Quota Calculation & LQS

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Quota Calculation And Local Qualifying Salary (LQS) In Singapore

Facts on Local Qualifying Salary infographicHow should I count my local employees to calculate my Work Permit and S Pass quota in Singapore?

Your local employee must earn the Local Qualifying Salary (LQS) of at least $1,300 before they can be counted towards your quota entitlement. LQS is set to be increased to at least $1,400 with effect from 01-July-2020 as announced in the Parliament on 03-Mar-2020.

 

 

Qualifying Salary From 01-July-2019 Till 30-June-2020:

A Singaporean or Permanent Resident employee employed under a contract of service, including the company’s director, is counted as:

  • 1 local employee if they earn the LQS of at least $1,300 per month.
  • 0.5 local employee if they earn half the LQS of at least $650 to below $1,300 per month.
Qualifying Salary From 01-July-2020:

 

A Singaporean or Permanent Resident employee employed under a contract of service, including the company’s director, is counted as:

  • 1 local employee if they earn the LQS of at least $1,400 per month.
  • 0.5 local employee if they earn half the LQS of at least $700 to below $1,400 per month.

 

Illustration:

Effective:
W.E.F. 01-July-2019 TILL 30-June-2020
W.E.F. 01-July-2020 ONWARD

Local employee

Monthly salary

Count

Monthly salary

Count

A

$4,500

1.0

$4,500

1.0

B

$1,300

1.0

$1,400

1.0

C

$650

0.5

$750

0.5

D

$800

0.5

$900

0.5

E

$400

—

$650

—
Total number of local employees

3

3
Remarks
  • Employees A and B are considered 2 local employees because they each earn at least $1,300.
  • Employees C and D make up 1 local employee because they each earn $650 to below $1,300.
  • Employee E is not counted because the salary is below $650.
  • Employees A and B are considered 2 local employees because they each earn at least $1,400.
  • Employees C and D make up 1 local employee because they each earn $700 to below $1,400.
  • Employee E is not counted because the salary is below $700.

 

blankThe following employees are also not counted when calculating your quota:
  • Business owners of sole proprietorships or partnerships.
  • Employees who receive CPF contributions from three or more employers.
  • First year PRs (Permanent Residents) with gradual CPF contribution.
  • Second year PRs (Permanent Residents) with gradual CPF contribution.
  • Aged employees with lowered CPF contribution.

If you have multiple CPF accounts in your company, you should not contribute CPF for the same employee under the different accounts to get more quota.

If you hired new employees recently, you won’t see an immediate adjustment in your quota. It depends on when you pay the CPF contribution for each employee.

 

What is the Local Qualifying Salary (LQS)?

The Local Qualifying Salary (LQS) determines the number of local employees who can be used to calculate your Work Permit and S Pass quota entitlement. The LQS was previously known as the Full-Time Equivalent salary.

The LQS ensures that local workers are employed meaningfully, rather than being employed on token salaries to allow the employer access to foreign workers. This also ensures that our quota controls remain effective and keep pace with income levels.

Qualifying Salary From 01-July-2019 Till 30-June-2020:

A Singaporean or Permanent Resident employee employed under a contract of service, including the company’s director, is counted as:

  • 1 local employee if they earn the LQS of at least $1,300 per month.
  • 0.5 local employee if they earn half the LQS of at least $650 to below $1,300 per month.
Qualifying Salary From 01-July-2020:

A Singaporean or Permanent Resident employee employed under a contract of service, including the company’s director, is counted as:

  • 1 local employee if they earn the LQS of at least $1,400 per month.
  • 0.5 local employee if they earn half the LQS of at least $700 to below $1,400 per month.

 

Updating of Local workforce Quota

When the Local Workforce Quota is updated by MOM?

Local workforce is determined by the average of CPF contributions over a three-month period updated on the second working day and second Saturday of each month.

 

When can a new company (entity) start hiring foreign workers?

I have set up a new company. When can I start hiring foreign workers?

If you are a newly set up company and you have not made any CPF contributions yet, your quota for first month will be calculated based on your first CPF contribution, instead of the normal 3-month average.

Thereafter, your foreign worker quota is calculated based on the 3-month average number of local employees you have.

 

When can a existing company (entity) start hiring foreign workers?

I have hired new employees. When can I start hiring additional foreign workers?

Your foreign worker quota is calculated based on the latest 3-month average number of local employees in your company.

The number of local employees is based on the CPF contribution you have made to them, under the same company CPF account.

Eg: If you pay your employees’ July CPF contributions after 14 July, the quota will be calculated based on your number of local employees in May, June, July’s CPF contributions. This quota will only be updated in September.

However if you want the quota to be updated earlier, i.e. August, you should make your CPF contributions by 14 July.

 

Computation of Total Workforce

How the Total Workforce is computed by MOM?

MOM Service Sector Quota IllustrationMOM has regularised with some changes how a company’s foreign worker quota is computed (calculated) with effect from 01-Jan-2021.

Changes to total workforce computation (calculation)

  • The total workforce refers to the number of local workers whose salaries meet the local qualifying salary (LQS) and number of S Pass and Work Permit holders hired by the company.
  • The company’s foreign workforce quota changes as your company’s total workforce changes. When processing any work pass application / appeal, MOM will look at your company’s latest quota status. This means that any fluctuations in your company’s quota after the date of work pass application may affect the outcome of the application.
  • You may wish to use the Quota Calculator on MOM website to check on your work pass quota entitlement.
Total Workforce computation w.e.f. 01-Jan-2021
  • The foreign workers will be counted after their work passes are issued.
  • That means, foreign workers are not counted into the company’s total workforce as soon as their work passes are approved in principle till their work passes are eventually issued.
Total Workforce computation Till 31-Dec-2020
  • Foreign workers were counted into the company’s total workforce as soon as their work passes were approved in principle, even if their work passes were not eventually issued.
Click here to learn about the new computation from an Illustration.

 

Source of Information:

For all types of Work Passes with their related matters is from the Ministry Of Manpower (MOM), TAFEP &/or Immigration And Checkpoints Authority (ICA), Singapore accordingly.

For all other matters are from the relevant Authorities or Agencies of Government of Singapore.

 

ACHI BIZ is one of the licensed Employment Agencies in Singapore. We will assist your work pass related applications and appeals at our level best with the regulatory authority Ministry Of Manpower (MOM) for successful outcome.
Please refer to our GUIDES for more information, SERVICES to meet your requirements or CONTACT us if you wish to avail these or many other services.
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