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

Foreign workers in Singapore complement the relatively small local population to grow the economy and add diversity to its skillsets. As at June 2020, the foreign workforce in Singapore numbers over 1.2 million.  

While this is so, Singapore cannot freely allow anyone to come in either – and thus there are restrictions placed on foreigners who want to come to Singapore for work.

This is guided by the different types of work passes that foreign workers can come here to work on, as well as having quota restrictions. The most common work passes that businesses can apply to bring in their foreign workforce include Work Permits, S Pass and Employment Pass (EP).

Read Also: Guide To Work Passes In Singapore: Work Permits, S Pass and Employment Pass (EP)

Quota Restrictions For Employment Pass (EP) Holders

There is no quota restrictions for Employment Pass (EP) holders in Singapore. Workers holding an EP tend to be more highly skilled foreign professionals, managers and executives. Instead of applying a quota on the number of EPs a business can employ or charging a levy, restrictions are set on such employees earning at least $4,500 a month (and $5,000 a month in the financial services sector).

In September 2020, Manpower Minister Josephine Teo reiterated that it would “probably be unwise” to impose a quota on higher-end foreign professionals on Employment Passes. In this case, salary benchmarks are used to ensure companies attract the right types of foreign professionals. 

From 1 September 2020, the wage criteria for Employment Pass holders was increased to $4,500 a month for all sectors except for the financial service sector, which requires E Pass holders to earn at least $5,000 a month.

There are further restrictions, including having to advertise roles on the MyCareersFuture website, under the Fair Consideration Framework.

Quota Restrictions For S Pass Holders

During the same round of wage criteria revisions for Employment Pass (EP) holders in September 2020, the wage criteria for S Pass holders was also raised to $2,500 a month (from 1 October 2020).

However, unlike E Pass (EP) holders, the number of S Pass holders a business can hire is limited by a quota. This is because S Pass holders are mid-level skilled employees. Also unlike hiring EPs, businesses must pay a foreign worker levy when they hire S Pass holders.

Quotas or sub-dependency Ratio Ceilings (DRCs) are also different, based on your business activity. This is capped as a percentage of your workforce:

  • 10% for Services sector
  • 20% for Manufacturing sector
  • 18% in all other sectors

From 1 January 2023, the quota for Construction, Marine Shipyard and Process sectors will also be reduced to 15% (from 18% currently).

During Budget 2021, DPM Heng Swee Keat also announced that the quota for the Manufacturing sector will be reduced to 18% from 1 January 2022 and 15% from 1 January 2023.

In PM Lee’s National Day Rally 2021 speech, he mentioned that companies that want to hire foreign workers will have to pay all their local employees the Local Qualifying Salary (LQS) of $1,400. This will apply from 1 September 2022. Currently, companies the quotas are based on local employees who are paid the LQS. What this means is that if you have 20 full-time local employees, but only pay 10 of them $1,400 and above, the quotas/sub-dependency ratios listed above only apply on 10 employees. From 1 September 2022, you can no longer hire any foreign workers if you continue to pay the other 10 full-time local employees less than $1,400.

Read Also: Local Qualifying Salary: 5 Things You Need To Know About LQS

Depending on the percentage of foreign workforce in your business, you also have to pay a levy of either $330 or $650. If foreign employees make up 10% of your workforce, you are required to pay a monthly levy of $330 for each S Pass holder. However, if S Pass holders exceed 10% of your workforce, you have to pay $650 for each S Pass employee. 

TierQuotaMonthly Levy Rate
Basic / Tier 1All sectors: up to 10% of your workforce$330
Tier 2Services Sector: Above 10%N.A. (quota is 10%)
– If you temporarily exceed 10% S Pass quota, you will be charged Tier 2 rate of $650 for excess foreign manpower.
Tier 2Manufacturing Sector: above 10% and up to 20% of your workforce $650
Tier  2All Sector (Except Services and Manufacturing): above 10% and up to 18% of your workforce$650

There may be other requirements as well that businesses have to take note of when hiring S Pass holders, such having to buy and maintain medical insurance as long as they are under your employment.

Read Also: 4 Types Of Companies Most Affected By The Latest Changes To Employment Pass & S Pass Rules

Quota Restrictions For Work Permit Holders

Only businesses in the construction, manufacturing, marine shipyard, process or services sector can apply for work permit for their foreign workforce. Quotas for work permit holders can also be much more complicated, and you can refer to this guide for how to calculate your quota and levy bill on the MOM website.

In addition, all work permit holders can only work up to 60 years of age. There may also be a restriction on the maximum number of years workers from each source country can work in Singapore.

Levies are also used to control the number of foreign workers that a business chooses to employ. At the same time, varying levy prices are charged to encourage businesses to hire higher-skilled work permit holders or upskill their work permit holders.

Approved Sources for eligible business sectors:

Eligible Business SectorsApproved Sources
Construction 

Marine Shipyard 

Manufacturing
– Malaysia

– China

– Non-Traditional Source (NTS)
India
Sri Lanka
Thailand
Bangladesh
Myanmar
Philippines

– North Asian Sources (NAS)
Hong Kong
Macau
South Korea
Taiwan
Manufacturing 

Services
– Malaysia

– China

– North Asian Sources (NTS)
Hong Kong
Macau
South Korea
Taiwan

Different criteria may also apply to the different sectors:

Construction Sector

Eligible businesses can hire 7 work permit holders for every local employee who earns at least $1,400 per month. For local employees who earn between $700 to $1,400 a month, they will be counted as 0.5 local employees. Note that from 1 September 2022, your business will have to pay all local employees the Local Qualifying Salary of $1,400 to be eligible to hire any foreign workers.

A “man-year entitlement (MYE)” criteria also applies to the construction sector. 1 man-year = 1 year of employment under a Work Permit. How many man-years you are entitled to is based on your building project value:

For building project under $10 million:

Project ValueMan-Year Entitlement (MYE)
Less than $500,0000
First $1 million1.325 man-years per $100,000 value
Next $9 million7.95 man-years per $1 million  value

Source: MOM

For building project above $10 million:

Project ValueMan-Year Entitlement (MYE)
Less than $500,0000
First $1 million1.223 man-years per $100,000 value
Next $9 million7.338 man-years per $1 million  value
Next $20 million4.892 man-years per $1 million  value
Next $70 million3.261 man-years per $1 million  value
Next $100 million2.446 man-years per $1 million  value

Source: MOM

For civil engineering projects:

Project ValueMan-Year Entitlement (MYE)
Less than $500,0000
First $1 million0.543 man-years per $100,000 value
Next $9 million3.261 man-years per $1 million  value
Next $20 million2.174 man-years per $1 million  value
Above $30 million1.087 man-years per $1 million  value

Source: MOM

month levy of between $300 to $950 has to be paid for each S Pass holder, depending on their source country and skill level (basic-skilled or higher-skilled).

Manufacturing Sector

Eligible businesses can hire work permit holders to comprise up to 60% of your total workforce. Employees who comprise your total workforce are those who earn at least $1,400 per month. For local employees who earn between $700 to $1,400 a month, they will be counted as 0.5 local employees. Note that from 1 September 2022, your business will have to pay all local employees the Local Qualifying Salary of $1,400 to be eligible to hire any foreign workers.

month levy of between $250 to $650 has to be paid for each S Pass holder, depending on the number of Work Permit holders in your business and their skill level (basic-skilled or higher-skilled).

Marine Shipyard Sector

Eligible businesses can hire 3.5 work permit holders for every local employee who earns at least $1,400 per month. For local employees who earn between $700 to $1,400 a month, they will be counted as 0.5 local employees. Note that from 1 September 2022, your business will have to pay all local employees the Local Qualifying Salary of $1,400 to be eligible to hire any foreign workers.

month levy of between $300 to $400 has to be paid for each S Pass holder, depending on their source country and skill level (basic-skilled or higher-skilled).

Process Sector

Eligible businesses can hire 7 work permit holders for every local employee who earns at least $1,400 per month. For local employees who earn between $700 to $1,400 a month, they will be counted as 0.5 local employees. Note that from 1 September 2022, your business will have to pay all local employees the Local Qualifying Salary of $1,400 to be eligible to hire any foreign workers.

A “man-year entitlement (MYE)” criteria also applies to the process sector (except for Malaysian and North Asian Sources workers). 1 man-year = 1 year of employment under a Work Permit. How many man-years you are entitled to is based on your building project value:

For building project under $10 million:

Project ValueMan-Year Entitlement (MYE)
Less than $500,0000
First $1 million1.65 man-years per $100,000 value
Next $9 million9.903 man-years per $1 million  value

Source: MOM

For building project above $10 million:

Project ValueMan-Year Entitlement (MYE)
Less than $500,0000
First $1 million1.523 man-years per $100,000 value
Next $9 million9.141 man-years per $1 million  value
Next $20 million6.094 man-years per $1 million  value
Next $70 million4.062 man-years per $1 million  value
Next $100 million3.047 man-years per $1 million  value

Source: MOM

For civil engineering projects:

Project ValueMan-Year Entitlement (MYE)
Less than $500,0000
First $1 million0.677 man-years per $100,000 value
Next $9 million4.062 man-years per $1 million  value
Next $20 million2.708 man-years per $1 million  value
Above $30 million1.354 man-years per $1 million  value
Next $100 millionCase-by-case basis

Source: MOM

month levy of between $300 to $750 has to be paid for each S Pass holder, depending on their source country and skill level (basic-skilled or higher-skilled).

Services Sector

Services sector refers to:

  • Financial, insurance, real estate, infocomm and business services.
  • Transport, storage and communications services.
  • Commerce (retail and wholesale trade).
  • Community, social and personal services (excluding domestic workers).
  • Hotels.
  • Restaurants, coffee shops, food courts and other approved food establishments (excluding food stalls or hawker stalls).

Eligible businesses can hire work permit holders to comprise up to 35% of your total workforce. Employees that comprise your total workforce are those who earn at least $1,400 per month. For local employees who earn between $700 to $1,400 a month, they will be counted as 0.5 local employees. Note that from 1 September 2022, your business will have to pay all local employees the Local Qualifying Salary of $1,400 to be eligible to hire any foreign workers.

month levy of between $300 to $800 has to be paid for each S Pass holder, depending on the number of Work Permit holders in your business and their skill level (basic-skilled or higher-skilled).

This article was first published on 28 January 2021 and has been updated to reflect changes in the foreign worker quota or sub-Dependency Ratio Ceiling (DRCs) following Budget 2021.

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