Hiring a foreign employee in Singapore starts with one decision that shapes everything after it: which work pass fits the role. Employment Pass, S Pass and Work Permit: key differences for employers is a topic that catches many business owners out, because the three passes look similar on the surface but carry different salary floors, quotas, levies and documentation burdens.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This guide sets out the key differences for employers, explains how to approach the choice, and highlights the mistakes we see most often. It is general information only and not advice on your specific hiring plan.
Who this applies to
This article is relevant to any Singapore-registered company, sole proprietorship or partnership that wants to employ a non-resident worker. It is especially useful for:
- Start-ups and SMEs hiring their first foreign employee
- Companies setting up a local entity and sending over a senior manager or specialist
- Employers in construction, marine, manufacturing, process and services sectors that rely on lower-skilled foreign labour
- HR and finance teams who budget for hiring costs and need to anticipate levies and CPF obligations
Singapore citizens and permanent residents do not need a work pass, and neither do certain other categories of worker, so confirm the employee’s status first.
Key rules and requirements in Singapore
The Ministry of Manpower (MOM) administers all three passes under the Employment of Foreign Manpower Act. The passes differ mainly by skill level and salary.
Employment Pass (EP)
The Employment Pass is for foreign professionals, managers and executives. It has a minimum qualifying salary that increases with age and is higher for the financial services sector. Candidates must also pass the points-based Complementarity Assessment Framework (COMPASS), which scores factors such as salary, qualifications, diversity of nationalities in the firm and support for local employment. There is no quota and no monthly levy for EP holders, but the employer must satisfy the Fair Consideration Framework by advertising the role first, unless an exemption applies.
S Pass
The S Pass is aimed at mid-skilled technical staff. It has a lower minimum qualifying salary than the EP, though this also rises with age and varies by sector. Employers face a quota based on the proportion of S Pass holders in their workforce, which differs between services and other sectors, and they pay a monthly levy for each S Pass holder. COMPASS does not apply, but the role must be advertised under the Fair Consideration Framework.
Work Permit (WP)
The Work Permit covers lower-skilled and semi-skilled workers in approved sectors such as construction, manufacturing, marine shipyard, process and services. There is no salary threshold, but the employer must comply with sector-specific rules, including a Dependency Ratio Ceiling, nationality restrictions, a monthly levy and, in many cases, security bonds and mandatory medical insurance. Workers must also meet age, education and medical requirements.
Comparison at a glance
- Target worker: EP for professionals and managers, S Pass for mid-level technical staff, WP for lower-skilled workers.
- Salary threshold: EP highest, S Pass lower, WP none but sector rules apply.
- Quota or ceiling: none for EP, a quota for S Pass, a Dependency Ratio Ceiling for WP.
- Levy: none for EP, monthly levy for S Pass and WP.
- Advertising requirement: applies to EP and S Pass; not applicable to WP in the same way.
- Dependants: EP holders meeting the salary threshold may be able to sponsor family members, S Pass holders have stricter conditions, and WP holders cannot.
All figures, thresholds and levy rates are revised from time to time, so treat any numbers you have seen online as a starting point and confirm them on the MOM website before you commit to a hire.
Step-by-step process
- Define the role. Settle the job title, duties, qualifications and salary before looking at passes. The role, not the candidate’s preference, drives eligibility.
- Check the employer’s standing. Your company must be registered with ACRA, be in good compliance standing, and have a valid UEN. For S Pass and WP, check that your quota or ceiling has room.
- Advertise where required. For EP and S Pass, post the vacancy on the MyCareersFuture portal for the required period and keep a record of how you assessed local applicants.
- Self-assess if available. MOM offers online tools to test EP and S Pass eligibility before you file.
- Submit the application. Employers or their appointed agents apply through MOM’s online systems, such as EP Online, with the candidate’s documents.
- Issue the in-principle approval and complete formalities. After approval, arrange medical examinations where needed, issue the pass, and prepare employment contracts.
- Set up payroll and statutory obligations. Foreign pass holders are generally not subject to CPF contributions, though the Skills Development Levy and work injury compensation insurance still apply. Levy-paying employers must budget for the monthly levy.
Common mistakes to avoid
- Choosing the pass by what the candidate wants rather than what the role and salary actually qualify for
- Offering a salary that falls just below the qualifying threshold, then discovering the application cannot proceed
- Ignoring the quota or Dependency Ratio Ceiling until the application is rejected
- Failing to document the Fair Consideration Framework advertising and the reasons for not selecting local candidates
- Forgetting that thresholds change, and relying on an old figure from a previous hire
- Not budgeting for levies, insurance and renewal costs when quoting the true cost of hire
- Letting a pass lapse or failing to cancel it when employment ends
Practical examples
A software start-up wants to hire a senior engineer with a degree from a recognised university and a salary above the EP threshold for the candidate’s age. The EP is the natural route, provided the candidate scores enough points under COMPASS. No levy is payable.
A restaurant group needs a chef de partie with a technical diploma and a salary well below the EP level. An S Pass could work if the company has quota headroom, the salary meets the S Pass minimum and the job has been advertised. The employer will pay a monthly levy.
A small construction contractor needs site labourers. The Work Permit is the relevant pass, but the company must check its sector’s Dependency Ratio Ceiling, approved source countries and security bond requirements before recruiting.
How a corporate secretary can help
Work pass applications sit alongside your wider corporate and compliance obligations. Raffles Corporate Services can help you confirm that your ACRA records are current, that your local director and officer details are in order, and that annual filings through the ACRA BizFile+ portal are up to date, all of which support a clean employer profile. We also assist with payroll support, CPF and Skills Development Levy computations, accounting treatment of levies, and tax considerations through the IRAS myTax Portal. For work pass-specific questions, our team can point you in the right direction and coordinate with you on the documents you will need.
Frequently Asked Questions
Can an employer switch an S Pass holder to an Employment Pass?
It is possible if the employee and the role meet the EP criteria, including the salary threshold and COMPASS points. It requires a fresh application and is not automatic.
Do I need to advertise before every EP or S Pass application?
Generally yes, under the Fair Consideration Framework, although exemptions exist, for example for very small firms or for roles above a certain salary level for EP. Check the current exemptions with MOM.
Do foreign employees pay CPF?
Employers do not generally make CPF contributions for foreign pass holders. Skills Development Levy, work injury compensation insurance and other obligations may still apply.
Who pays the levy for a Work Permit or S Pass holder?
The employer is liable for the monthly levy. Rules restrict how much of it can be recovered from the worker, so confirm the position before drafting the employment contract.
How long are the passes valid?
Validity periods and renewal terms vary by pass type, sector and the individual case, so check the approval letter and MOM guidance for the specific pass.
Key takeaways
- The Employment Pass suits professionals and managers, the S Pass suits mid-skilled technical staff, and the Work Permit suits lower-skilled workers in approved sectors.
- Salary thresholds, COMPASS scoring, quotas, levies and advertising rules differ across the three passes.
- Choose the pass based on the role and the salary offered, and budget for the full cost of hire.
- Keep records of Fair Consideration Framework advertising and your assessment of local candidates.
- Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.