levy rate, as illustrated in the table below.

Employee salary	SDL contribution prior to the change	SDL contribution after the change
$2,000	$2,000 X 1% = $20.00	$2,000 X 0.25% = $5.00
$4,500	$0	$4,500 X 0.25% = $11.25
Total	$20.00	$16.25

Contact Us at PayrollServe

To get detailed advice on the eligibility & claim of the amended Skill Development Levy scheme, get in touch with our experienced Payroll Consultants in Singapore at PayrollServe.