Foreign Worker Levy (FWL) Singapore 2026: Rates, Calculation & Employer Obligations

For Singapore employers, the Foreign Worker Levy (FWL) is one of the most material recurring HR costs. It applies to every Work Permit and S Pass holder on payroll, scales with the number of foreign workers as a share of the workforce, and changes every year as MOM tightens the rules to push companies toward local hiring. Getting it wrong is expensive — both in cash terms and in MOM enforcement risk.

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.

Last reviewed on 29 October 2026 against MOM guidance, including the Work Permit levy rates for every sector.

This guide explains how the FWL works in 2026, what the current rates are by sector and tier, how to calculate your monthly bill, and the compliance traps directors and HR managers most often fall into.

What the Foreign Worker Levy Is

The Foreign Worker Levy is a monthly pricing mechanism the Ministry of Manpower (MOM) uses to regulate the number of foreign workers in Singapore. It is not a tax on the worker — it is a charge on the employer, payable in addition to the worker’s salary, CPF (if any), and other employment costs.

The levy is charged on:

• Work Permit holders in Construction, Manufacturing, Marine Shipyard, Process, and Services sectors
• S Pass holders (mid-skilled workers) across all sectors
• Foreign domestic workers (a separate FDW levy regime applies)

Employment Pass (EP) holders, Personalised Employment Pass holders, Tech.Pass holders, and ONE Pass holders are not subject to FWL. See our companion guide on EP vs ONE Pass vs PEP for the higher-skilled passes.

How the Levy Tiers Work

In the Services and Manufacturing sectors, the levy is tiered: the more Work Permit holders a company employs as a share of its total workforce, the higher the levy for the workers in the upper tiers. In Construction, Process and Marine Shipyard, the levy depends instead on the worker’s skill level and, in Construction and Process, on the source country. Every sector also has a quota, the dependency ratio ceiling (DRC), which caps how many foreign workers a company can employ.

The current quotas are:

Locals count towards the quota if they earn at least the Local Qualifying Salary (S$1,800 a month from 1 July 2026); those earning S$900 to below S$1,800 count as half. In Services, Tier 1 covers Work Permit holders up to 10% of the total workforce, Tier 2 above 10% to 25%, and Tier 3 above 25% to 35%. In Manufacturing the bands are up to 25%, above 25% to 50%, and above 50% to 60%. In every sector, higher-skilled workers attract a lower levy than basic-skilled workers.

Current Work Permit and S Pass Levy Rates (2026)

Monthly levy rates per worker, as published by MOM in October 2026:

Services and Manufacturing (tiered)

Construction, Process and Marine Shipyard (by skill level and source)

In Construction, workers whose Work Permits are approved or issued without the required certification are charged S$900, and at least 10% of a firm’s construction Work Permit holders must be higher-skilled before it can hire or renew basic-skilled workers. NTS covers countries such as India, Sri Lanka, Thailand, Bangladesh, Myanmar and the Philippines; NAS covers Hong Kong, Macau, South Korea and Taiwan.

S Pass

Since 1 September 2025, the S Pass levy is a flat S$650 a month across all sectors and tiers.

For workers who do not work a full calendar month, MOM charges a daily rate instead.

Rates checked against MOM’s sector pages on 29 October 2026. Always confirm current rates on the MOM website before budgeting or making a hire.

Levy Calculation: A Worked Example

Facts: A Singapore F&B company employs 20 staff in total — 13 locals (Singapore Citizens and PRs earning at least the Local Qualifying Salary) and 7 foreign Work Permit holders in the Services sector. All 7 are basic-skilled.

Step 1 — Check DRC: Services DRC is 35%. Maximum foreign workers allowed = 35% × 20 = 7. The company is exactly at the ceiling.

Step 2 — Identify tiers: Tier 1 covers up to 10% of total workforce (≤2 workers). Tier 2 covers the next 15% (3rd–5th worker). Tier 3 covers above 25% (6th and 7th workers).

Step 3 — Apply rates:

• 2 × Tier 1 × S$450 = S$900
• 3 × Tier 2 × S$600 = S$1,800
• 2 × Tier 3 × S$800 = S$1,600

Total monthly levy = S$4,300 (S$51,600 per year), in addition to wages, MOM Skills Development Levy, and insurance. Compliance with the F&B sector regulatory framework adds further operational cost.

Levy Payment Mechanics

1. Billing Cycle

MOM charges the levy monthly. The levy bill is available from the 3rd working day of each month, and the levy for each month is due by the 17th of the following month (or the next working day). GIRO is recommended but not required; PayNow QR is also accepted.

2. Pro-Rated Levy

Levy is pro-rated for partial months — a worker hired on the 15th of a month attracts roughly half a month’s levy. Levy is charged until the day before the Work Permit is cancelled, not until the day the worker leaves Singapore, so cancel promptly.

3. Late Payment

Late payment attracts a penalty. MOM calculates it at 2% a month on the unpaid levy, pro-rated by day, with a minimum of S$20 or 30% of the unpaid levy, whichever is less. If levy payments are missed for two consecutive months, the company’s existing Work Permits and S Passes are revoked the following month, it cannot apply for new Work Permits, and MOM may take legal action. Many breaches are simply failed GIRO deductions, so keep enough funds in the account.

4. Levy Waivers

MOM waives the levy only in specific situations, such as overseas leave of at least 7 consecutive days or hospitalisation leave issued by a Singapore-registered doctor (each capped at 60 calendar days a year), police or embassy custody, and death. Apply through MOM’s “Check and pay foreign worker levy” eService within 1 year of the levy bill.

Interaction with Other Employer Costs

FWL is one of four employer cost lines on every foreign worker:

1. Basic salary — meeting the qualifying salary threshold for S Pass holders (from S$3,300 a month, or S$3,800 in financial services, rising with age)
2. Foreign Worker Levy — this guide
3. Skills Development Levy (SDL) — 0.25% of wages, capped at S$11.25/month per employee, payable on all employees including foreign workers
4. Compulsory medical insurance — at least S$60,000 of annual inpatient and day-surgery cover per Work Permit holder, with insurers paying 75% and employers 25% of claim amounts above S$15,000

Work Permit and S Pass holders do not attract CPF contributions — only Singapore Citizens and PRs do. See our Singapore payroll and CPF guide for the full picture.

Common Compliance Mistakes

1. Misclassifying skill levels. Higher-skilled status depends on sector-specific criteria, such as recognised qualifications or skills certification, and attracts a lower levy. Claiming it without meeting the criteria exposes the company to back-levies, and missing it means paying more than necessary.
2. DRC breaches after a local resignation. If a local resigns and the foreign-worker share rises above the DRC, MOM will not let new permits be issued — and existing ones may not be renewed. Plan local recruitment in advance.
3. Counting locals wrongly. For quota purposes, a local earning at least the Local Qualifying Salary (S$1,800 a month from 1 July 2026) counts as one local, and one earning S$900 to below S$1,800 counts as half. Locals earning less do not count.
4. Forgetting the SDL. SDL is payable on all employees, including foreign workers, in addition to FWL. Many SMEs forget this and accumulate arrears.
5. Missing levy waivers. If a worker is hospitalised or on extended home leave, the waiver application must be filed within 1 year of the levy bill. Beyond that, the levy is sunk.

Levy Trends to Watch

MOM has been raising levies and tightening quotas to reduce reliance on foreign workers. The S Pass qualifying salary rises again for new applications from 1 January 2027. MOM has also announced changes from 2028: Tier 1 and Tier 2 will merge in Services (S$400 higher-skilled, S$600 basic-skilled) and Manufacturing (S$300 higher-skilled, S$470 basic-skilled); the Marine Shipyard basic-skilled levy will rise from S$500 to S$600; and Process basic-skilled levies will rise from S$450 to S$600 (Malaysia, NAS and PRC) and from S$650 to S$800 (NTS). MOM will announce the implementation timeline later.

Directors planning multi-year manpower budgets should assume further increases in effective levy cost and consider whether automation or process redesign can reduce reliance — or whether your grant-stacking strategy can offset some of the burden through productivity grants like PSG and EDG.

Frequently Asked Questions

Is the Foreign Worker Levy tax-deductible?

Yes — FWL paid to MOM is a legitimate business expense and is fully deductible against the employer’s income for corporate tax purposes, provided the worker is engaged in the production of taxable income.

Can the company recover FWL from the worker’s salary?

No. Under the Employment of Foreign Manpower Act, FWL is solely the employer’s liability and cannot be deducted from the worker’s wages. Any clause in an employment contract purporting to transfer the cost to the worker is unenforceable and is an MOM offence.

What happens if the company is wound up or struck off?

Outstanding levy is still owed to MOM, and a company applying to be struck off must not have outstanding debts to government agencies. Directors should ensure final FWL is paid before applying for company strike-off.

How is FWL different from the Skills Development Levy (SDL)?

SDL is 0.25% of wages, capped at S$11.25/month per employee, payable on all employees (local and foreign). FWL is a per-worker monthly charge applied only to Work Permit and S Pass holders. Both are payable in addition to each other.

Final Word

FWL is a permanent and rising line item for any company employing Work Permit or S Pass holders. The mechanics are not complex — but the tier structure, DRC interaction, and waiver windows trip up many HR teams. Build a simple internal levy tracker that records each worker’s start date, tier, sector, and any waiver eligibility. Reconcile MOM’s monthly bill against your tracker before paying.

If you would like help benchmarking your levy exposure or restructuring your workforce mix, talk to our work pass team. Singapore’s manpower regime rewards companies that plan ahead and penalises those that don’t.

— The Editorial Team, Raffles Corporate Services