Statute Details
- Title: Skills Development Levy (Wages — Excluded Payments) Notification 2023
- Act/Instrument Code: SDLA1979-S375-2023 (SL 375/2023)
- Type: Subsidiary legislation / Notification (sl)
- Authorising Act: Skills Development Levy Act 1979
- Enacting authority: Minister for Education (pursuant to the definition of “wages” in section 2 of the Skills Development Levy Act 1979)
- Commencement: 15 June 2023
- Key provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (including “dental treatment”, “medical treatment”, “traditional Chinese medicine treatment”, “relevant treatment”, and “dependant”)
- Section 3: Payments excluded from “wages” (reimbursement for relevant treatment)
- Made on: 12 June 2023
- Current status (per extract): Current version as at 27 Mar 2026
What Is This Legislation About?
The Skills Development Levy (Wages — Excluded Payments) Notification 2023 is a targeted administrative instrument under the Skills Development Levy Act 1979 (“SDLA”). In practical terms, it clarifies that certain employer payments—specifically reimbursements to employees for healthcare-related expenses—are not treated as “wages” for the purpose of calculating the Skills Development Levy (“SDL”).
Under the SDLA, employers generally pay SDL based on the “wages” they pay to employees. The definition of “wages” in the SDLA is therefore central to determining the SDL base. This Notification operates as an exception: it carves out a defined category of payments from the SDL “wages” concept, thereby reducing the amount that may be subject to SDL when employers reimburse eligible medical costs.
The Notification’s scope is deliberately narrow and outcome-focused. It does not create a new healthcare benefit; rather, it addresses the tax/levy treatment of reimbursements. If an employer reimburses an employee (or reimburses for a dependant) for “relevant treatment” incurred on or after 15 June 2023, that reimbursement is excluded from “wages” for SDL purposes.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides that the Notification is cited as the “Skills Development Levy (Wages — Excluded Payments) Notification 2023” and comes into operation on 15 June 2023. This date is critical because the exclusion in Section 3 applies only to payments that become due on or after that commencement date.
2. Definitions (Section 2)
Section 2 supplies the interpretive framework for Section 3. It defines several terms that collectively determine what kinds of healthcare expenses qualify for the “wages” exclusion.
(a) “Dental treatment” is defined to include procedures, work, services, investigations, treatment/advice, and attendance that a dentist considers necessary for the treatment or diagnosis of any dental ailment, infirmity or defect, excluding solely aesthetic defects. It also includes what is usually provided by dentists for the maintenance of dental hygiene.
(b) “Medical treatment” is defined similarly, but for physical or mental ailments, infirmities or defects (again excluding solely aesthetic defects). It covers procedures, work, services, investigations, treatment/advice, and attendance that a medical practitioner considers necessary for treatment or diagnosis.
(c) “Traditional Chinese medicine treatment” extends the concept to traditional Chinese medicine, covering procedures, work, services, investigations, treatment/advice, and attendance that a practitioner of traditional Chinese medicine considers necessary for treatment or diagnosis, excluding solely aesthetic defects.
(d) “Relevant treatment” is the umbrella term: it means any dental treatment, medical treatment, or traditional Chinese medicine treatment, whether received in Singapore or elsewhere.
(e) “Dependant” is defined in relation to an employee to include: (i) a natural child or stepchild; (ii) a child whose adoption, guardianship or foster care by the employee is recognised by law or by a consular authority of the place of nationality; and (iii) a spouse under a marriage recognised by the law of the country/territory/state where the marriage took place.
(f) Practitioner status and cross-border treatment
Section 2(2) addresses who counts as the relevant healthcare provider. For treatment in Singapore, the practitioner must be registered under the relevant Singapore registration regime: a registered dentist (Dental Registration Act 1999), a registered medical practitioner (Medical Registration Act 1997), or a registered person (Traditional Chinese Medicine Practitioners Act 2000). For treatment outside Singapore, the practitioner must be qualified to practise under the law of the country/territory/state where the treatment is provided. This is important for employers reimbursing employees who seek treatment abroad.
3. Payments excluded from “wages” (Section 3)
The operative provision is Section 3. It states that the definition of “wages” in section 2 of the SDLA does not include any payment that becomes due on or after 15 June 2023 to an employee from the employee’s employer to reimburse the employee for any amount incurred in respect of any relevant treatment received (or to be received) by the employee or by an individual who is a dependant of the employee at the time the payment becomes due.
Several practical elements should be highlighted:
- Timing: the exclusion is tied to when the payment “becomes due” (not necessarily when it is paid). This can matter where reimbursements are processed after the underlying expense is incurred.
- Nature of payment: it must be a reimbursement by the employer to the employee for amounts incurred in respect of relevant treatment. Pure allowances or other non-reimbursement payments would not automatically qualify.
- Scope of treatment: the treatment must fall within the defined categories (dental, medical, or traditional Chinese medicine) and must exclude solely aesthetic defects.
- Recipient of treatment: the relevant treatment may be received by the employee or by a dependant. The dependant definition is therefore crucial for eligibility.
- Geographical scope: relevant treatment may be received in Singapore or elsewhere.
In effect, Section 3 creates an SDL “wages” exclusion for employer reimbursements of qualifying healthcare costs for employees and their defined dependants.
How Is This Legislation Structured?
This Notification is structured in a simple, three-part format:
- Section 1 (Citation and commencement): identifies the instrument and sets the commencement date (15 June 2023).
- Section 2 (Definitions): provides the key interpretive terms used in the exclusion, including the healthcare categories, the meaning of “relevant treatment”, the definition of “dependant”, and the requirements for practitioner qualification in Singapore and abroad.
- Section 3 (Payments excluded from wages): sets out the exclusion from the SDLA “wages” definition for reimbursements for relevant treatment incurred (or to be incurred/received) on or after the commencement date.
Who Does This Legislation Apply To?
The Notification applies to employers that are subject to the Skills Development Levy regime under the SDLA. It affects how employers compute SDL by modifying what counts as “wages” for levy purposes.
It also indirectly affects employees because the exclusion is framed around payments made by the employer to reimburse employees for relevant treatment expenses. Importantly, the reimbursement may relate to treatment received by the employee or by a dependant of the employee, so employees with eligible dependants may benefit from SDL-excluded reimbursements when their employers provide such reimbursements.
Why Is This Legislation Important?
This Notification is significant because it clarifies the SDL treatment of a common employer practice: reimbursing employees for healthcare expenses. Without such an exclusion, reimbursements could potentially be treated as part of “wages” (depending on the SDLA’s definition and any related guidance), increasing the SDL base and thereby the employer’s levy cost.
From a compliance perspective, Section 3 provides a clear pathway for employers to structure reimbursements so that they fall outside “wages” for SDL purposes. The defined terms in Section 2—particularly the exclusions for solely aesthetic defects, the practitioner qualification requirements, and the dependant definition—help reduce ambiguity and support consistent internal policy and payroll treatment.
For practitioners advising employers, the key practical impact is the need to align reimbursement schemes and payroll processing with the Notification’s conditions. This includes ensuring that reimbursements are (i) for “relevant treatment” as defined; (ii) linked to amounts incurred in respect of such treatment; (iii) made as reimbursements to employees; and (iv) tied to payments that become due on or after 15 June 2023. Employers should also be mindful of documentation and substantiation, especially for cross-border treatment where the practitioner must be qualified under the law of the relevant jurisdiction.
Related Legislation
- Skills Development Levy Act 1979 (including the definition of “wages” in section 2)
- Dental Registration Act 1999 (definition of “registered dentist”)
- Medical Registration Act 1997 (definition of “registered medical practitioner”)
- Traditional Chinese Medicine Practitioners Act 2000 (definition of “registered person”)
Source Documents
This article provides an overview of the Skills Development Levy (Wages — Excluded Payments) Notification 2023 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.