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WORK PERMIT

SINGAPORE FOREIGN WORKER LEVY SCHEME

Singapore, as a developed country and an economy with relatively steady growth requires a strong workforce to keep the systems and processes in top-notch condition.

The Foreign Worker Levy (FWL) is a pricing mechanism instituted by the Singapore Ministry of Manpower to control and regulate the number of foreign workers in the country. Under the FWL scheme, employers of foreign workers are required to pay a monthly levy to the government.

The number of foreign workers any one company can employ is also regulated by the Dependency Ratio Ceiling (DRC) system, which dictates maximum permitted ratio of foreign workers to total workforce of the company. The DRC varies across sectors.

Scope of the Scheme

The scheme applies to Work Permit holders and S Pass holders.

Levy for Work Permit holders

The levy rate for Foreign Workers varies across different sectors. The levy to be paid for each worker is basically determined by the sector in which the employer/company operates, and the educational qualifications and skills possessed by the worker. Workers with relevant qualifications and skill-based test certificates will be classified as skilled workers, and their employers will be entitled to a concession in the worker’s levy.

Monthly levy rates have been stipulated for the sectors by MOM. For Work Permit holders who are not employed for a full calendar month, a daily levy rate applies.

From 1 January 2011, the daily levy rate is computed based on the following formula:

Sector-specific Requirements

For Construction Sectors

The Foreign Worker Levy is determined by the worker’s qualification and skills. In the construction sector, FWL is charged based on whether the worker is higher-skilled or basic skilled, whereas for most other sectors, the workers are classified as skilled or unskilled.

For Manufacturing & Service Sectors

The worker’s qualifications and the DRC quota for the sector together determine the levy amount. It must be noted that the rates are tiered so that employers who hire close to the maximum quota will incur a higher levy bill.

The table below illustrate the levies payable across different sectors in different tiers.

Sector Quota| Dependency Ceiling Segmentation| Monthly Levy in S$ Daily Levy in S$
Skilled| Unskilled| Skilled| Unskilled|

Manufacturing

Employers in this sector are entitled to skilled levy rates for their foreign workers, up to 50% of the total workforce.

60% Basic Tier / Tier 1: Up to 25% of the total workforce 210 310 6.91 10.2
Tier 2: From 25% to 50% of the total workforce 300 400 9.87 13.16
Tier 3: From 50% to 60% of the total workforce 470 15.46

Services 

Employers in this sector are entitled to skilled levy rates for their foreign workers, up to 25% of the total workforce.

45% Basic Tier / Tier 1: Up to 15% of the total workforce 240 340 7.9 11.18
Tier 2: From 15% to 25% of the total workforce 360 460 11.84 15.13
Tier 3: From 25% to 45% of the total workforce 500 16.44
Construction* 87.50% On Man Year Entitlement (MYE)** 250 350 8.22 11.51
MYE Exempt ** 500 11.51
Process 87.50% On Man Year Entitlement (MYE)** 210 310 6.91 10.2
MYE Exempt ** 470 15.46
Marine 83.30% Basic 210 310 6.91 10.2

*For the purpose of calculating the levy, workers in the construction sector are classified into

  • Higher skilled workers
  • Basic Skilled workers

Note
MOM uses the following order of priority to determine the respective tiers of foreign workers

  • S Pass holders
  • Skilled workers
  • Unskilled workers

The Man-Year Entitlement (MYE) system is a Work Permit allocation system introduced in April 1998 for workers from Non-Traditional Source (NTS) countries deployed in the Construction and Process sectors. Under the system, the main contractor is allocated “man-years” based on the value of the project. The purpose of the MYE is to provide a means for the main contractor to control and manage the foreign worker allocation for the project. The main contractor can then distribute the MYE to sub-contractors. The MYE will be converted into either one-year or two-year Work Permits.

MYE is waived / exempted for workers from NTS if the worker has relevant experience of a cumulative period of two or more years with any employer in Singapore. However, the employer will have to pay a higher monthly levy rate for such a worker. A main contractor with a valid construction contract can apply for Man-Year Entitlement (MYE) from the Work Pass Division (WPD).

Key Consideration for Workers Classification Based on Skills

Workers who possess relevant academic or skills-based test qualifications and certificates will be classified as skilled workers.

Levy for S-Pass Holders

Sector Quota| Dependency Ceiling Segmentation Skilled worker Levy in S$
Monthly Daily
All Sectors 20% Basic Tier / Tier 1: Up to 10% of the total workforce 200 6.58
Tier 2: From 10% to 20% of the total workforce 320 10.53

 

S pass is a work pass given to workers with specialized skills who meet the educational qualification requirements, have significant experience, and meet the salary stipulations set by MOM. Therefore, there is no unskilled category here.

Skill Development Levy

Employers are required to contribute to the Skills Development Fund. The Skill Development Levy (SDL) is applicable to all employees rendering services wholly or partly in Singapore. The SDL is set at a minimum of S$2 (for an employee earning less than S$800 a month) and capped at S$11.25 (for an employee earning more than S$4,500 a month).

Employers employing foreign workers are required to pay SDL in addition to the Foreign Workers Levy (FWL).

The CPF Board collects the Skills Development Levy on behalf of the Singapore Workforce Development Agency. The levy collected is channelled into the Skills Development Fund (SDF), which provide grants to companies that send their workers for training.

Engage Our Service

We provide Work Permit Application services at $250/applicant, and charge an additional S$200 to open an MOM account if required

Lead Time For Service

Case-by-Case Basis - Let's talk!

Compliance with Local Laws

Why do you need a Corporate Secretary?

Section 171 of the Singapore Companies Act, Chapter 50 requires ALL Singapore Companies to appoint a Singapore Company Secretary to handle on-going statutory compliance matters.

Corporate Secretary Services

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