Navigating the intricacies of minimum wage regulations is crucial for employers in Singapore. In this comprehensive guide, we delve into the specifics of minimum wage, its impact on businesses, minimum wage requirements for different work passes (Employment Pass, S Pass and Work Permit). Stay informed and compliant with our essential insights!
What is the minimum wage?
The minimum wage serves as a fundamental aspect of labour regulation, ensuring that employees receive a fair and reasonable level of compensation for their work. It is established by governmental bodies to set a baseline standard for wages, aiming to prevent exploitation, alleviate poverty, and promote social welfare. By implementing minimum wage laws, authorities aim to address income inequality and provide workers with financial stability and dignity.
What is the minimum wage in Singapore?
Singapore has no minimum wage laws or regulations. Instead, Singapore adopts the Progressive Wage Model (PWM) which aims to help uplift lower-wage workers’ wages through upgrading skills and improving productivity. Some sectors that are covered by PWM include:
Cleaning
Security
Landscape
Life and escalator
Retail
Food services
Occupational PWs for administrators and drivers
Waste management
How does the minimum wage for Local Qualifying Salary (LQS) impact businesses in Singapore?
Since 1 September 2022, firms employing foreign workers need to pay and fulfil all the requirements:
PWs to local workers covered by the relevant Sectoral or Occupational PWs in cleaning, security, landscape maintenance, and retail sectors, and in-house workers covered by the PWM
At least the Local Qualifying Salary (LQS) to all other local workers
The number of local workers earning the LQS determines the firm’s foreign worker quota entitlement. Currently, a Singaporean or Permanent Resident employee employed under a contract of service is counted as:
1 local worker if they earn the LQS of at least $1,400 per month.
0.5 local worker if they earn half the LQS of at least $700 to below $1,400 per month.
With the recent announcement in the Singapore Budget 2024, the LQS will increase from $1,400 to $1,600 starting July 1, 2024. Consequently, businesses hiring foreign workers must adapt to meet new quota requirements and budget for potential increases in manpower costs to maintain their workforce composition. Non-compliance with these requirements may lead to the inability to renew existing work passes or apply for new ones.
Tip: To ensure compliance with regulations and avoid penalties, it's crucial to understand the foreign worker quota and foreign worker levy. Stay updated with these essential guides if you're hiring foreign workers:
What is the minimum hourly wage for Local Qualifying Salary (LQS) in Singapore?
According to Minister of Manpower (MOM), the LQS requirement for the minimum hourly wage is as follows:
For locals working part-timei.e. < 35 hours/week
≥ $9/hr gross For monthly rated part-timers, the hourly gross rate is calculated as follows to check if it meets the ≥ $9/hr gross requirement: (total monthly gross wages) ÷ (total hours worked for the month)
Example:
Josh is a part-time local worker at ABC Company. He dedicates 20 hours per week to the job, earning a gross monthly wage of S$800.
Hourly gross rate = (total monthly gross wages) ÷ (total hours worked for the month)
Since Josh’s hourly wage of $10/hr is more than the LQS of $9/hr and his monthly wage is more than $700 but less than $1,400, he will be counted as a 0.5 local worker.
Note: As announced in Singapore Budget 2024, the minimum part-time hourly rate to meet LQS will increase from $9 per hour to $10.50 per hour, effective from 1 July 2024 onwards.
What is the minimum wage requirement for an Employment Pass (EP) in Singapore?
An EP is a kind of work pass that allows foreign professionals, managers, and executives to work in Singapore. Candidates need to have an employment offer in Singapore before they can apply for an EP.
EP candidates need to earn at least:
Current criteria:
$5,000 a month (in general)
$5,500 a month (for financial services)
From 1 January 2025, the EP qualifying salary:
$5,600 a month (in general)
$6,200 a month (for financial services)
Applicants with more work experience will also correspondingly require a higher salary to qualify.
Tip: Applying an EP for your employee? Head over to our comprehensive Employment Pass guide for employers in Singapore, which includes the application process, eligibility requirements, and documentation needed.
What is the minimum wage requirement to obtain an S Pass for skilled foreign workers?
The S Pass is a mid-level work visa for skilled workers. It is targeted at individuals who do not qualify for the Employment Pass but possess relevant qualifications and work experience.
Candidates need to earn at least:
Current criteria:
$3,150 a month (in general)
$3,650 a month (for financial services)
Minimum qualifying salary for new applications from 1 Sep 2025, and for renewals from 1 Sep 2026:
$3,300* a month (in general)
$3,800* a month (for financial services)
Applicants with more work experience will also correspondingly require a higher salary to qualify.
*To be finalised by Ministry of Manpower (MOM)
Tip: Need a one-stop solution for S Pass queries? Explore our S pass guide for employers in Singapore. From step-by-step application procedures to essential eligibility criteria and the required documents.
What is the minimum wage requirement to apply for a Work Permit?
There is no minimum wage requirement for applying for a Work Permit in Singapore. However, employers are encouraged to pay their employees—whether local or foreign—based on their skills, capabilities, and competencies. Adopting a competitive pay structure not only motivates staff but also enhances the retention of valuable employees.
Tip: Learn more about the Work Permit process and what you need to do in order to get your new foreign employees working in Singapore. Our Work Permit guide for employers covered everything you need to know about obtaining Work Permits for foreigners in Singapore.
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Employees whose work permits expire may be unable to legally work in Singapore until the permits are renewed. This can disrupt business operations and lead to productivity losses.
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