Statute Details
- Title: Skills Development Levy (Wages — Excluded Payments) Notification 2023
- Act Code: SDLA1979-S375-2023
- Legislation Type: Subsidiary legislation / Notification (SL)
- Authorising Act: Skills Development Levy Act 1979
- Enacting Authority: Minister for Education
- Enacting Formula (summary): Made in exercise of powers conferred by the definition of “wages” in section 2 of the Skills Development Levy Act 1979
- Commencement: 15 June 2023
- Notification Number: No. S 375
- Date Made: 12 June 2023
- Key Provisions:
- Section 1: Citation and commencement
- Section 2: Definitions (dental treatment, medical treatment, traditional Chinese medicine treatment, dependant, relevant treatment)
- Section 3: Payments excluded from “wages” (reimbursements for relevant treatment incurred or to be received)
- Status: Current version as at 27 Mar 2026 (per provided extract)
What Is This Legislation About?
The Skills Development Levy (Wages — Excluded Payments) Notification 2023 (“the Notification”) is a targeted rule under Singapore’s Skills Development Levy (SDL) framework. In plain terms, it clarifies that certain employer payments—specifically, reimbursements for employees’ healthcare-related expenses—are not treated as “wages” for SDL purposes.
The SDL is a levy imposed on employers based on the “wages” they pay to employees. Because SDL calculations depend on what counts as “wages”, the law provides mechanisms to exclude certain payments from the wage base. This Notification is one such mechanism: it carves out reimbursements made by an employer to an employee (or to a dependant of the employee) for “relevant treatment”.
Importantly, the Notification is not a general healthcare benefit rule. It is narrowly drafted to cover reimbursements that become due on or after 15 June 2023, and only where the reimbursement relates to dental treatment, medical treatment, or traditional Chinese medicine treatment (as defined). The Notification also addresses cross-border treatment by extending the concept of “relevant treatment” to treatment received outside Singapore, provided the practitioner is properly qualified under the law of the place where treatment is provided.
What Are the Key Provisions?
1. Commencement and temporal scope (Section 1)
Section 1 provides that the Notification comes into operation on 15 June 2023. This commencement date matters because Section 3 applies only to payments that become due on or after 15 June 2023. For practitioners advising employers, this creates a clear cut-off: reimbursements due before that date would not benefit from the exclusion under this Notification (though other exclusions under the SDL regime might still be relevant).
2. Defined terms for healthcare treatment and eligibility (Section 2)
Section 2 supplies definitions that control the scope of the exclusion in Section 3.
(a) “Relevant treatment” is defined as any dental treatment, medical treatment, or traditional Chinese medicine treatment, whether in Singapore or elsewhere. This “whether in Singapore or elsewhere” language is significant for employers with multinational workforces or employees who travel for medical care.
(b) “Dental treatment” covers procedures, work, services, investigations, treatment/advice, or attendance that a dentist considers necessary for treating or diagnosing a dental ailment, infirmity or defect (excluding solely aesthetic defects). It also includes procedures usually provided by dentists for maintaining dental hygiene.
(c) “Medical treatment” is similarly framed: procedures, work, services, investigations, treatment/advice, or attendance that a medical practitioner considers necessary for treating or diagnosing a physical or mental ailment, infirmity or defect (excluding solely aesthetic defects).
(d) “Traditional Chinese medicine treatment” is defined in parallel terms, but based on the practitioner’s assessment under traditional Chinese medicine principles, again excluding solely aesthetic defects.
(e) “Dependant” is defined for SDL exclusion purposes. In relation to an employee, a dependant includes: (i) a natural child or stepchild; (ii) a child whose adoption, guardianship or foster care is recognised by law or by a consular authority of the employee’s nationality place; or (iii) a spouse under a marriage recognised by the law of the country/territory/state where the marriage took place.
This definition is crucial because Section 3 extends the exclusion not only to reimbursements for the employee’s own treatment, but also to reimbursements for treatment received by a dependant at the time the payment becomes due.
(f) Practitioner qualification (Section 2(2))
Section 2(2) addresses who counts as a relevant practitioner. For treatment in Singapore, the practitioner must be registered under the relevant Singapore regulatory framework: 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 place where treatment is provided.
3. The exclusion from “wages” (Section 3)
The operative provision is Section 3. It states that the definition of “wages” in section 2 of the Skills Development Levy Act 1979 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 amounts incurred in respect of any relevant treatment received, or to be received, by:
- (a) the employee; or
- (b) an individual who is a dependant of the employee at the time that the payment becomes due.
In practical terms, Section 3 excludes from the SDL wage base employer reimbursements for healthcare costs (dental, medical, and traditional Chinese medicine) for the employee and eligible dependants. The exclusion applies whether the treatment has already been received or is yet to be received, so long as the reimbursement payment becomes due on or after 15 June 2023.
Key drafting points for advisers
Several features of Section 3 are likely to matter in disputes or audits:
- “Becomes due”: The exclusion is tied to the due date of the payment, not necessarily the date the expense was incurred or the date the treatment occurred. Employers should align payroll and reimbursement processes to ensure the due date falls on or after 15 June 2023.
- “Reimburse the employee”: The payment must be a reimbursement made by the employer to the employee. This suggests that direct payment by the employer to a healthcare provider may require separate analysis under the SDL wage definition and other exclusions; the Notification is expressly about payments to the employee.
- “Amounts incurred … in respect of … treatment received, or to be received”: The exclusion covers both past and future treatment, but it is still anchored to amounts incurred (for received treatment) or reimbursement for treatment to be received (which may involve pre-authorisation or contractual arrangements). Employers should document the basis for reimbursement.
- Exclusion of “solely aesthetic defects”: The definitions exclude treatment for solely aesthetic defects. Employers should be cautious where claims relate to cosmetic procedures; they may not qualify as “dental/medical/traditional Chinese medicine treatment” under the Notification.
How Is This Legislation Structured?
The Notification is concise and structured into three sections:
- Section 1 (Citation and commencement): identifies the Notification and sets the commencement date (15 June 2023).
- Section 2 (Definitions): defines the healthcare-related concepts and eligibility terms that determine what counts as “relevant treatment” and who qualifies as a “dependant”. It also specifies practitioner qualification requirements for treatment in Singapore versus outside Singapore.
- Section 3 (Payments excluded from wages): provides the core exclusion from the SDL wage base for reimbursements of relevant treatment costs that become due on or after 15 June 2023.
Who Does This Legislation Apply To?
This Notification applies to employers that are subject to the Skills Development Levy Act 1979 and that pay employees amounts that may otherwise be treated as part of “wages” for SDL computation. The exclusion is relevant wherever an employer reimburses an employee for healthcare expenses.
It also indirectly affects employees and their dependants, because the exclusion extends to reimbursements for treatment received by dependants (as defined) at the time the payment becomes due. However, the Notification is drafted as a rule about how “wages” are defined for SDL purposes, so the compliance obligations fall on employers.
Why Is This Legislation Important?
For employers, the Notification can materially affect SDL calculations. SDL is computed by reference to wages, so excluding certain reimbursements from “wages” can reduce the SDL payable. The Notification therefore provides a compliance pathway for employers offering healthcare reimbursement benefits—particularly those that reimburse employees for dental, medical, or traditional Chinese medicine expenses for themselves and eligible dependants.
From a practitioner’s perspective, the Notification is also important because it provides clear definitional boundaries that reduce uncertainty. The inclusion of “whether in Singapore or elsewhere” and the practitioner qualification rules help employers assess cross-border claims. The exclusion of “solely aesthetic defects” provides a basis to challenge or limit claims that are cosmetic in nature.
Finally, the “becomes due” timing requirement is a practical compliance issue. Employers should review their reimbursement and payroll systems to ensure that the due date of reimbursements aligns with the Notification’s commencement. In audits, the due date and documentation of the treatment category (dental/medical/traditional Chinese medicine) and the dependant status may be scrutinised.
Related Legislation
- Skills Development Levy Act 1979
- Dental Registration Act 1999
- Medical Registration Act 1997
- Traditional Chinese Medicine Practitioners Act 2000
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.