Foreign workers in Singapore play a vital role in complementing the local workforce, contributing to economic growth, and enhancing the diversity of skills available. As of June 2024, over 1.5 million foreign workers were employed in Singapore, accounting for approximately 40% of the workforce.
However, there are strict regulations governing the entry of foreign workers, including different types of work passes and quota limitations. Businesses looking to hire foreign workers can apply for several work passes, the most common being the Work Permit, S Pass, and Employment Pass (EP).
In Singapore, the Ministry of Manpower (MOM) specifies the foreign worker quota and levy requirements.
In this blog, we look with greater detail at the foreign worker quota in Singapore, and how InCorp can help with managing your company’s foreign employees.
What is the MOM Foreign Worker Quota?
The foreign worker quota is the limit imposed on the number of foreign employees a company can employ. It is based on the company’s industry and size. The Singapore government introduced this quota to manage the influx of foreign workers into the country, balancing local and foreign talent, and ensure its citizens have sufficient access to employment opportunities.
How is the Foreign Worker Quota Determined?
The limit depends on the company sector as well – for example, a construction business enjoys a higher quota of foreign workers as compared to a business in the service industry. The quota is reviewed periodically to make sure that it is in line with Singapore’s economic needs.
The quota is expressed in terms of a Dependency Ratio Ceiling (DRC), which is the maximum number of foreign workers to the total workforce that a company in a particular sector can hire. The table below shows the foreign worker quotas for various sectors:
| Industry | Dependency Ratio Ceiling (DRC) |
|---|---|
| Construction | 83.3% |
| Manufacturing | 60% |
| Marine Shipyard | 77.8% |
| Process | 83.3% |
| Services | 35% |
For example, for a company in the marine shipyard sector, the total number of work permit and S-Pass holders employed by the company cannot exceed 77.8% of its total workforce.
Additionally, the number of PRC work permit holders a company can hire is limited by a PRC sub-quota capped at:
- 8% of the company’s total workforce for companies in the service sector
- 25% of the company’s total workforce for companies in the manufacturing sector
Under the existing quota, the number of S-Pass holders a company can engage is capped at:
- 10% of the company’s total workforce for companies in the service sector
- 25% of the company’s total workforce for companies in the manufacturing sector
Who Does the Foreign Worker Quota Apply to?
There are no quota restrictions or foreign worker levies for Employment Pass (EP) holders in Singapore. However, businesses hiring S-Pass and work permit holders – the latter only for companies in the construction, manufacturing, marine shipyard, process, or services sectors – are subject to these quota restrictions.
Here are the approved sources of workers for eligible business sectors:
| Eligible Business Sectors | Approved Sources |
|---|---|
| Construction |
*Note that for the Manufacturing and Services sectors, companies can employ migrant workers from Non-Traditional Sources (NTS) for a restricted set of occupations in the NTS Occupation List |
| Marine Shipyard | |
| Process | |
| Manufacturing | |
| Services |
Foreign Worker Levy (FWL)
Aside from the foreign worker quota, companies also need to pay a levy to hire foreign workers. This is an added cost to companies when they engage foreign employees and was introduced to encourage firms to employ local workers while reducing reliance on foreign workers.
While the foreign worker quota and levy apply to all industries in Singapore, some industries face greater regulation. Despite these policies to curb the inflow of foreign workers, Singapore continues to be a prime destination for foreign workers. This is because of its economic opportunities, quality of life, and favorable working conditions.
The FWL paid depends on the worker’s qualifications and the number of work permit or S-Pass holders hired.
How is the Foreign Worker Quota Calculated?
MOM uses information from a company’s central provident fund (CPF) account to calculate the number of local employees hired by the company and uses that to determine the foreign worker quota. The foreign worker quota is calculated based on the average number of local employees in a company over the last 3 months.
Hence, companies must declare paid wages and CPF contributions of local employees swiftly and precisely to ensure the accurate computation of the quota.
The Local Qualifying Salary (LQS) is used to decide the number of local employees who can be used to calculate the work permit and S-Pass quota entitlement.
The table below explains what a Singaporean or Permanent Resident (PR) employee who is hired under a contract of service, including a company director, is considered:
| Salary | Local Employee Count |
|---|---|
| LQS of at least S$1,600 every month | 1 |
| LQS of between S$800 to <S$1,600 | 0.5 |
Every Saturday, the number of local employees is updated and employers can check the balance quota the next working day.
You can also use the online foreign worker quota calculator on MOM’s website to determine how many Work Permit and S Pass holders your company can hire.
Understand More About Hiring Foreign Employees With InCorp
InCorp’s capable immigration team can help with all matters related to the employment of your foreign workers in Singapore. We understand that navigating the regulations and requirements can be overwhelming, especially for first-time employers. That is why we offer comprehensive services to guide you through the process. Contact our team now to find out more!
FAQs about Foreign Worker Quota in Singapore
- The limit, or quota, depends on the industry that the company is in. Contact us to find out more!
- It regulates the number of foreign workers that businesses in certain sectors can employ. It is designed to ensure a balanced workforce by limiting the proportion of foreign workers relative to local workers, promoting local employment while allowing companies to access foreign talent where necessary.
- You can find the calculator on MOM’s website. Otherwise, our experts are happy to help!
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