Beyond CPF, Quickly: SDL & SHG for New Founders
A 4-minute read for founders who’d rather be building than reading compliance guides.
You’ve just understood CPF — nice work. Two more monthly payments are coming up: the Skills Development Levy (SDL) and Self-Help Group (SHG) contributions.
Neither is complicated, and both take only minutes once set up. Here’s the short version.
What is SDL & SHG?
| Skills Development Levy (SDL) | Self-Help Group (SHG) |
|---|---|
| A monthly levy paid by the employer on top of wages — for every employee, local or foreign. | A monthly contribution deducted from the employee's wages and passed to their community fund. |
| Rate: 0.25% of wages — minimum $2, maximum $11.25 per employee per month. | Amount varies by fund (CDAC, ECF, MBMF, or SINDA) and the employee's wage level. |
| Funds SkillsFuture training grants that employers can later claim for staff upskilling. | Supports four self-help groups that uplift lower-income households within specific communities. |
- SDL is paid by the employer for every employee, local or foreign — 0.25% of wages, $2 minimum, $11.25 maximum.
- SHG is deducted from employee wages, not yours — sent to one of four community funds based on race or religion.
- Both are paid together with CPF EZPay. If your team is all foreign, pay SDL directly to SSG instead.
- No employees yet, or on director's fees only? Neither applies to you — yet.
Does this even apply to you yet?
Short answer: only once someone is on a regular payroll.
SDL and SHG apply to anyone — you included — who is hired under a work contract and receives a salary. No employees yet? Nothing to pay, nothing to deduct.
That first employee could be:
-
- Your first hire.
- Once you start drawing a salary from the company.
- A part-timer or temp — the work contract matters, not the hours worked.
One timing note: the obligation starts the same month the first salary is paid, not when the work contract is signed. So if someone starts on 1 November but their first paycheck is on 30 November, SDL and SHG are due for November.
SDL: The Employer’s Share
What & how much
A monthly fee you pay for every employee, local or foreign, at 0.25% of wages. It supports SkillsFuture training grants you can claim later, so it is not just an extra cost.
| Monthly wages | SDL payable |
|---|---|
| $800 or less | Nil |
| $801 – $4,500 | 0.25% of wages (min $2.00) |
| Above $4,500 | $11.25 flat (capped) |
When & How to Pay
Payment is due within 14 days of the end of each month. Have local staff? SDL is included automatically with your CPF EZPay submission — just add any foreign employees manually on the same page.
All-foreign team? Pay SSG directly. If you miss the deadline, you will incur a 10% annual penalty.
Which SHG Fund Should Your Employees Contribute to?
Chinese Development Assistance Council (CDAC) Fund
Who qualifies: Employees identified as Chinese on their Identity Card (IC).
Applies to: Singapore Citizens and Permanent Residents only.
Mosque Building & Mendaki Fund (MBMF)
Who qualifies: Employees who are Muslim, regardless of race.
Applies to: Singapore Citizens, Permanent Residents, and foreign employees — the broadest eligibility of the four funds.
Note: A Muslim employee who is also Chinese or Indian contributes to MBMF in addition to their respective community fund (CDAC or SINDA).
Singapore Indian Development Association (SINDA) Fund
Who qualifies: Employees identified as Indian on their Identity Card (IC)
This includes:
Bangladeshi, Bengali, Parsee, Sikh, Sinhalese, Pakistani, Sri Lankan, Tamil, Telugu, Punjabi, Gujarati, Sindhi, Goanese, and Malayalee descent, and all others originating from the Indian subcontinent.
Applies to: Singapore Citizens, Permanent Residents, and Employment Pass (EP) holders.
Eurasian Community Fund (ECF)
Who qualifies: Employees identified as Eurasian on their Identity Card (IC).
Applies to: Singapore Citizens and Permanent Residents only.
How Much to Pay For SHG Funds?
- CDAC: S$0.50–S$3.00 (by monthly wage tier)
- MBMF: typical ranges up to S$16.00
- SINDA: S$1.00–S$7.00
- ECF: S$2.00–S$16.00.
Opt-outs & Payments
Employees can opt out directly with their SHG.
Until you receive written confirmation, keep deducting. Payment is made together with the same CPF EZPay submission as SDL.
- Capture each hire's race & religion on day one for correct SHG fund routing.
- Include SDL as a payroll cost — it comes from the company, not from employee wages.
- No SDL owed for employees earning $800 or less per month.
- All-foreign team? Pay SDL directly to SSG — not via CPF EZPay.
- Opt-out request? Get written confirmation before stopping the deduction.
That’s everything distilled
Set up CPF EZPay once, and SDL and SHG will run automatically every month after. The main work is at the start — knowing who is on payroll, their community, and their wage level. Get that sorted, and the rest happens on its own.
Haven’t read the CPF piece yet? Start there — that’s where all three obligations ultimately get paid.
For all the ways you work, we’re here
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