Last reviewed: 12 September 2026
Quick Answer
The Foreign Worker Levy (FWL) is a monthly charge MOM collects from employers for every Work Permit holder they employ, used to moderate how much any one company relies on foreign labour. Rates depend on the worker’s skill tier — R1 (higher-skilled) or R2 (basic-skilled) — and, in manufacturing and services, on your company’s Dependency Ratio Ceiling utilisation, ranging roughly from $250 to $950 a month depending on sector and tier. Bills are issued monthly and payment is due by the 17th of the following month, ideally via GIRO; late payment adds a penalty of 2% per month or $20, whichever is higher, capped at 30% of the outstanding levy. From 2028, MOM will simplify the tier structure and raise several sector rates.
In This Guide
What Is the Foreign Worker Levy?
The Foreign Worker Levy (FWL) is a monthly charge MOM collects from employers for every Work Permit holder they employ. It isn’t a service fee — it’s a policy lever that keeps the cost of hiring foreign workers higher than hiring locals, moderating how much any one company relies on foreign labour. Work Permit holders are the group covered by FWL in the form discussed here; S Pass holders sit under a related but separate levy and quota framework covered in our Work Pass Guide.
Two things determine your monthly bill for a given Work Permit holder in most sectors: the worker’s skill classification (R1 or R2) and, in manufacturing and services, which Dependency Ratio Ceiling (DRC) tier your company falls into.
⚖️ MOM Requirement
Employers cannot recover the levy from workers. The Employment of Foreign Manpower Act makes it an offence to deduct or recover the levy — or any other employment-related cost — from a Work Permit holder’s salary. Violations can mean fines, imprisonment, or a ban on hiring foreign workers.
How Levy Tiers Work: R1 vs R2 and the Dependency Ratio Ceiling
Workers fall into two skill bands. R1 (“higher-skilled”) status requires the worker to hold a recognised trade certification or pass an approved skills test, generally alongside a higher basic salary; R2 (“basic-skilled”) is the default. Upgrading a worker from R2 to R1 lowers the levy considerably — often by $250 to $400 a month — so sponsoring a skills assessment for a worker who’s likely to pass can pay for itself within months.
In manufacturing and services, the levy is also tiered by your company’s Dependency Ratio Ceiling utilisation: the higher the proportion of your workforce that is foreign, the higher the levy band applies to every additional Work Permit holder. Construction, marine shipyard and process sectors instead run mostly on Man-Year Entitlement (MYE) allocation, which caps how many Work Permit holders a project can bring in, with levy split between “on MYE quota” and “MYE waiver” rates.
Quota vs Levy: Two Different Controls
Employers often conflate the two, but MOM’s foreign workforce policy runs on two separate dials. The quota (Dependency Ratio Ceiling) is a hard cap — the maximum proportion of your workforce that can be foreign work pass holders, calculated against your local workforce headcount. The levy is the price you pay for each foreign worker within that cap. You can be fully within quota and still pay a high levy if you’re near the top of your DRC band; exceeding the quota, on the other hand, blocks you from hiring further Work Permit holders regardless of what levy you’re willing to pay.
| Control | What It Limits | What Happens If You Breach It |
|---|---|---|
| Quota (DRC) | Maximum share of your workforce that can be foreign work pass holders | Application for a new Work Permit or S Pass is rejected outright |
| Levy | The monthly cost per Work Permit holder within your quota | Late payment penalties, and eventually work pass suspension or cancellation |
Levy Rates by Sector
Rates below are standard monthly levy amounts per Work Permit holder at time of writing. Budget 2026 already locked in further increases from 2028, so confirm current figures on MOM’s levy pages before budgeting a new hire.
Running delivery or transport vehicles? SGFleetGuide (a sister site) breaks down levy costs for logistics and fleet operators.
| Manufacturing DRC Tier | Higher-Skilled (R1) | Basic-Skilled (R2) |
|---|---|---|
| Tier 1: up to 25% dependency | $250 | $370 |
| Tier 2: 25%–50% dependency | $350 | $470 |
| Tier 3: 50%–60% dependency | $550 | $650 |
| Services DRC Tier | Higher-Skilled (R1) | Basic-Skilled (R2) |
|---|---|---|
| Tier 1: up to 10% dependency | $300 | $450 |
| Tier 2: 10%–25% dependency | $400 | $600 |
| Tier 3: 25%–35% dependency | $600 | $800 |
Construction, marine shipyard and process sectors run on Man-Year Entitlement instead of a DRC tier system:
| Sector | Higher-Skilled (R1) | Basic-Skilled (R2) |
|---|---|---|
| Construction (on MYE quota) | $300 | $700 |
| Construction (MYE waiver, non-traditional sources) | $600 | $950 |
| Marine shipyard | $300 | $500 |
| Process (on MYE quota) | $300 | $450 |
📋 Classification Note
A worker’s R1/R2 status isn’t permanent. If a basic-skilled worker later passes a recognised skills test or earns a relevant certificate, employers can apply to reclassify them as higher-skilled and reduce the levy from the next billing cycle.
How and When to Pay
MOM issues levy bills on the 3rd working day of each month for the previous month’s levy, with payment due by the 17th. There’s no pro-rating — hire a worker on the 28th of the month and you still owe a full month’s levy for that period. GIRO is the method MOM recommends, since it deducts automatically and removes the risk of missing a due date; PayNow Corporate is the fallback for employers without GIRO set up.
Employers who pay via GIRO or register for PayNow Corporate (by linking their company’s UEN) also receive any future levy rebates faster, since MOM credits rebates through the same channel used for payment. Setting this up once removes two recurring admin headaches — missed due dates and slow rebate receipt — for the life of the account.
Levy Waivers: When You Don’t Have to Pay
Two situations let you apply for a levy waiver on a specific worker: overseas leave of at least 7 consecutive days, capped at 60 calendar days per calendar year and applied for after the worker returns to Singapore; and hospitalisation leave certified by a Singapore-registered doctor. Waivers must be applied for — MOM does not deduct them automatically — so keep leave and medical records ready to submit promptly.
What Happens If You Pay Late
⚠️ Non-Compliance Penalties
Late levy payment adds a penalty of 2% of the outstanding amount per month, or $20, whichever is higher, capped at 30% of the total outstanding levy. Beyond the financial penalty, MOM can suspend new Work Permit applications and renewals, and — for sustained non-payment — cancel existing permits and pursue the debt through civil recovery.
Levy Changes Coming in 2028
At Budget/Committee of Supply 2026, MOM announced that manufacturing and services will move from three levy tiers to two starting 2028, and several sectors will see basic-skilled (R2) rates rise — marine shipyard from $500 to $600, and process sector rates increasing as well. These changes sit alongside related Employment Pass and S Pass salary criteria changes taking effect from January 2027 for new applications and January 2028 for renewals. None of this changes 2026 rates, but it’s worth budgeting for now if your Work Permit headcount is stable or growing.
Frequently Asked Questions
Does the levy apply to S Pass and Employment Pass holders?
Not in this form. Work Permit holders are covered by the Foreign Worker Levy; S Pass holders sit under a separate levy and quota framework, and Employment Pass holders aren’t subject to a levy at all.
Can I deduct the levy from my worker’s salary?
No. It’s an offence under the Employment of Foreign Manpower Act to recover the levy from a worker’s pay, with fines and imprisonment as possible penalties.
How do I get a worker reclassified from basic-skilled to higher-skilled?
Sponsor them for a recognised skills test or certification tied to their trade, then apply to MOM for reclassification once they pass. The lower levy applies from the next billing cycle.
What happens if I stop paying the levy for a worker?
MOM can suspend new work pass applications and renewals for your company, cancel the affected worker’s permit, and pursue the outstanding levy through civil recovery, on top of the standard late payment penalty.
Will my levy rate change between 2026 and 2028?
Rates are unchanged for most sectors through 2027, but MOM confirmed at Budget 2026 that manufacturing and services levy tiers will consolidate from three to two from 2028, with marine shipyard and process sector basic-skilled rates rising from the same year.
WorkRightSG provides general information only. Nothing on this site constitutes legal advice. For advice specific to your situation, consult a qualified employment lawyer or contact the Ministry of Manpower directly.