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Starting from Sep. 1, 2022, the minimum qualifying salary for Employment Pass (EP) holders will be increased from S$4,500 to S$5,000.
The minimum qualifying salary for S Pass holders will be raised from S$2,500 to S$3,000.
The minimum qualifying salaries for EP holders and S Pass holders were last increased on Sep. 1, 2020.
In his Budget speech on Friday (Feb. 18), Minister for Finance Lawrence Wong said that the government continually reviews and adjusts the key policy parameters in Singapore's foreign worker policy framework.
"Let me emphasise that Singapore will continue to stay open and welcome talent from and around the world [...] but we need to continually adjust our rules to ensure complementarity between our foreign and local workforce."
Employment Pass minimum qualifying salary of S$5,000
With the new changes, EP holders will need to have a minimum salary of S$5,000 per month in order to qualify for an EP, up S$500 from the previous threshold of S$4,500.
For EP holders in the financial services sector, the previous minimum qualifying salary was S$5,000, and will be revised to S$5,500.
These qualifying salaries for EP candidates increase progressively with the applicants' age, to up to S$10,500 for non-financial sector EP applicants in their mid-40s and up to S$11,500 for EP candidates in the financial services sector in their mid-40s.
The new changes will apply to new EP applications from Sep. 1, 2022. There will be a one year buffer period before it applies to renewal applications, starting from Sep. 1, 2023.
Wong said that the goal is to ensure that incoming EP holders are comparable in quality to the top one-third of Singapore's local professional, managerial, executive, and technical (PMET) workforce.
S Pass minimum qualifying salary of S$3,000
S Pass holders will have the minimum qualifying salary raised in phases, starting on Sep. 1, 2022 for new S Pass applications.
With the first phase, new applicants for S Passes will need to have a minimum qualifying salary S$3,000, and S Pass applicants in the financial services sector will need a minimum salary of S$3,500 to qualify.
These changes will apply to renewal applications starting Sep. 1, 2023.
The minimum qualifying salary will then be raised again one year later on Sep. 1, 2023 and another two years later on Sep. 1, 2025. The S Pass minimum qualifying salaries will be subsequently raised to:
- At least S$3,150 (non-financial services sector) and S$3,650 (financial services sector) starting Sep. 1, 2023
- At least S$3,300 (non-financial services sector) and S$3,800 (financial services sector) starting Sep. 1, 2025
The finalised values for these later phases will be announced closer to the implementation dates, based on prevailing local wages then.
These increases are to ensure that S Pass holders are of comparable quality to the top one-third of local associate professionals and technicians, Wong said.
S Pass Tier 1 levy to be raised to S$650
The government will also be raising the Tier 1 levy for S passes, progressively from S$330 to S$650 by Sep. 1, 2025. This is in order to "better manage the flow of S Pass holders", Wong said.
The Dependency Ratio Ceiling (DRC) is the maximum proportion of S Pass and Work Permit holders that a company is allowed to employ.
Currently, companies with a DRC of less than 10 per cent fall under Tier 1 and have a levy rate of S$330. Tier 2 companies, or companies that have a DRC of more than 10 per cent, have a levy rate of S$650.
Starting from Sep. 1, 2022, the Tier 1 levy rate will be increased to S$450. By Sep. 1, 2023, it will increase to S$550, and from Sep. 1, 2025, the levy rate will be S$650, equal with that of the current Tier 2 levy.
New work permit levy framework for construction and process sectors
Singapore will also be adjusting its work permit policies for the construction and process sectors, in order to "spur greater productivity improvements and support more manpower-efficient solutions," Wong said.
"This will help transform the sectors that have been more heavily dependent on foreign workers."
The DRC for work permits will be reduced from the current 1:7 to 1:5.
In addition, the current Man-Year Entitlement (MYE) framework will be replaced with a new levy framework to encourage firms to support more offsite work and employ more higher-skilled work permit holders.
To give companies time to prepare for the moves, the new changes will take effect from Jan. 1, 2024.
Minister for Manpower Tan See Leng will elaborate further on these foreign worker policy changes at the Ministry of Manpower (MOM) Committee of Supply.
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Top image by Andrew Koay.