log inTry payboy for Free
Switch to Payboy now for only $3 
SAY GOODBYE TO EXPENSIVE HRMS
Switch to Payboy now for only $3 Say goodbye to expensive HRMS
Find out now
Unlock exclusive funding for Payboy with 50% on PSG and up to 80% on NCSS!

Foreign worker quota: A guide for employers in Singapore

Are you an employer in Singapore looking to hire foreign workers? Understanding the foreign worker quota is essential to ensuring compliance with the regulations and avoiding penalties. In this guide, we will walk you through the basics of the foreign worker quota, how it is calculated, and the quotas for S Pass and Work Permit holders in different sectors.


What is the foreign worker quota?

The foreign worker quota, also known as the dependency ratio ceiling, is the maximum ratio of foreign employees to the total workforce that a company in a specific sector can employ. It is designed to regulate the number of foreign workers in Singapore and ensure a balance with the local workforce.

How is the foreign worker quota determined? 

To determine the foreign worker quota, the Ministry of Manpower (MOM) uses information from your company's Central Provident Fund (CPF) account to first calculate the number of local employees that are hired in your company.

Your local employees are only counted towards your quota entitlement if they fulfil the following criteria:

  • A Singaporean or Permanent Resident employee earning the Local Qualifying Salary (LQS) of at least $1,400 per month is counted as 1 local employee.
  • A Singaporean or Permanent Resident employee earning half the LQS, which is at least $700 but below $1,400 per month, is counted as 0.5 local employee.

Besides employees whose salary is below $700 per month, these employees are also not counted when calculating your quota:

  • Business owners of sole proprietorships or partnerships.
  • Employees who receive salaries and CPF contributions from three or more employers.

It's important to note that the number of local employees is updated every Saturday, and you can check the quota balance on the next working day. Late or non-payment of CPF contributions and salary declarations can negatively impact your quota and may result in your workers being allocated to higher levy tiers. It’s therefore crucial to promptly and accurately declare the paid salaries and CPF contributions of your local employees to ensure accurate quota calculations!

Tip: Check out our “CPF guide for employers” to keep updated with the latest changes in CPF contributions and “Foreign worker levy (FWL): A guide for employers in Singapore” to learn more about the levy tiers for more S Pass and Work Permit holders.

How do I calculate the total workforce?

After determining your number of local employees, you will next calculate your total workforce, as your foreign worker quota is capped at a percentage of your total workforce. Here’s the formula to calculate your total workforce!

Your total workforce =

LQS count (based on the average of three months’ declared salaries and CPF contributions) + Work Permit holders + S Pass holders

It’s important to exclude Employment Pass (EP) holders from the total workforce calculation.

Example:

Mr. Lim currently has 10 local employees who are earning $2,500 per month, 6 local employees who are earning $1,200 per month, 5 Work Permit holders, 2 S Pass holders, and 2 EP holders.

His total workforce = 10 x 1 LQS count + 6 x 0.5* LQS count + 5 + 2 = 20

Notes:

  • A Singaporean or Permanent Resident employee earning half the LQS, which is at least $700 but below $1,400 per month, is counted as 0.5 local employee.
  • EP holders are excluded from the total workforce calculation.

What is the quota for foreign workers?

The maximum number of foreign workers includes both Work Permit and S Pass holders, and it varies based on the sector.

SectorMaximum number of foreign workers*
ConstructionLQS count x 7
ProcessLQS count x 7
Marine shipyardLQS count x 3.5
ManufacturingLQS count x 1.5
ServicesLQS count x 0.538462

*Round the figures down to the nearest whole number. E.g., if the figure you have

obtained is 4.5, your maximum number of foreign workers is 4.

Example:

Mr. Tan runs a manufacturing company. His workforce currently consists of 30 LQS and 10 Work Permit holders in his factory. He is thinking of hiring more people to expand his business, but he is unsure how many more foreign workers he can hire.

As Mr. Tan’s company is in manufacturing, the maximum number of foreign workers he can hire is LQS count x 1.5, which is 45 foreign workers.

Since he currently has 10 Work Permit holders, he can hire 45 - 10 = 35 more foreign workers.

Is there any quota for Work Permit holders?

Yes, the quota for Work Permit holders varies across different sectors, as seen below:

SectorQuota (from 1 Jan 2023 onwards)
Construction87.5%
Process87.5%
Marine shipyard77.8%
Manufacturing60%
Services35%

Do note that for the manufacturing and services sectors, the Work Permit quota for workers from the People’s Republic of China (PRC) is as follows:

  • Manufacturing: 25%
  • Services: 8%

Tip: Looking to obtain a Work Permit for your foreign worker? Check out our “Work Permit Guide for Employers”!

What is the quota for S Pass holders?

The quota for S Pass holders varies across different sectors and is counted within your total quota for foreign workers. Let's take a look at the S Pass holder quotas for different sectors:

SectorQuota (from 1 Jan 2023 onwards)
Construction15% 
Process15% 
Marine shipyard15% 
Manufacturing15%
Services10% 

Tip: Check out our “S-Pass Guide for Employers” if you are wondering how to go about obtaining an S Pass for your foreign workers!

Is there any quota for Employment Pass (EP) holders?

There is no quota restriction for Employment Pass (EP) holders in Singapore. However, there is a minimum salary requirement for EP holders:

  • $5,000 a month (in general)
  • $5,500 a month (for financial services)

Tip: Check out our “Employment Pass Guide for Employers” if you are navigating the process of securing an EP for your employee!

By understanding the various levy rates and following the guidelines, employers can ensure compliance with the foreign worker regulations in Singapore. It is important to note that these quotas are subject to change, and staying updated with the latest guidelines from the Ministry of Manpower (MOM) is crucial!

Never miss any Work Permit or S Pass renewal dates with Payboy HR software!

With our Payboy Payroll & HR software, you can easily set work pass expiry reminders so that you will never miss the pass renewal dates, giving you peace of mind! 

Streamline your HR processes with Payboy today!

As a PSG-approved HRMS, Payboy provides a robust system to help you manage your HR tasks so that you can focus on your business and people!

With our wide range of modules, you can customise a solution to meet the specific needs of your business:

Payroll Processing | Leave Management | Claims Management | Applicant Tracking

Time Attendance | Shift Scheduling | Appraisal System | Inventory ManagementProject Costing | Training Management | Benefits

Find out how you can do it all with Payboy

Reach out to us if you are keen for a free demo on how we can help you save hours and give you some peace of mind on payroll and other HR matters so that you can focus on your business and people.
Universal Landing Page Form
here are some other news you might like:
crossmenuarrow-right