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Singapore minimum wage guide for employers

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)

Hourly gross rate = S$ 800 / ( 20 * 4 ) = S$ 800 / 80 = $10 

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.

Set Work Pass expiry reminders with Payboy HR Software!

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.

With our Payboy HR and Payroll software, you can actually set work pass expiry reminders so as not to miss the pass renewal dates, giving you peace of mind! If you have any questions or would like more information, please don't hesitate to sign up for a demo, and we'll be happy to assist.

Simplify payroll calculations with Payboy HR software!

Payroll calculations can be complex, especially if there are new HR regulations and you are managing a large team of employees with different working arrangements. But fret not; Payboy HR software is here to help! 

With our fully compliant, customisable, and integrated payroll processing module, you can automate the CPF calculations and also enjoy additional features that are designed to save you time and effort.

  1. 100% compliance and 100% peace of mind
    • Forget about payroll and SDL calculations, CPF contributions, and IR8A submissions. Our software will automatically calculate them for you and keep you compliant with the latest regulations from MOM, CPF, and IRAS.
  2. Covers any work arrangement
  3. Transparent, Accurate, and Simple
    • Have full visibility on how payroll is calculated automatically based on shifts, attendance, leave, and submitted claims within an intuitive experience.
  4. Customisable itemised payslips
  5. Fully integrated with your preferred platforms
    • We’ll fit into your ecosystem seamlessly and keep your finance team happy. Learn more about our seamless integrations with Xero, Financio, and Quickbooks.

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 Management

Project Costing | Training Management 

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.
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