Hiring foreign workers can help Singapore businesses address skills shortages, expand operational capacity and access a broader talent pool. However, employing certain foreign workers also comes with additional costs and regulatory responsibilities.
One of these costs is the Foreign Worker Levy.
The Foreign Worker Levy is a monthly payment that employers must make for every Work Permit holder and S Pass holder they employ. The amount payable depends on factors such as the worker’s pass type, skill level, employment sector and the company’s foreign worker quota.
Understanding how the levy works can help you calculate employment costs accurately, maintain your workforce quota and avoid penalties.
What is the Foreign Worker Levy?
The Foreign Worker Levy is a pricing mechanism used by the Singapore Government to regulate the number of foreign workers in the country.
Employers must pay the levy for eligible foreign employees in addition to their salaries and other employment costs. The levy is paid directly by the employer to the Ministry of Manpower.
The levy generally applies to:
- Work Permit holders
- S Pass holders
Employment Pass holders are not subject to the Foreign Worker Levy.
The levy is not a form of salary, tax or Central Provident Fund contribution. It is a separate monthly employer obligation linked to the worker’s employment pass.
According to the Ministry of Manpower, levy liability for an S Pass holder begins when the pass is issued and ends when the pass expires or is cancelled. Similar liability rules apply to Work Permit holders.
Who Must Pay the Foreign Worker Levy?
The employer named on the employee’s Work Permit or S Pass is responsible for paying the levy.
Employers are not allowed to deduct the levy from a foreign worker’s salary or require the worker to reimburse the company. This applies even if the worker has agreed to the deduction.
Employers who attempt to recover the levy from workers may face fines, imprisonment or restrictions on hiring foreign workers.
For accurate workforce budgeting, employers should treat the levy as part of the total cost of employment.
How Much is The Foreign Worker Levy in Singapore?
There is no single levy rate for every foreign worker.
The amount depends on:
- Whether the employee holds a Work Permit or S Pass
- The company’s assigned sector
- The worker’s skill classification
- The worker’s source country or region for certain sectors
- The company’s position within its foreign worker quota
- Whether the employee worked for a full calendar month
The rates below are based on Ministry of Manpower information available in July 2026. Employers should confirm the applicable rate through the Ministry of Manpower before making workforce decisions.
S Pass Levy Rate
Since 1 September 2025, the monthly levy for S Pass holders has been standardised across all sectors and levy tiers.
| Levy period | S Pass levy |
| Full calendar month | S$650 per month |
| Partial calendar month | S$21.37 per day |
The daily levy applies when the S Pass holder does not work for a full calendar month.
Work Permit Levy Rates for the Services Sector
The services sector has three levy tiers. Companies that employ foreign workers closer to the maximum quota pay a higher levy.
| Quota tier | Basic skilled monthly rate | Higher skilled monthly rate |
| Tier 1, up to 10% of total workforce | S$450 | S$300 |
| Tier 2, above 10% to 25% | S$600 | S$400 |
| Tier 3, above 25% to 35% | S$800 | S$600 |
The corresponding daily rates range from S$9.87 to S$26.31, depending on the tier and skill level. Ministry of Manpower
Work Permit Levy Rates for The Manufacturing Sector
| Quota tier | Basic skilled monthly rate | Higher skilled monthly rate |
| Tier 1, up to 25% of total workforce | S$370 | S$250 |
| Tier 2, above 25% to 50% | S$470 | S$350 |
| Tier 3, above 50% to 60% | S$650 | S$550 |
The manufacturing levy increases as a company uses more of its available foreign worker quota.
Work Permit Levy Rates for The Construction Sector
Construction levy rates depend on the worker’s source country or region, skill status and whether the worker qualifies for an off site construction rate.
| Worker category | Monthly levy | Daily levy |
| NTS, higher skilled | S$500 | S$16.44 |
| NTS, basic skilled | S$900 | S$29.59 |
| Malaysia, NAS or PRC, higher skilled | S$300 | S$9.87 |
| Malaysia, NAS or PRC, basic skilled | S$700 | S$23.02 |
| Off site construction, higher skilled | S$250 | S$8.22 |
| Off site construction, basic skilled | S$370 | S$12.17 |
Workers whose Work Permits are approved or issued without the required certification may be charged an unskilled levy of S$900 per month.
Work Permit Levy Rates for the Process Sector
| Worker category | Monthly levy | Daily levy |
| NTS, higher skilled | S$300 | S$9.87 |
| NTS, basic skilled | S$650 | S$21.37 |
| Malaysia, NAS or PRC, higher skilled | S$200 | S$6.58 |
| Malaysia, NAS or PRC, basic skilled | S$450 | S$14.80 |
The process sector includes businesses involved in areas such as petroleum, petrochemicals, specialty chemicals and pharmaceutical production. Specific rules apply to process construction and maintenance contractors.
Work Permit Levy Rates for The Marine Shipyard Sector
| Skill classification | Monthly levy | Daily levy |
| Higher skilled | S$350 | S$11.51 |
| Basic skilled | S$500 | S$16.44 |
To be classified under this sector, a company must meet the Ministry of Manpower’s requirements for shipyards or shipyard sponsored contractors. Conducting general marine related activities alone may not be sufficient.
How is the Foreign Worker Levy Calculated?
For a worker employed for a complete calendar month, the employer pays the applicable monthly levy rate.
For a partial calendar month, the daily rate is calculated using this formula:
Daily levy rate = Monthly levy rate × 12 ÷ 365
The result is rounded up to the nearest cent.
Foreign Worker Levy Calculation Example
Suppose a higher skilled Work Permit holder in the first services sector tier is subject to a monthly levy of S$300.
The daily rate would be:
S$300 × 12 ÷ 365 = S$9.87 per day
If the levy is payable for 15 days, the estimated amount would be:
S$9.87 × 15 days = S$148.05
The actual bill should always be checked through the Ministry of Manpower’s levy service because adjustments, waivers and changes in worker status may affect the final amount.
What is The Foreign Worker Quota?
The foreign worker quota determines the maximum proportion of Work Permit and S Pass holders a company may employ.
It is also known as the Dependency Ratio Ceiling.
The current ceilings are:
| Sector | Dependency Ratio Ceiling |
| Construction | 83.30% |
| Process | 83.30% |
| Marine shipyard | 75% |
| Manufacturing | 60% |
| Services | 35% |
For example, a services company cannot have Work Permit and S Pass holders representing more than 35% of its total workforce.
Additional limits apply to S Pass holders:
| Sector | Maximum S Pass proportion |
| Services | 10% of total workforce |
| Construction | 15% of total workforce |
| Manufacturing | 15% of total workforce |
| Marine shipyard | 15% of total workforce |
| Process | 15% of total workforce |
Companies may also be subject to source specific quotas. For example, Work Permit holders from the People’s Republic of China are capped at 8% of the total workforce in services and 25% in manufacturing.
How are Local Employees Counted for The Quota?
The number of local employees affects how many Work Permit and S Pass holders a company can employ.
A Singapore citizen or Permanent Resident employed under a contract of service is generally counted as:
| Monthly salary | Local employee count |
| At least S$1,800 | 1 local employee |
| At least S$900 but below S$1,800 | 0.5 local employee |
| Below S$900 | Not counted |
These thresholds are based on the Local Qualifying Salary in effect at the time of writing.
The Ministry of Manpower uses salary and CPF information to determine the company’s local workforce. Late or inaccurate CPF submissions can affect the quota calculation and may cause foreign workers to be allocated to higher levy tiers.
For S Pass quota purposes, the local employee count is based on the company’s average local workforce over the previous three months.
What is The Higher Skilled Worker Levy?
Employers may pay a lower levy for Work Permit holders who qualify as higher skilled workers.
The qualifying requirements differ by sector and may include:
- Recognised academic qualifications
- Relevant skills assessments
- Workforce Skills Qualifications
- Trade certifications
- Minimum salary requirements
- A required period of employment in Singapore
For example, a worker in the services or manufacturing sector may qualify through recognised academic or technical qualifications. Alternatively, the worker may qualify under the Market Based Skills Recognition Framework by earning at least S$1,600 per month and having worked in Singapore as a Work Permit holder for at least four years.
Employers should confirm the applicable criteria before forecasting savings. A salary increase or qualification alone does not automatically guarantee a lower levy rate. The worker’s status must be recognised by the Ministry of Manpower.
When Must Employers Pay The Levy?
The levy for each month must generally be paid by the 17th of the following month.
If the 17th falls on a Saturday, Sunday or public holiday, the payment is due on the next working day.
Employers can pay through:
- GIRO
- PayNow QR, if there is no active GIRO arrangement
The latest levy bill is normally available online from the third working day of each month. Employers using GIRO should maintain sufficient funds and ensure that any deduction limit is high enough to cover the bill.
What Happens if The Foreign Worker Levy is Paid Late?
Failure to pay the full levy on time can result in serious consequences.
These may include:
- Late payment penalties
- Revocation of existing Work Permits and S Passes after levy payments are missed for two consecutive months
- Restrictions on new Work Permit applications
- Legal action to recover the unpaid amount
- Hiring restrictions affecting other companies headed by the same directors or partners
Repeated late payments may also result in a company being required to provide a levy bond.
Because the consequences can affect business operations, companies should reconcile levy bills monthly and investigate unexpected changes immediately.
When Can an Employer Apply for a Levy Waiver?
A levy waiver may be available in specific situations, including when a worker:
- Attends the Onboard programme at an Onboard centre
- Goes on overseas leave for at least seven consecutive days
- Receives hospitalisation leave from a Singapore registered doctor at a local medical institution
- Is held in police or embassy custody
- Passes away
- Serves Malaysian National Service
- Works on board a vessel that leaves Singapore’s port for at least three consecutive days, subject to applicable harbour craft requirements
Overseas leave and hospitalisation waivers are generally capped at 60 calendar days per worker in each calendar year.
An employer can apply from the first day of the month after receiving the relevant levy bill. The application must be submitted within one year of the levy bill.
How to Manage Foreign Worker Levy Costs
The goal should be to manage levy costs through accurate planning and compliance, rather than simply choosing the lowest apparent levy rate.
1. Calculate The Total Cost of Employment
Salary is only one part of the cost of hiring a foreign worker.
Your budget may also need to cover:
- Foreign Worker Levy
- Work pass application and renewal fees
- Medical insurance
- Primary Care Plan requirements
- Security bond, where applicable
- Accommodation and transportation
- Mandatory medical examinations
- Training and certification
- Repatriation costs
A complete cost model provides a more accurate comparison between candidates and hiring arrangements.
2. Monitor Your Quota Before Hiring
Check your available quota before offering a role or submitting a work pass application.
Hiring an additional foreign worker may move existing workers into a higher levy tier, particularly in the services and manufacturing sectors. This means the cost impact may be greater than the levy for one new employee.
3. Keep CPF Records Accurate
The Ministry of Manpower relies on CPF and salary information to calculate the local workforce.
Late submissions, incorrect salary declarations or missing CPF payments can reduce the local employee count used for quota purposes. This may affect your ability to hire and could increase your levy costs.
4. Check Higher Skilled Eligibility
Review whether eligible Work Permit holders have the qualifications, certifications, salary or local experience required for higher skilled status.
Track certificate expiry dates and submit changes promptly. When a worker’s skill status changes, the new levy rate may only begin from the first day of the following month.
5. Apply for Eligible Waivers on Time
Maintain records of overseas leave, hospitalisation and other qualifying situations. Assign responsibility for reviewing waiver eligibility against each monthly bill.
Applications submitted after the one year deadline may no longer be considered.
6. Reconcile Levy Bills Every Month
Compare each levy bill against:
- Active Work Permits and S Passes
- Pass issue and cancellation dates
- Worker skill classifications
- Applicable levy tiers
- Approved waiver periods
- Recent workforce changes
Early reconciliation makes it easier to identify errors before they become repeated or more costly.
Common Foreign Worker Levy Mistakes
1. Deducting the Levy From a Worker’s Salary
The levy is the employer’s responsibility. It cannot be passed to the employee through a salary deduction.
2. Assuming Every Foreign Employee is Subject to The Levy
The levy applies to Work Permit and S Pass holders. It does not apply to Employment Pass holders.
3. Looking Only at The Monthly Salary
The levy can materially change the total cost of employing a foreign worker. Employers should calculate salary, levy, insurance, pass fees and other mandatory costs together.
4. Ignoring The Effect of Quota Tiers
Adding one worker may change the company’s quota position and place workers in a more expensive levy tier.
5. Cancelling a Pass Late
Levy liability generally continues until the pass expires or is cancelled. Employers should complete cancellation promptly after an employee’s last day, subject to all legal and repatriation responsibilities.
6. Missing Eligible Waivers
Employers may continue paying the full levy if overseas leave, hospitalisation or another qualifying event is not properly tracked.
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Frequently Asked Questions about the Foreign Worker Levy
Is the Foreign Worker Levy the same as CPF?
No. The levy is a monthly payment made by an employer for a Work Permit or S Pass holder. CPF is Singapore’s social security savings system and generally applies to Singapore citizens and Permanent Residents.
Do employers pay a levy for Employment Pass holders?
No. Employment Pass holders are not subject to the Foreign Worker Levy.
Can the levy be deducted from the employee’s salary?
No. Employers cannot recover levy costs from their foreign workers through salary deductions or other payments.
Does the levy apply while a worker is on leave?
Levy generally continues to be charged. However, employers may apply for a waiver when the worker meets specific conditions, such as taking at least seven consecutive days of overseas leave.
When does levy liability end?
Liability generally ends when the employee’s Work Permit or S Pass expires or is cancelled. Employers should not assume that liability ends automatically on the worker’s last working day.
Is the Foreign Worker Levy tax deductible?
Business expenses may be deductible when they are incurred in producing income and meet the applicable tax requirements. Employers should confirm the treatment of levy expenses with the Inland Revenue Authority of Singapore or a qualified tax adviser.
Conclusion
The Foreign Worker Levy is an important part of the cost and compliance requirements associated with employing Work Permit and S Pass holders in Singapore.
The amount your company pays can vary according to the employee’s pass, sector, skill status and your use of the available foreign worker quota. Accurate CPF records, regular quota reviews and timely pass administration can help you avoid unexpected costs.
Before hiring, calculate the complete employment cost and confirm that your company has sufficient quota. After the worker joins, monitor levy bills, pass dates and waiver eligibility every month.
