Foreign Worker Levy Singapore: 2026 Rates and Quotas

When you hire a foreign worker, the levy shows up before the first payroll. It is a monthly bill from MOM, not a payroll deduction from the worker, and it hits your P&L for as long as the pass is active. Get the rate wrong or misread the quota and the fix is not a small adjustment; it is a compounding cost line and a hiring cap you did not know you had.

This guide covers what the levy is, the current 2026 rates by sector and tier, the dependency ratio ceiling that caps how many foreign workers you can hire, and the local-headcount and skill rules that expand or reduce the bill. We handle payroll and CPF filings for our clients every month, so we've seen the ways the levy sneaks up on employers.

What the Foreign Worker Levy is

The FWL is a monthly regulatory charge on employers of Work Permit (WP) and S Pass holders, administered by the Ministry of Manpower. It is set by sector and skill tier and is paid on top of the worker's salary and CPF (which apply only to Singapore Citizens and PRs, not to WP/S Pass holders).

Levy liability starts on the earlier of the date the Temporary Work Permit is issued or the date the Work Permit is issued, and it ends when the permit is cancelled or expires. That means you can owe levy before the worker steps into the office, and you keep owing it until you actually cancel the pass in MOM's system.

The levy has two jobs. It prices the use of foreign labour so hiring locally is not artificially expensive, and it is one of the levers MOM uses to control workforce mix at the sector level.

2026 Work Permit levy rates by sector

Work Permit rates depend on sector, skill tier (Higher-skilled/R1 vs Basic-skilled/R2), and, for some sectors, source-country group. These are the rates MOM shows for 2026:

Services is the only sector with three levy tiers, and the tier you fall into depends on the proportion of foreign workers in your total workforce, not the individual worker. The same worker can move between tiers if the composition of the team changes.

MOM's March 2026 factsheet also announced future levy increases for basic-skilled workers in Marine Shipyard and Process. Check MOM's foreign worker levy page before locking in your budget if you sit in either sector.

Higher-skilled (R1) vs Basic-skilled (R2): the cheaper hire

The gap between R1 and R2 rates is real money. A Services Tier 3 R2 worker costs S$800/month; the R1 equivalent is S$600. Over a year, that is S$2,400 per head.

Workers qualify as R1 through recognised training, experience, or salary. In Construction, MOM's four Higher-Skilled routes are:

• CoreTrade: 4+ years' experience and the CoreTrade skills assessment.
• Multi-Skilling Scheme: 4 to 6 years' experience plus SEC(K) in a second trade or approved safety/WSQ training.
• Direct R1 Pathway: minimum fixed monthly salary of S$1,600 plus a relevant certificate (SEC(K), higher-skill SEC(K), SPM for Malaysians, or ALP end-of-course validation).
• Market-Based Skills Recognition Framework: 6+ years' experience and minimum fixed monthly salary of S$1,600.

Services has separate rules: non-Malaysian Work Permit holders in hotel, retail, and F&B must hold WPLN Level 4 in listening and speaking to qualify as R1. Manufacturing, Marine Shipyard, and Process each have their own R1 criteria on MOM's sector-specific pages; check yours before assuming a worker qualifies.

The upgrade path is worth planning for, especially for workers you expect to keep for 3+ years. The salary bump to hit the S$1,600 threshold is often smaller than the annual levy saving.

S Pass levy: a flat S$650

Since 1 September 2025, the S Pass levy has been harmonised at S$650 per month across all sectors and tiers. That replaced the old two-tier system where S Pass Tier 2 sat higher.

For a partial calendar month (a mid-month start or cancellation), MOM prorates the levy at a daily rate of S$21.37, calculated as (Monthly levy × 12) / 365, rounded up to the nearest cent.

The dependency ratio ceiling (DRC): how many foreign workers you can hire

The DRC caps the share of your total workforce that can be foreign. Work Permit and S Pass holders both count toward it.

Three ceilings can bind you at once: overall DRC, S Pass sub-quota, and (for Services and Manufacturing) the PRC nationality sub-quota. You can be under the DRC and still unable to hire another S Pass holder because you have hit the 10% or 15% S Pass cap.

The formula MOM uses for the overall DRC is:

Maximum foreign workers = LQS count × Quota / (100% − Quota)

Where LQS count is your local employees who meet the Local Qualifying Salary and Quota is your sector's DRC. In plain terms:

Services is the tightest. To hire 3 foreign workers under the Services cap, you generally need at least 6 full-LQS locals.

Local Qualifying Salary (LQS): how a local counts toward quota

The LQS decides how much each local employee contributes to your headcount for quota purposes:

MOM uses a rolling three-month average of CPF-declared salaries. A part-time hire at S$1,000/month gives you half a headcount; three of them give you 1.5. Someone paid S$1,800 or more counts as a full local.

The LQS is a quota lever, not a levy lever. Raising a local's pay from S$1,750 to S$1,800 doesn't change the FWL rate for your foreign workers, but it can unlock room for an extra hire under the DRC.

What the levy will cost you each month

Here's a worked example for a Services-sector SME.

You have 4 local employees paid at least S$1,800 each. That gives 4 full LQS counts. Under the Services DRC of 35%:

Max foreign workers = 4 × 0.35 / (1 − 0.35) = 4 × 0.5385 ≈ 2 foreign workers

Both of those hires have to be Work Permit holders. The Services S Pass sub-quota is 10% of total workforce, and 1 S Pass holder in a 6-person team is already 17%. You need a total workforce of at least 10 before a Services firm can hold its first S Pass.

With 2 foreign workers in a team of 6, you are at 33% foreign, inside the Tier 3 band (above 25% to 35%). MOM fills the tiers in order (S Pass holders first, then higher-skilled, then basic-skilled Work Permit holders), so the workers counted into the top band pay the top rate. At the Tier 3 rates, the difference between skill levels looks like this:

2 basic-skilled (R2) workers × S$800 = S$1,600 per month, or S$19,200 per year

2 higher-skilled (R1) workers × S$600 = S$1,200 per month, or S$14,400 per year

Same headcount, S$4,800 a year apart. MOM's levy bill shows the tier each worker is charged at, so check it against your own count every month. Skill classification belongs in your hiring plan, not on the HR admin's desk.

S Pass minimum qualifying salary (and the 2027 change)

An S Pass application must meet a minimum qualifying salary that rises with the candidate's age:

MOM's March 2026 factsheet announced increases from January 2027 for new applications (renewals from January 2028):

• Non-Financial services: S$3,300 → S$3,600
• Financial services: S$3,800 → S$4,000
• The threshold continues to rise with age, up to approximately S$5,100 (non-FS) and S$5,650 (FS) for older applicants.

Plan hiring calendars around January 2027 if you have S Pass renewals expiring in 2028 you want to lock in at the current floor.

Levy waivers: when the levy stops

The levy can be waived (subject to MOM approval and supporting records) if a Work Permit or S Pass holder is:

• On approved overseas leave: capped at 60 calendar days per calendar year.
• On approved hospitalisation leave.
• Incarcerated or in police / embassy custody.
• Absent without leave, subject to MOM's conditions.

Waivers are not automatic. Applications open on the 1st of the month after you receive the levy bill and must be submitted within one year of the levy bill. Keep the evidence (boarding passes, passport stamps, medical certificates, custody records) until MOM confirms the waiver.

When and how the levy is paid

MOM issues the levy bill monthly through the Check and pay foreign worker levy e-service (Corppass login). The bill is normally available on the third working day of each month.

Payment channels are GIRO (the standard) and PayNow QR for employers without GIRO. GIRO deduction happens on the 17th of the following month: the January levy is deducted in February. If the 17th falls on a Saturday, Sunday, or public holiday, the deadline moves to the next working day.

For GIRO to work, keep sufficient funds in the account and set a monthly deduction limit that covers the full bill. A failed GIRO deduction triggers a late-payment penalty on the next bill and, if the arrears drag on, restrictions on your work-pass renewals and new applications. Our payroll guide for Singapore small businesses covers how we set up GIRO alongside CPF to keep the monthly bill reconciled.

What happens if a worker resigns mid-month

The levy is charged on a daily basis for partial months, using the same (Monthly × 12) / 365 formula. If a basic-skilled Services Tier 3 Work Permit holder (S$800/month) resigns after 10 working days in a 30-day month, the daily rate is S$800 × 12 / 365 ≈ S$26.30. The levy for those 10 days is roughly S$263, not the full S$800.

The exact number of levy days depends on the Work Permit cancellation date recorded in MOM's system, so lodge the cancellation promptly. A day of delay is a day of levy.

Frequently asked questions

Is the Foreign Worker Levy the same as CPF?

No. CPF applies only to Singapore Citizens and Permanent Residents. The FWL is a separate monthly employer charge on Work Permit and S Pass holders and does not go into any retirement account.

Does an S Pass holder count in the same quota as a Work Permit holder?

Yes for the overall DRC, but S Pass has an additional sub-quota: 10% of workforce for Services, 15% for the other four sectors. You can be under the DRC and still blocked from an extra S Pass hire because you have hit the S Pass cap.

Can I pass the levy on to the worker?

No. Section 22A of the Employment of Foreign Manpower Act prohibits deducting the FWL from the worker's salary or otherwise recovering it from the worker. No salary deduction, no "levy reimbursement" fee, no contractual clause. It is an employer cost.

How is a part-time local's LQS headcount calculated?

MOM uses the three-month average of CPF-declared salary. A part-timer earning between S$900 and S$1,800 counts as 0.5. Anything under S$900 counts as zero.

When do the announced 2027 S Pass salary changes take effect?

New S Pass applications from January 2027 must meet the higher floors (S$3,600 non-FS; S$4,000 FS). Renewals for passes expiring from January 2028 must meet the new floors then.

Get your payroll and levy on autopilot

The FWL is small on any single worker and big at the sector level once the DRC tightens. If you'd rather not track sector tiers, quota formulas, and daily proration in a spreadsheet, our payroll service handles CPF, SDL, IR8A, and FWL alongside your monthly payroll on Xero. Book a free consultation and we'll take payroll off your plate.