Foreign Worker Salaries in Singapore: A Comprehensive Guide

Singapore's economy relies heavily on a foreign workforce, contributing significantly to various sectors. Understanding the salary landscape for these workers is crucial for both employers and prospective employees. This article delves into the intricacies of foreign worker salaries in Singapore, addressing common questions and providing a comprehensive overview.

What is Considered a Foreign Worker in Singapore?

Under Singaporean HR policies, a foreign worker is anyone not a citizen or permanent resident employed in the country. They are categorized and managed under legislation like the Employment of Foreign Manpower Act (EFMA) and the Employment Act. These workers fall into two main groups:

Professionals and Semi-skilled Workers

• Hold either an Employment Pass (EP) or an S Pass.
• EPs are for professionals, managers, and executives, requiring a minimum salary and qualifications (e.g., university degree).
• S Passes are for mid-level skilled workers.

Low-skilled and Unskilled Workers

• Hold Work Permits.
• These workers are typically employed in sectors like construction, manufacturing, and domestic work.
• Employers must apply for non-transferable Work Permits.

All foreign workers require valid work permits, and employers are responsible for permit applications, accommodation, medical insurance, and adherence to work conditions and safety standards. Employers also maintain registers of their foreign workers and report any missing workers to the Ministry of Manpower (MOM).

Importantly, foreign workers are protected by laws covering working hours, pay, rest days, and fair treatment. Severe penalties exist for employers violating these protections.

Minimum Salary Requirements for Foreign Workers

Minimum salary requirements vary significantly depending on the work pass type and sector.

Employment Pass (EP)

• General Sectors: The minimum qualifying salary is increasing from SGD 5,000 to SGD 5,600 per month (effective January 1, 2025 for new applications, January 1, 2026 for renewals), increasing progressively with age, up to SGD 10,700 for those in their mid-40s.
• Financial Services Sector: The minimum qualifying salary is increasing from SGD 5,500 to SGD 6,200 per month, also increasing progressively with age, up to SGD 11,800 for those in their mid-40s.

S Pass

• Minimum salary is SGD 3,150 (most sectors) or SGD 3,650 (Financial Services), increasing with age. Note: A temporary minimum of SGD 3,000 applies until September 2024.

Work Permit

• No uniform minimum salary; sector-specific minimums exist (e.g., SGD 1,500 for manufacturing, SGD 1,800 for construction).

Employers must also meet other requirements like the Dependency Ratio Ceiling (DRC) and pay a monthly levy for each foreign worker.

How Foreign Worker Salaries Compare to Local Workers

Salary comparisons depend on various factors, including work pass type, industry, and government regulations.

Local Qualifying Salary (LQS)

Companies must pay local workers at least the LQS (increased to SGD 1,600 per month from July 1, 2024) to qualify for foreign worker quotas.

Employment Pass (EP) Holders

EP holders earn significantly more than the LQS. The minimum salary is substantially higher.

S Pass and Work Permit Holders

Mid-skilled S Pass holders earn less than EP holders, and Work Permit holders (often in low-skilled jobs) earn the least and lack CPF benefits (mandatory for local workers).

Industry and Skill Level

Salaries vary widely across industries and skill levels. High-skilled foreign professionals can earn comparably to or more than local counterparts.

Government Policies and Benefits

Local workers benefit from government schemes like the CPF, which foreign workers, especially those on Work Permits, lack.

Additional Benefits for Foreign Workers

Besides basic salary, foreign workers are entitled to various benefits:

• Statutory Benefits: Paid annual leave (minimum 7 days), paid sick leave (14 days), public holiday pay, maternity/paternity leave, and work injury compensation.
• Medical Insurance: Employers must provide medical insurance (minimum SGD 60,000 annual coverage).
• Other Benefits (Non-Mandatory): Flexible work arrangements, employee assistance programs (EAPs), dental benefits, life/accident insurance, and travel allowances.

Note: CPF contributions are not applicable to foreign workers.

Regulation of Foreign Worker Salaries

The Ministry of Manpower (MOM) regulates foreign worker salaries through:

• Employment Pass (EP) Qualifying Salary: The minimum salary is regularly adjusted.
• Sector-Specific Salaries: Different sectors have different minimum salary requirements.
• Local Qualifying Salary (LQS): Ensures fair compensation for local workers and influences foreign worker quotas.
• Progressive Wage Model and Foreign Worker Quotas: Connects local worker wages to foreign worker quotas.
• Compliance and Enforcement: Non-compliance results in penalties.
• Restrictions on Employers of Record (EORs): Overseas companies often need a local entity to hire.

Deductions from Foreign Workers' Salaries

Several deductions can be made from foreign workers' salaries, but only under specific circumstances and with legal compliance:

• CPF Contributions: Not applicable to foreign workers.
• Foreign Worker Levy (FWL): Paid by the employer, not deducted from the worker's salary.
• Skills Development Levy (SDL): Paid by the employer, not deducted from the worker's salary.
• Allowable Deductions: Court orders, tax recovery, compensation for loss, payments to cooperative societies (with consent).
• Maximum Deduction Limit: 50% of the salary (except in termination cases).

Salary Increments for Foreign Workers

Salary increments for foreign workers are not fixed. Instead, they are influenced by:

• Minimum Qualifying Salary Adjustments: Periodic adjustments in minimum salaries.
• General Wage Trends: Industry performance and market conditions play a role.

Salary Requirements for Different Work Pass Types

Skilled vs. Unskilled Foreign Workers: Salary Differences

While there's no explicit distinction between "skilled" and "unskilled" in salary scales, the minimum qualifying salary for EPs (generally for skilled workers) is significantly higher than for Work Permits (often for unskilled workers). The COMPASS framework further considers salary relative to local PMET salaries.

This article provides a general overview. For specific details and the most up-to-date information, always consult the official Ministry of Manpower (MOM) website in Singapore.