(Last updated on 18 February 2011 02:59 PM)The Foreign Worker Levy is a pricing mechanism to control the number of foreign workers (including Foreign Domestic Workers) in Singapore.
While they are not required to pay CPF contributions for foreign workers, employers are liable to pay monthly levies to hire employees who hold Work Permits or S Passes.
If a foreign worker on the Foreign Worker Levy Scheme is subsequently granted Singapore Permanent Resident status, he will be placed on the CPF scheme. This will take effect from the day he is granted Permanent Resident status.
Read here to estimate the quota for foreign workers that apply to your industry and your company.
Foreign worker levies applicable to Work Permit holders
Employers who hire skilled Work Permit holders can enjoy lower levy rates, subject to the Dependency Ratio of their industry. In order for lower levy rates to apply, i.e. in order for a Work Permit holder to be considered skilled, the Work Permit holder must possessrelevant academic or skills-based test qualifications and certificates.
| Levy rate ($) | ||||
|---|---|---|---|---|
| Sector | Dependency Ratio | Worker Category | Monthly | Daily |
| Manufacturing | Basic Tier / Tier 1: Up to 35% of the total workforce | Skilled | 170 | 5.59 |
| Unskilled | 270 | 8.88 | ||
| Tier 2: Above 35% to 55% of the total workforce | Skilled | 210 | 6.91 | |
| Unskilled | 310 | 10.20 | ||
| Tier 3: Above 55% to 65% of the total workforce | Skilled (1) | 450 | 14.80 | |
| Unskilled (1) | ||||
| Construction | 1 local full-time worker to 7 foreign workers | Skilled and on MYE (2) | 160 | 5.27 |
| Experienced & exempted from MYE (3) | 310 | 10.20 | ||
| Unskilled | 470 | 15.46 | ||
| Marine | 1 local full-time worker to 5 foreign workers | Skilled | 170 | 5.59 |
| Unskilled | 300 | 9.87 | ||
| Process | 1 local full-time worker to 7 foreign workers | Skilled and on MYE (2) | 160 | 5.27 |
| Experienced & exempted from MYE (3) | 310 | 10.20 | ||
| Unskilled | 300 | 9.87 | ||
| Services | Basic Tier / Tier 1: Up to 25% of the total workforce | Skilled | 170 | 5.59 |
| Unskilled | 270 | 8.88 | ||
| Tier 2: Above 25% to 40% of the total workforce | Skilled | 300 | 9.87 | |
| Unskilled (1) | ||||
| Tier 3: Above 40% to 50% of the total workforce | Skilled | 450 | 14.80 | |
| Unskilled | ||||
(1) Skilled workers belonging to the categories of above 55% to 65% of the total workforce in the Manufacturing Sector and above 25% to 50% of the total workforce in the Service Sector are not eligible for the skilled levy rates.
(2) The MYE allocation quota for Construction and Process sectors will be reduced by 5%.(3) The monthly levy rate of $310 only applies to Non-Traditional Sources (NTS) or People's Republic of China (PRC) workers in the construction and process industries, who have been exempted from the requirement of Man-Year Entitlements (MYEs). To be exempted from MYE, the foreign worker must have at least two years' working experience in his respective industry and his employer has applied for a Work Permit without any Prior Approval support.
- Non-Traditional Sources – India, Sri Lanka, Thailand, Bangladesh, Myanmar, Philippines, Pakistan.
Foreign worker levies applicable to Foreign Domestic Workers
Details about levies applicable to Foreign Domestic Workers can be found here.
Foreign worker levies applicable to S Pass holders
| Worker Category | Levy rates ($) | |||
|---|---|---|---|---|
| Sector | Dependency Ratio | Monthly | Daily | |
| All sectors | Basic Tier / Tier 1: Up to 20% of the total workforce (1) | Skilled | 110 | 3.62 |
| Tier 2: Above 20% to 25% of the total workforce (1) | Skilled | 150 | 4.94 | |
Tier levy conversion for S Pass
A company can apply to convert its S Pass holder(s) from 2nd tier to 1st tier, subject to the availability of quota. This conversion reduces the total levy amount for the company.
Pending approval of the tier conversion application, the existing levy rate will apply. Upon approval, the new levy rate will commence on the first day of the following month.
For example, if the application for levy conversion is approved in September, the new levy rate will apply from 1 October.
Apply for conversion
Companies can apply for the levy conversion submitting the 
Application Form for S Pass Tier Levy Conversion.
Application Form for S Pass Tier Levy Conversion.For more information on Levy Tier Conversion, please refer to the Frequently Asked Questions.
Skills Development Levy
Under the Skills Development Levy Act, every employer is required to pay a monthly Skills Development Levy (SDL) for his foreign employees, i.e. Work Permit and S Pass holders.
Source:
http://www.mom.gov.sg/foreign-manpower/foreign-worker-levies/Pages/levies-quotas-for-hiring-foreign-workers.aspx
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