Singapore Foreign Worker Levy (FWL)

Singapore Foreign Worker Levy (FWL)

What is the Foreign Worker Levy in Singapore?

If you employ Work Permit or S Pass holders you may be limited by a quota for your industry. You will also have to pay a monthly levy for each Work Permit or S Pass holder in Singapore.

The foreign worker levy, commonly known as “levy”, is a pricing mechanism to regulate the number of foreign workers in Singapore.

The levy liability will start from the day the Temporary Work Permit, Work Permit or S Pass is issued, whichever is earlier. It ends when the permit is cancelled or expires.

As an employer, you don’t have to pay Central Provident Fund (CPF) contributions for foreign workers. However, you must pay a monthly levy for Work Permit and S Pass holders.

 

Levy rate and quota

The Foreign Worker Levy you pay generally depends on two factors:

  1. The worker’s qualifications.
  2. The number of Work Permit or S Pass holders hired.

The FWL quota and rate vary according to the following respective sectors:

* Note: Levy rates are regularly reviewed and adjusted as required. See the upcoming levy rates announced in Budget 2019

Worker’s qualifications

Workers who possess relevant academic or skills-based test qualifications and certificates will be considered as higher-skilled workers and qualify for higher skilled worker levy.

Dependency ratio ceiling

A dependency ratio ceiling, or quota, is the maximum ratio of foreign workers to the total workforce that a company in a given sector can employ.

Higher-skilled worker levy

Upgrading your worker to higher-skilled status will reduce your levy bill. The exact levy rate depends on your sector.

You pay a lower levy for workers with higher-skilled status.

Criteria for higher-skilled worker levy by sector

The requirements your worker must meet to be on the higher-skilled levy rate are different for each sector:

Apply for higher-skilled worker levy

For construction sector

Your worker can get higher-skilled status by completing one of the four upgrading options.

Click here to learn more about four upgrading options to apply for higher-skilled worker levy for Construction Sector.

 

For manufacturing, marine shipyard, process or services sector

  1. Complete and sign the application form for conversion to Higher-Skilled Levy. If your company is in the harbour craft industry, use the application form for conversion to Higher-Skilled Levy (for Harbour Craft industry).
  2. Prepare clear copies of these supporting documents:
    • Worker’s educational or trade test certificates.
    • For diploma or higher qualifications, you need to submit additional documents:
If worker hasNeed additional documents
Diploma or higher qualifications from ChinaCertificate of graduation and verification proof.

·         You can get the verification proof directly in English from sources such as DataflowChina Higher Education Student Information and Career Center or China Academic Degrees & Graduate Education Information.

·         Education certificates certified by a notary public are not accepted as a form of verification proof.

Diploma or higher qualifications from other countriesTranscript or letter from the institution stating the course duration.
  1. Submit the completed application form and supporting documents using iSubmit. Under Request Type, choose option 9.

For non-English documents, you must submit a copy of the original document and an English translation. The translation can be done by a translation service provider.

Welding trade test for process and marine shipyard sectors

To meet the trade test component of the higher-skilled worker levy criteria, your worker’s welding trade test must be endorsed by any of these institutions:

  • American Bureau of Shipping
  • Bureau Veritas Singapore Pte Ltd
  • DNV GL
  • Lloyd’s Register of Shipping
  • Nippon Kaiji Kyokai
  • Singapore Test Services
  • Setsco Services
  • Common Welder Qualification Scheme conducted by the Singapore Welding Society

 

S Pass quota and levy requirements

The number of S Pass holders you can hire is limited by a quota. You must also pay a monthly levy for these workers.

What is the foreign worker levy

The foreign worker levy, commonly known as “levy”, is a pricing mechanism to regulate the number of foreign workers in Singapore.

As an employer, you must pay the levy for all your S Pass holders. The levy liability starts from the day the S Pass is issued and ends when the pass is cancelled or expires.

You have to pay the levy using GIRO.

Levy rates are regularly reviewed and adjusted as required. See the upcoming levy rates announced in Budget 2019.

Quota requirement

If you have never applied for a Work Permit or S Pass, you need to declare your business activity for calculating your quota.

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

  • 15% of the company’s total workforce in the services sector.
  • 20% in all other sectors.

You can refer to MOM at www.mom.gov.sg for calculating your Quota or to the Guidelines on the Calculation of Quota and Levy Bill.

  • Employers who exceed the quota will need to increase their local workforce or reduce the number of foreign workers.
  • With effect from 1 Jan 2020 and 1 Jan 2021, the number of S Pass holders a company in the services sector can hire is capped at 13% and 10% of the total workforce respectively.

Levy rate

For the services sector, the levy rate is as follows:
TierQuota %Monthly levy rateDaily levy rate
Basic/Tier 1Up to 10% of the total workforce$330$10.85
Tier 2Above 10% to 15% of the total workforce$650$21.37
For all sectors (excluding services), the levy rate is as follows:
TierQuota %Monthly levy rateDaily levy rate
Basic/Tier 1Up to 10% of the total workforce$330$10.85
Tier 2Above 10% to 20% of the total workforce$650$21.37

Note:

  • For all sectors, the S Pass quota will be counted within the Work Permit quota.
  • The daily levy rate applies only to S Pass holders who did not work for a full calendar month. The daily levy rate is calculated as follows: (Monthly levy rate x 12) / 365 = rounding up to the nearest cent.

 

Levy Waiver For Foreign Worker

You can get a waiver for your foreign worker levy payments only in certain specific situations. These include overseas leave and hospitalisation leave.

Learn more about Levy Waiver For Foreign Worker

 Source of Information for all Work Passes & their related matters is from the Ministry Of Manpower, Singapore.

Please refer to MOM website at www.mom.gov.sg for more detailed information and up-to-date guidelines with regulations.

 

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