Foreign Worker Levy Rebates In Singapore: How Much Businesses Can Expect To Receive In 2021

Foreign worker levy rebate in Singapore

With a small population, Singapore relies on a relatively large foreign workforce to support, diversify and bring new skillsets into our economy. As at December 2020, the foreign workforce in Singapore numbered about 1.2 million. While it might seem like a huge number, it was already a decline from 2019 – when the total number of foreigners working here stood at over 1.4 million.

There could be several reasons for the dwindling numbers in 2020: 

  • Restricted border movements in 2020 (and 2021) due COVID-19. 
  • Increasing unemployment rate in Singapore, possibly leading to less foreigners required to fill certain job vacancies.
  • Generous salary support for local businesses to hire locals.
  • Increased salary requirements for foreign professionals and tightened foreign worker quota in recent years – with the latest coming during Budget 2021.

Read Also: Foreign Worker Quota In Singapore: What Is It And How To Calculate It For Your Business

Nevertheless, the Singapore government has to also support businesses that hire foreigners in Singapore. Some of these businesses are within important sectors including construction, marine and process, as well as in F&B, retail and many others.

On the back of this, the government has announced higher Foreign Worker Levy rebates for business in hard-hit sectors, including Construction, Marine Shipyard and Process Sectors, to help them tide through this difficult period.

What Is The Foreign Worker Levy?

The Foreign Worker Levy is an additional payment that businesses have to pay in order to hire a foreigner in Singapore. According to the Ministry of Manpower (MOM), it acts as a pricing mechanism to regulate the number of foreign workers in Singapore.

Foreign Worker Levy only applies to Work Permit and S Pass Holders, but not employees under Employment Pass (EP).

When hiring a foreign employee, businesses are not required to pay CPF contributions, which can be as high 17% of their salary in Singapore. However, a monthly foreign worker levy must be paid. The levy liability starts from the day the Temporary Work Permit or Work Permit is issued, whichever is earlier, and ends when the permit is cancelled or expires.

Foreign Worker Levy Differs From Sector To Sector

The amount of foreign worker levy an employer needs to pay generally depends on four factors: 

  • Are you hiring a work permit holder or an S Pass holder?
  • The foreign worker’s qualifications: businesses pay less foreign worker levy for higher-skilled workers 
  • The number of Work Permit or S Pass holders hired in the company: businesses with a larger proportion of their headcount filled by foreign workers have to pay a higher foreign worker levy
  • The sector that your business is operating in – depending on the sector you operate in, you have to pay a different foreign worker levy

For easier reference, here’s a collation of the amount of monthly levy businesses in each sector has to pay for each foreign worker hired.

Foreign Worker Levy For Work Permit Holders

SectorBasic-Skilled Worker (Monthly)Higher-Skilled Worker (Monthly)
Construction$700 – Malaysians and North Asian sources (NAS); Non-Traditional Sources (NTS) and People’s Republic of China (PRC) on Man-year Entitlement (MYE)

$950 – NTS and PRC, MYE waiver
$300 – Malaysians and North Asian sources (NAS); NTS and PRC on MYE

$600 – NTS and PRC, MYE waiver
Manufacturing$370 – Tier 1 (up to 25% of total workforce)

$470 – Tier 2 (above 25% to 50% of total workforce)

$650 – Tier 3 (above 50% to 60% of total workforce)
$250 – Tier 1 (up to 25% of total workforce)

$350 – Tier 2 (above 25% to 50% of total workforce)

$550 – Tier 3 (above 50% to 60% of total workforce)
Marine Shipyard$400$300
Process$450 – on MYE

$750 – on MYE waiver
$300 – on MYE

$600 – on MYE waiver
Services$450 – Tier 1 (up to 10% of total workforce)

$600 – Tier 2 (above 10% to 25% of total workforce)

$800 – Tier 3 (above 25% to 50% of total workforce)
$300 – Tier 1 (up to 10% of total workforce)

$400 – Tier 2 (above 10% to 25% of total workforce)

$600 – Tier 3 (above 25% to 50% of total workforce)

According to MOM, employers pay a lower levy fee when hiring a higher skilled worker. They also pay a higher levy per foreign worker with the increase in number of foreign labour hired.

Foreign Worker Levy For S Pass Holders

Under the existing quota, the number of S Pass holders a company can hire is capped at:

  • 10% of the company’s total workforce in the services sector
  • 20% in the manufacturing sector
  • 18% in all other sectors

Here’s a collation of the monthly foreign worker levy that businesses in each sector has to pay for each S Pass holder they hire.

Sector Levy Rate (Monthly)
Services$330 – Tier 1 (Up to 10% of total workforce)
Manufacturing$330 – Tier 1 (Up to 10% of total workforce)

$650 – Tier 2 (Above 10% to 20% of total workforce)
All Other Sectors (Excluding Services and Manufacturing)$330 – Tier 1 (Up to 10% of total workforce)

$650 – Tier 2 (Above 10% to 18% of total workforce)

Recent Foreign Worker Levy Rebates

Due to COVID-19 downturn in 2020, a total of 3 rounds of foreign worker levy rebates was announced between 6 April and 26 May 2020.

During the Solidarity Budget announced on 6 April 2020, a foreign worker levy rebate was provided to help affected businesses upkeep and care for their foreign workers during circuit breaker, the government provided employers with a Foreign Worker Levy rebate of $750 for each work permit or S Pass holder

In the first two rounds, employers who had paid up to December 2019’s foreign workers’ levy in full, were eligible for a flat rate of $750 for each S Pass or Work Permit holder under their employment as at 29 February 2020 (round 1) / 1 May 2020 (round 2). 

In the 3rd round of levy rebate, a flat rate of $750 in June 2020 and $375 in July for each S Pass or Work Permit holder under employment as at 1 June 2020 and 1 July 2020, were provided to businesses in the Construction, Marine Shipyard and Process sectors; and businesses that were not in MTI’s permitted list to resume operations.

Enhanced Foreign Worker Levy Rebates Provided To Harder Hit Sectors In 2021 – Construction, Marine Shipyard and Process Sectors

On 8 May 2021, MOM announced that businesses in the Construction, Marine Shipyard and Process (CMP) sectors will be receiving a higher Foreign Worker Levy (FWL) rebate for each Work Permit Holder – from $90 per month to $250 per month from May to December 2021.

MOM advises employers to make use of the FWL rebate to retain existing workers and bring in Work Permit Holders from lower-risk countries or regions.

Eligible employers may head to MOM’s website to check the amount of levy rebate they will receive.

When Can Employers Expect To Receive Foreign Worker Levy Rebates?

Each month’s rebate will be processed and credited to eligible employers on the following month. For instance, the levy rebate for June 2021 will be credited to the employer via PayNow Corporate in July 2021 or via cheque by August 2021.

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