Statute Details
- Title: Skills Development Levy (Exemption) Order 2014
- Act Code: SDLA1979-S258-2014
- Type: Subsidiary Legislation (Order)
- Authorising Act: Skills Development Levy Act (Cap. 306), in particular section 4(3)
- Commencement: 1 April 2014
- Current status: Current version as at 27 Mar 2026 (per the legislation portal)
- Key provisions (from extract): Section 1 (Citation and commencement); Section 2 (Exemption)
- Amendments noted in timeline: S 470/2016 (w.e.f. 3 Oct 2016); S 385/2017 (w.e.f. 11 Jul 2017)
What Is This Legislation About?
The Skills Development Levy (Exemption) Order 2014 (“the Order”) is a piece of subsidiary legislation made under the Skills Development Levy Act. In plain terms, it creates specific situations where the Skills Development Levy (“SDL”) is not chargeable. SDL is a statutory levy imposed on employers in Singapore to fund skills development and training initiatives. The Order therefore operates as a targeted “carve-out” from the general SDL charging regime.
The Order is not a broad reform of SDL policy. Instead, it focuses on particular categories of students who are employed for training or work during school holidays, and it also addresses a limited scenario involving overseas tertiary students required to undergo short training in Singapore. The legislative approach is practical: it exempts SDL in defined circumstances, but it also imposes documentary conditions to ensure that the exemption is only claimed when the underlying training/work arrangement matches the legislative intent.
From a practitioner’s perspective, the Order is most relevant when advising employers on whether SDL is payable for employees who are students, including polytechnic and university students, and for certain school students employed during gazetted holidays. It also matters for compliance workflows, because at least one exemption category requires submission of a confirmation letter to the SkillsFuture Singapore Agency (formerly associated with SkillsFuture-related administration).
What Are the Key Provisions?
Section 1 (Citation and commencement) is straightforward. It provides that the Order may be cited as the Skills Development Levy (Exemption) Order 2014 and that it comes into operation on 1 April 2014. This matters for determining whether SDL exemptions apply to employment periods starting on or after that date, and for aligning internal payroll and compliance records.
Section 2 (Exemption) is the substantive provision. Section 2(1) states that “no skills development levy shall be chargeable” in respect of three categories of students/employment arrangements.
First exemption category: matriculated or registered students employed for training approved by the institution (Section 2(1)(a)). The Order exempts SDL where the employee is a “matriculated or registered student” of specified institutions and is employed for training approved by the institution in question. The institutions listed are Singapore’s major technical and higher education providers, including:
- Institute of Technical Education (ITE)
- Nanyang Polytechnic
- Nanyang Technological University
- National University of Singapore
- Ngee Ann Polytechnic
- Republic Polytechnic
- Singapore Institute of Technology
- Singapore Management University
- Singapore Polytechnic
- Singapore University of Technology and Design
- Temasek Polytechnic
- Singapore University of Social Sciences
The legal significance of this category is that it ties the exemption to two elements: (i) the student’s status (“matriculated or registered”) and (ii) the nature of employment (“employed for training approved by the institution”). Practically, employers should ensure that the training arrangement is properly approved by the relevant institution and that the student’s enrolment status can be evidenced if required.
Second exemption category: overseas tertiary students required to undergo short training in Singapore (Section 2(1)(b), subject to Section 2(2)). This exemption covers a matriculated or registered student of an overseas tertiary education institution who, during the course of studies, is required by the institution to undergo training in Singapore for a period of not more than 6 months. The “not more than 6 months” limitation is critical: it is a hard temporal boundary that should be tracked against the actual training period and any extension or renewal arrangements.
However, the exemption is expressly subject to sub-paragraph (2). Section 2(2) imposes a compliance condition: the exemption under Section 2(1)(b) applies only if the employer submits to the SkillsFuture Singapore Agency a letter issued by the overseas tertiary education institution confirming that:
- the student is a matriculated or registered student of the institution; and
- the student is required by the institution to undergo training in Singapore.
This is a key practitioner point. The exemption is not purely automatic based on the student’s status and training requirement; it is conditional on a specific documentary submission. Employers should build a compliance process to obtain the institution’s letter in time, retain it, and ensure it is submitted to the correct agency. Failure to satisfy the condition could expose the employer to SDL liability for the relevant employment period.
Third exemption category: registered school students employed during gazetted school holidays (Section 2(1)(c)). The Order exempts SDL for a “registered student (other than a student who has completed his ‘A’ level examinations)” of any school registered under the Education Act (Cap. 87) who is employed during gazetted school holidays.
This category is narrower than it may first appear. Two constraints stand out:
- Student status: the student must be a “registered student” of a school registered under the Education Act.
- Exclusion of A-level completers: the exemption does not apply to a student who has completed the “A” level examinations. This suggests the legislative intent to exclude post-secondary students who may no longer fall within the same policy rationale as school holiday employment.
For employers, the practical compliance challenge is verifying that the student is still within the relevant school category and has not completed A levels. Employers should request appropriate confirmation (e.g., school registration status or student documentation) and confirm the employment dates fall within gazetted school holidays.
Amendment notes (S 470/2016 and S 385/2017) indicate that the exemption framework has been refined since the Order’s original issuance. While the extract does not reproduce the full amendment text, the timeline confirms that the current wording reflects changes effective from 3 October 2016 and 11 July 2017. Practitioners should therefore always rely on the current consolidated version when advising on SDL exemption eligibility.
How Is This Legislation Structured?
The Order is structured in a compact format typical of subsidiary legislation. It contains:
- Section 1: Citation and commencement (when the Order takes effect).
- Section 2: Exemption (the operative provisions specifying when SDL is not chargeable, and the conditions attached to at least one exemption category).
There are no additional parts or complex schedules in the extract provided. The operative content is therefore concentrated in Section 2, with the compliance condition for overseas tertiary students located in Section 2(2).
Who Does This Legislation Apply To?
The Order applies to the charging of SDL under the Skills Development Levy Act. In practice, it affects employers who employ the relevant categories of students. The exemption is framed as “no skills development levy shall be chargeable in respect of” the specified persons and employment circumstances. Therefore, the employer’s SDL obligations depend on whether the employee fits within one of the exemption categories and whether the conditions are satisfied.
It also indirectly affects students and the institutions they attend. For the exemptions to apply, the student must be a matriculated/registered student of the specified institutions (or an overseas tertiary institution in the second category), and the training must be approved or required by the institution. For school holiday employment, the student must be a registered student of a registered school under the Education Act and must not have completed A levels.
Why Is This Legislation Important?
This Order is important because it directly impacts employers’ statutory cost calculations and compliance obligations. SDL is a levy that can affect budgeting and payroll administration. By carving out specific student employment arrangements, the Order reduces SDL exposure where the employment is genuinely part of an approved training or holiday employment framework.
From an enforcement and risk perspective, the Order’s conditional documentary requirement for overseas tertiary students is particularly significant. Employers who fail to submit the required confirmation letter to the SkillsFuture Singapore Agency may lose the exemption and face SDL liability. This makes the Order not only a substantive exemption instrument but also a compliance-management document.
For practitioners, the Order is also useful because it provides a clear eligibility framework that can be translated into internal checklists: confirm the institution category, confirm the student’s enrolment status, confirm the training approval/requirement, track the duration (especially the “not more than 6 months” limit), and verify that employment dates align with gazetted school holidays. When advising clients, these are the factual matters that typically determine whether SDL is chargeable.
Related Legislation
- Skills Development Levy Act (Cap. 306) — the authorising Act and the primary SDL charging framework
- Education Act (Cap. 87) — relevant for determining which schools are “registered” for the purposes of the school holiday exemption
Source Documents
This article provides an overview of the Skills Development Levy (Exemption) Order 2014 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.