For employers in Singapore, the number of local employees in the company directly affects their entitlement to hire Work Permit holders.
However, not every Singapore Citizen or Permanent Resident (PR) employee automatically counts as one local employee for quota purposes. The Ministry of Manpower (MOM) determines the local workforce count based on whether employees meet the Local Qualifying Salary (LQS) requirement.
Understanding how the LQS works is essential for employers planning their workforce, maintaining compliance, and managing future hiring needs.
What is the Local Qualifying Salary (LQS)?
The Local Qualifying Salary (LQS) is the minimum salary that a Singapore Citizen or Permanent Resident employee must earn before they can be counted towards an employer’s Work Permit quota entitlement.
The LQS serves as a measure to ensure employers maintain a meaningful local workforce while employing foreign workers.
From 1 July 2026, the LQS for a full-time local employee will increase from S$1,600 to S$1,800 per month.
Local Workforce Count from 1 July 2026
| Monthly Salary | Count Towards Work Permit Quota |
|---|---|
| S$1,800 or more | 1 Local Employee |
| S$900 to below S$1,800 | 0.5 Local Employee |
| Below S$900 | Not counted |
This means that simply employing local staff is not enough. Employees must also meet the applicable salary threshold before they are included in the local workforce count.
A Simple Example
Suppose your company employs five Singapore Citizens or Permanent Residents:
| Employee | Monthly Salary | Local Workforce Count |
|---|---|---|
| Employee A | S$3,500 | 1 |
| Employee B | S$2,200 | 1 |
| Employee C | S$1,800 | 1 |
| Employee D | S$1,000 | 0.5 |
| Employee E | S$700 | 0 |
Although there are five local employees on the payroll, MOM would count only 3.5 eligible local employees when calculating the company’s Work Permit quota entitlement.
Not Every Local Employee Counts
Certain individuals are not included in the local workforce count, even if they are Singapore Citizens or Permanent Residents.
According to MOM, these include:
- Business owners of sole proprietorships or partnerships.
- Employees who receive salaries and CPF contributions from three or more employers.
- Platform workers.
Employers should therefore ensure they understand which employees qualify before estimating their available Work Permit quota.
CPF Contributions Matter
MOM uses employers’ CPF contribution records when determining the local workforce count.
To be counted, employees must receive the required salary and the corresponding CPF contributions must be declared correctly.
Employers should also note that if they maintain multiple CPF accounts, they should not split an employee’s salary across different CPF accounts in an attempt to increase their quota entitlement. Such arrangements will not be recognised for quota calculations.
Hiring New Employees? Your Quota Will Not Increase Immediately
Hiring a new local employee does not immediately increase your Work Permit quota.
A newly hired employee will only be counted after:
- receiving their first full month’s salary; and
- the corresponding CPF contribution has been made.
As a result, employers planning to hire additional foreign workers should factor this timing into their workforce planning.
Why This Matters for Employers
The local workforce count directly affects an employer’s Work Permit quota entitlement.
An inaccurate understanding of the LQS requirements or local workforce count could affect hiring plans, workforce expansion, or the renewal of existing Work Permit holders.
With the LQS increasing from 1 July 2026, employers should review their payroll arrangements and ensure eligible local employees continue to meet the revised salary threshold.
Final Thoughts
Understanding how the Local Qualifying Salary affects foreign workforce quotas is an important part of workforce planning in Singapore. By keeping payroll records accurate, ensuring CPF contributions are made correctly, and staying updated on the latest Ministry of Manpower (MOM) requirements, employers can better manage compliance and minimise disruptions to their hiring plans.
As Singapore’s employment policies continue to evolve, regularly reviewing your workforce arrangements can help ensure your business remains compliant while supporting sustainable workforce planning for the future.
More information: www.linkcompliance.com | Email: info@linkcompliance.com
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Disclaimer: This article is provided for general informational purposes only and should not be regarded as legal or employment advice. Employers should refer to the latest guidance issued by Singapore’s Ministry of Manpower (MOM) or seek professional advice based on their specific circumstances.
Official References:
- Ministry of Manpower (MOM) – How should I count my local employees to calculate my Work Permit and S Pass quota?
https://www.mom.gov.sg/faq/work-pass-general/how-should-i-count-my-local-employees-to-calculate-my-work-permit-and-s-pass-quota - Ministry of Manpower (MOM) – Local Qualifying Salary (LQS)
https://www.mom.gov.sg/employment-practices/progressive-wage-model/local-qualifying-salary - Ministry of Manpower (MOM) – Work Permit Quota and Levy
https://www.mom.gov.sg/passes-and-permits/work-permit-for-foreign-worker/foreign-worker-levy
Fact checked against official Ministry of Manpower (Singapore) guidance as at July 2026.
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