Local Qualifying Salary rate to rise

IMPACT – MEDIUM

What is the change? Singapore’s Local Qualifying Salary will increase on July 1. 

What does the change mean? Beginning July 1, local workers will be required to earn at least 1,300 Singapore dollars (about US$960) per month to be considered full employees for quota purposes. Locals earning between SG$650 and SG$1,300 will be considered one half of a local employee when calculating the quota entitlement.

• Implementation time frame: The salary thresholds will be raised July 1.
• Business impact: Employers in Singapore who are required to calculate their foreign worker quotas in order to sponsor foreign employees on work permits and S-passes.
• Next steps: Additional information is available on this Ministry of Manpower website.

Background: Singapore promotes the localization of its workforce by imposing quotas on the number of foreign employees companies can hire based on the number of local workers (Singaporean citizens or permanent residents) they employ. The Local Qualifying Salary, the minimum salary that employees must be paid to be considered in the quota calculation, is currently SG$1,200 per month for a full employee and between SG$600 to SG$1,200 per month to be considered one half of an employee.

Analysis & Comments: Employers should take the new salary thresholds into account when planning budgets and calculating foreign worker quotas. Employers should also note that the pending increase has no bearing on minimum monthly salaries for foreign nationals.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.