Frequently Asked Questions: #skillsdevelopmentfund

The Skills & Development Fund (SDF) levy is a mandatory contribution required for companies employing foreign workers in Indonesia. Key points about the SDF levy include:

• Purpose: It is designed to support the development of local workforce skills and competencies.

• Applicability: The levy applies to companies employing foreign workers on KITAS (temporary stay permit) visas.

• Payment frequency: The SDF levy is paid monthly for each foreign worker employed.

• Cost: The current rate is USD 100 per month per foreign worker.

• Payment method: The levy is typically paid through the company's BPJS Ketenagakerjaan (workers' social security) account.

• Legal basis: The SDF levy is mandated by Indonesian government regulations as part of the country's efforts to promote skills transfer and local workforce development.

• Non-compliance consequences: Failure to pay the SDF levy can result in difficulties renewing work permits and potential fines or sanctions.

• Exemptions: Some categories of foreign workers may be exempt from the SDF levy, such as diplomatic personnel or those working on specific government-to-government projects.

Companies employing foreign workers should factor this ongoing cost into their budgeting and ensure timely payments to maintain compliance with Indonesian labor regulations.

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