Budget 2022: Salary thresholds for new Employment Pass, S Pass applicants to be raised

From September this year, the minimum qualifying salary for new Employment Pass applicants will be raised from the current $4,500 to $5,000. PHOTO: ST FILE

SINGAPORE - Employers who hire foreign workers will soon have to pay them higher minimum salaries.

From September this year, the minimum qualifying salary for new Employment Pass (EP) applicants will be raised from the current $4,500 to $5,000. For the financial services sector, which has higher salary norms, the bar will be raised from $5,000 to $5,500.

The salary thresholds are tweaked from time to time to ensure EP holders are of the right calibre - because how much the employer is prepared to pay is a practical indicator of their quality, said Finance Minister Lawrence Wong on Friday (Feb 18).

"EP holders should be professionals and senior executives who can contribute to our economy, sharpen the skills of those they work with, and strengthen our workforce."

The move ensures that incoming EP holders are comparable in quality to the top one-third of the local PMET (professional, manager, executive and technician) workforce.

"Beyond the qualifying salary, we will refine how we assess EP applications, to improve the complementarity and diversity of our foreign workforce, and also to increase certainty and transparency for businesses," he added.

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However, Mr Wong stressed that the Republic must continue to stay open and bring in skills from around the world, even as it invests in Singaporeans.

"By combining local and foreign professionals, we form the best teams in Singapore to create value together," he added.

"This gives us that extra advantage to excel amidst intense global competition, and to create many more good jobs and career choices for Singaporeans."

Besides EP salaries, the salary thresholds for S Pass holders will also be raised.

From September this year, the minimum qualifying salary for new applicants will be pushed up from the current $2,500 to $3,000. A higher salary threshold of $3,500 will be introduced for the financial services sector.

Mr Wong said the goal is for these mid-level skilled workers to be of similar quality as the top one-third of local associate professionals and technicians.

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The minimum qualifying salary for new S Pass applicants will be raised again in September next year, and in September 2025. The specific salary values will be announced closer to implementation, based on the prevailing local wages then.

For older EP and S Pass applicants, their higher qualifying salaries will also be raised in tandem. For renewal applications, the changes will apply from September 2023 - one year later - to give businesses enough time to adjust.

To better manage the flow of S Pass holders, the tier 1 levy, which has a quota of up to 10 per cent of the total workforce, will also be progressively adjusted to $650 by 2025, from the current $330.

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Meanwhile, work permit policies for the construction and process sectors, which are more heavily dependent on foreigners, will be tweaked.

For instance, from January 2024, the Dependency Ratio Ceiling - or the proportion of foreign workers a firm can employ - will be reduced from 87.5 per cent to 83.3 per cent.

The current Man-Year Entitlement framework - which refers to the total number of work permit holders allocated to a contractor for specific projects - will be replaced with a new levy framework to encourage firms to support more off-site work and employ more higher-skilled work permit holders. This change will also take effect from January 2024.

More details on the various foreign worker policy changes will be announced during the debate on the Ministry of Manpower's budget.

Read next - Budget 2022 highlights: GST hike, higher income tax for top earners and CDC vouchers for all

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