If your company employs Work Permit holders in Singapore, you are required to pay a Foreign Worker Levy (FWL) to the government every month. The levy is not a tax on your workers — it is a cost borne entirely by the employer, designed to encourage businesses to moderate their reliance on lower-skilled foreign labour and to prioritise hiring Singaporeans and permanent residents.

Understanding the levy structure, the Dependency Ratio Ceiling (DRC), and how to manage your foreign workforce compliantly is essential for any business employing Work Permit holders in 2026.

What Is the Foreign Worker Levy?

The Foreign Worker Levy (FWL) is a monthly fee that employers must pay for each Work Permit holder they employ. It is administered by the Ministry of Manpower (MOM) and is separate from the worker’s salary, CPF contributions (which do not apply to Work Permit holders), and other employment costs.

The levy rates vary by:

  • Industry sector (manufacturing, construction, marine shipyard, process, or services)
  • Skill level (basic tier or skilled tier, determined by qualifications and job role)
  • The company’s Dependency Ratio Ceiling (DRC) tier (whether the company is within the basic quota or in the higher-tier quota)

2026 Foreign Worker Levy Rates

The following rates apply for Work Permit holders as at 2026. Note that MOM periodically adjusts levy rates as part of its manpower policy — always verify current rates at mom.gov.sg before making workforce planning decisions.

Services Sector

  • Basic Tier (within DRC basic quota): S$450 per month
  • Higher Tier (within higher-tier DRC quota): S$650 per month

Manufacturing Sector

  • Basic Tier: S$400 per month (unskilled/semi-skilled workers)
  • Skilled Tier: S$350 per month (workers with recognised qualifications)
  • Higher Tier: S$600 per month

Construction Sector

  • Basic Tier (unskilled): S$700 per month
  • Higher Tier: S$950 per month
  • Skilled workers (e.g., holders of the Higher Skilled/Resident Foreign Worker status): Reduced rates may apply

Marine Shipyard and Process Sectors

  • Rates vary by skill tier and whether workers are engaged on project-based Man-Year Entitlement (MYE) or general company quota.

Note: The above figures reflect the general levy structure. Always confirm exact current rates with MOM or a licensed employment agent, as rates are subject to revision.

The Dependency Ratio Ceiling (DRC)

The DRC limits the proportion of Work Permit holders a company can employ relative to its total workforce. The ceiling differs by sector:

  • Services sector: Maximum of 35% foreign workers (Work Permit holders) as a proportion of total workforce. Within this, the sub-DRC for Work Permit holders (as distinct from S Pass holders) is 20%.
  • Manufacturing sector: Up to 60% of the total workforce may be on Work Permits (with the S Pass sub-DRC at 15%).
  • Construction, Marine Shipyard, and Process sectors: Higher DRCs apply and are structured differently, often using project-based MYE quotas.

Employers who wish to hire more foreign workers than the DRC allows must first increase their local workforce. Every new Singaporean or PR employee you hire increases your quota for foreign workers.

How the Levy Is Calculated and Paid

MOM calculates FWL based on the number of Work Permit holders in your employ during each calendar month. The levy is deducted automatically via GIRO from your designated bank account on the 17th of each month (for the previous month’s levy).

If your GIRO payment fails, MOM will issue a demand and may impose late payment penalties. Persistent non-payment can result in your Work Permit quota being suspended and existing Work Permits being cancelled.

Levy Waiver for Hospitalised Workers

If a Work Permit holder is hospitalised for more than six consecutive days due to a work-related accident or illness, the employer may apply for a levy waiver for the period of hospitalisation. Applications must be submitted through the WP Online portal within 60 days of the hospitalisation period.

Man-Year Entitlement (MYE) for Construction and Marine

In the construction and marine shipyard sectors, project-based foreign workers are managed through the MYE system rather than the standard DRC. Main contractors must secure MYE credits (based on the project contract value) before employing foreign workers on a project.

MYE credits are allocated by BCA (for construction) or MPA (for marine) and are transferable between projects within the same contractor’s portfolio. Running out of MYE credits before project completion can result in costly delays — careful workforce planning is essential.

The Settled Worker Programme

Employers who retain the same Work Permit holders over multiple consecutive work permit renewals may qualify for levy concessions under various MOM productivity programmes. The Higher Skilled Worker (HSW) status — granted to workers who obtain the relevant trade certification (e.g., BCSS for construction workers) — attracts a lower levy rate, incentivising upskilling.

Key Employer Obligations Beyond the Levy

Paying the levy is just one of your obligations as an employer of Work Permit holders. Others include:

  • Medical insurance: You must purchase and maintain medical insurance of at least S$60,000 per worker per year for inpatient and day surgery costs.
  • Security bond: A S$5,000 security bond (or banker’s guarantee) per non-Malaysian Work Permit holder must be maintained throughout the worker’s employment.
  • Safe accommodation: Employers must provide or arrange approved housing that meets MOM’s housing standards.
  • Timely salary payment: Salaries must be paid within seven days of the end of each salary period, via bank transfer or MOM’s salary payment portal.
  • Cancellation and repatriation: When a Work Permit expires or is cancelled, you are responsible for repatriating the worker to their home country.

For guidance on Work Permit applications and renewals, visit our Work Permit Application service page. We also assist with S Pass applications for mid-skilled foreign employees.

Penalties for Non-Compliance

Employers who breach MOM’s foreign worker regulations face severe consequences. Hiring workers without valid Work Permits carries fines of up to S$30,000 per worker and/or imprisonment. Exceeding DRC quotas results in suspension of Work Permit privileges. Non-payment of salaries is a criminal offence under the Employment of Foreign Manpower Act (EFMA).

MOM maintains a public debarment list of employers who have been found to have mistreated workers or violated the EFMA. Debarred employers cannot hire new foreign workers until the debarment is lifted.

Need help managing your Work Permit applications and foreign worker levy obligations?
Contact Singapore Secretary Services today for expert employment pass and work permit support.
📞 +65 6536 0036
📧 [email protected]
🌐 www.singaporesecretaryservices.com