Introduction
Singapore's employer statutory costs centre on the Central Provident Fund (CPF), a comprehensive savings scheme covering retirement, healthcare, and housing. Additional costs include the Skills Development Levy (SDL) and, for foreign workers, the Foreign Worker Levy (FWL). This guide covers the 2024-2025 rates.
Central Provident Fund (CPF)
For employees aged 55 and below, the employer contributes 17% and the employee 20% of ordinary wages (OW), totalling 37%. OW is capped at SGD 6,800 per month (raised from SGD 6,000 in 2024). CPF contribution rates decrease with age: for ages 56-60, employer pays 14.5% and employee 13%; rates reduce further above 60. CPF allocations are split across Ordinary Account (housing/education), Special Account (retirement), and MediSave Account (healthcare).
Skills Development Levy and Foreign Worker Levy
SDL is 0.25% of monthly remuneration, with a minimum of SGD 2 and maximum of SGD 11.25. It is 100% employer-funded and supports workforce training. The Foreign Worker Levy is a flat monthly fee per foreign worker (Work Permit holders), ranging from SGD 300 to SGD 950 depending on the sector and the firm's dependency ratio.
Summary of Employer Costs
For Singaporean and PR employees under 55, the employer's statutory cost is approximately 17.25% of OW (17% CPF + 0.25% SDL). This is competitive by global standards. For foreign employees on Employment Passes, there is no CPF obligation, making the cost effectively just SDL (0.25%). For Work Permit holders, the FWL adds a significant flat monthly cost. Employers should also budget for statutory leave, notice periods, and retrenchment benefits under the Employment Act.
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