Guide to SG Foreign Worker Quota Calculator, Permit & Levy Rate

Saying that Singapore is competitive is an understatement. It ranks among the top financial centres despite its size, thanks to foreign labour and the local workforce collaborating smoothly.

Measures like the foreign worker levy (FWL) in Singapore, along with ample access to financing, help businesses provide opportunities for everyone, and tools like the foreign worker quota calculator simplify compliance.

This guide covers the quota calculator, sector-specific levy rates, and key hiring regulations.

What Is the Foreign Worker Quota for a Work Permit in Singapore?

This refers to the limit on how many foreign workers a company can hire. It’s expressed as a ratio between foreigners and the company’s total number of employees (Singaporeans + Permanent Residents + foreigners), dubbed dependency ratio ceiling (DRC). Here’s the DRC for each sector:

• Construction and Process – 83.3%
• Marine shipyard – 75%
• Manufacturing – 60%
• Services – 35%

For example, you own a catering (services) company with 100 locals. You can hire up to 53 foreign workers (35% of the overall workforce). However, the local staff must draw a minimum stipulated salary, known as the Local Qualifying Salary (LQS). More on this later.

The Foreign Worker Quota Calculator

This tool is often called the work permit quota calculator. It displays how many foreign workers you can hire based on the Ministry of Manpower’s rules — a godsend as there are sub-quotas within the DRC too. Unless of course, you’re running a sole proprietorship.

How to Calculate Your Foreign Worker Quota

Head to the foreign worker quota calculator page and:

1. Choose the sector your company operates in
2. Enter the number of local employees you have
3. Take note of the figures in the “Number of new workers you can hire” column

Key Calculation Metrics

The DRC is a crucial metric in the work permit quota calculator, providing you with the total number of foreign workers you’re allowed. Then, there are the aforementioned sub-quotas for each industry. Here’s an example for the services sector:

If this appears mindboggling, don’t worry. The foreign worker quota calculator shows you exactly how many individuals in each category that your business can hire.

However, that’s not all. Remember the LQS? This requirement ensures Singaporeans and Permanent Residents are paid fairly, and it prevents companies from abusing the foreign worker quota.

Each local employee earning at least S$1,800 a month is 1 “local” in your DRC.

Every local employee who earns S$900 – S$1,799 a month is ½ a “local” in your DRC.

How Can I Check My Foreign Worker Quota?

When you’re using the foreign worker quota calculator, key in how many employees you have in each category. The calculator will show your remaining quota for each work permit type.

What Is the Foreign Worker Levy (FWL)?

The Foreign Worker Levy (FWL) is a monthly fee per work permit holder in your firm. It regulates the foreign workforce size in Singapore. While S Pass holders attract a flat S$650 FWL, individuals in other categories follow the rates in the tables below.

Factors Influencing Foreign Worker Levy Rates

1. How qualified the employee is
2. Whether they’ve worked the full calendar month
3. How much of your DRC you’ve reached. This is specific to the manufacturing and services sector.

Using the catering company example again, assume all 53 foreign workers are in the “higher-skilled” bracket.

15 are in the 0-10% DRC quota. This tier’s FWL is S$4,500 (S$300 levy x 15 people).

23 are in the 11-25% DRC quota. This tier’s FWL is S$9,200 (S$400 levy x 23 people).

15 are in the 26-35% DRC quota. This tier’s FWL is S$9,000 (S$600 levy x 15 people).

Therefore, your monthly total foreign worker levy rate is S$22,700. This tiered system is only for manufacturing and services companies. Calculating the foreign worker levy rate for firms in other industries is much more straightforward.

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Who Pays the FWL in Singapore?

The employer. You cannot deduct the levy from your employee’s salary or make them pay it. If you’re struggling with the foreign worker levy rate, consider a business term loan as it’ll help you ease your cash flow.

Who Does the FWL in Singapore Go To?

The levy goes to the government of Singapore. Together with revenue from other sources, including the GST every business and individual pays, the FWL in Singapore is used to fund:

1. Social development
2. Diplomacy and defence
3. Government administration
4. The economy

Can Employers Pass the Levy Cost to Their Workers?

No. Should employers be found guilty of passing the FWL to their staff, they can be fined and/or jailed, and banned from hiring foreign workers.

Foreign Worker Levy Rate: Construction

It is possible to upgrade your staff to “higher-skilled” and lower your foreign worker levy rate.

Foreign Worker Levy Rate: Manufacturing

Akin to the construction industry, your staff can advance from “basic-skilled” to “higher-skilled” as well.

Foreign Worker Levy Rate: Marine Shipyards

Going from the “basic-skilled” to “higher-skilled” tier is much like the manufacturing industry, requiring certain met criteria.

Foreign Worker Levy Rate: Process Sector

Upgrading a process sector employee’s status is slightly stricter.

Foreign Worker Levy Rate: Services Sector

The requirements for upgrading a service sector worker to “higher-skilled” are much like the manufacturing and marine shipyards industries.

Penalties for Not Paying the FWL in Singapore

If you don’t pay the FWL in Singapore, you can be subject to the following penalties:

• A late payment charge based on the levy amount and number of overdue days
• If you miss two straight months of levy payments: Revocation of existing work permits and S Passes
• A ban from applying for work permits for this company, and other organisations you own
• Legal action in order to recoup the unpaid FWL

If you fear you can’t pay the foreign worker levy because of other pressing business expenses, a working capital loan might be the solution for you! Don’t lose access to precious talent just because of an administrative slip-up.

Conclusion

Foreign labour is vital to Singapore’s economy, but must be managed through quotas and levies to ensure local employment opportunities. Business owners should use the quota calculator to stay compliant and avoid severe penalties.

Need financing for cash flow or new business prospects? Reaching out to us for a free consultation is just as easy. Same goes if you’re applying for any corporate loan we offer too!