Do you pay SDL for Employment Pass holders?

A company with only Employment Pass holders has no CPF to submit. Nobody on the payroll is a citizen or a permanent resident, so there is nothing to file.

Because the Skills Development Levy is normally collected together with CPF, the company assumes there is nothing else to pay.

That is where the problem starts.

SDL does not follow CPF

EP, S Pass and Work Permit holders do not attract CPF. SDL still applies, because it is due for every employee working in Singapore. Part-time, temporary and casual staff too.

The two levies feel like one thing because, for most companies, they arrive as one task.

The submission is what goes missing, not the decision

For a company with local staff, SDL goes out with the monthly CPF submission. Nobody has to think about it separately, and nobody ever decides to pay it.

Remove the local staff and there is no CPF submission. So the SDL payment does not happen either. Not because anyone chose to skip it, but because the thing it used to travel with has gone.

Nothing looks wrong in the meantime

There is no rejected filing. No warning letter. No gap on a statement anyone reads during the year.

Then SSG may follow up at year end, and by that point there can be months of levy to work out retrospectively. It is an easy payroll item to miss when there are no local employees, and it stays missed because nothing is designed to notice.

What to do about it

Check whether your company has made an SDL payment this year that was not attached to a CPF submission. If every payment you can find sits alongside CPF, and you have no local staff, the levy is probably not being paid.

The fix is not complicated once you have seen it. Working out several years of arrears afterwards is.

Enston HR handles payroll and work passes for small companies in Singapore. We’ll be writing about what we see.