Singapore Labour Policy Update: EP/S Pass Thresholds Raised Again, LQS Increased to S$1,800

In 2026, Singapore enters the “post-SG60” era. Against a backdrop of global fragmentation and intensifying competition, the government has placed “updating economic strategies” and “strengthening the workforce” on equal footing as core agendas.

In this year’s Budget, changes related to manpower policies are particularly concentrated. Thresholds for foreign employment passes have been raised again, and the Local Qualifying Salary (LQS) for local employees has been increased to S$1,800—multiple adjustments interlinked with a clear goal: to improve workforce quality, drive business transformation, and safeguard the employment and development of local workers.

1. Foreign Employee Policies: EP and S Pass Thresholds Raised Again

From January 2027, the salary thresholds for new applicants of Employment Pass (EP) and S Pass will be increased.

Employment Pass (EP)

• General industries: monthly salary threshold rises from S$5,600 to S$6,000

• Financial services: monthly salary threshold rises from S$6,200 to S$6,600

S Pass

• General industries: monthly salary threshold rises from S$3,300 to S$3,600

• Financial services: monthly salary threshold rises from S$3,800 to S$4,000

For renewal applications, the above adjustments will be delayed by one year and take effect from January 2028, providing a buffer for companies with already employed foreign staff.

This adjustment continues Singapore’s recent practice of “gradual annual increases with industry-specific standards.” The aim is to maintain the quality of the foreign workforce while avoiding excessive short-term operational impact on businesses.

2. Local Qualifying Salary (LQS) Increased

From July 2026, the LQS for local employees will be increased from the current S$1,600 to S$1,800 per month.

What is LQS? It is not a statutory minimum wage. Instead, it is the salary threshold used to calculate a company’s foreign worker quota when hiring foreign employees. Companies must pay full-time local employees at least the LQS-specified salary for them to count toward the “local employee count,” which determines how many foreign employees the company may hire.

In other words, each increase in LQS requires companies that want to maintain the same foreign worker quota to raise the salaries of their local employees accordingly. This adjustment directly affects sectors such as manufacturing, services, and construction, which rely heavily on foreign labor.

3. Support for Low-Wage Employees: Wage Increases and Skills Development

In line with the LQS increase, the government is simultaneously extending and strengthening support measures for low-wage employees.

Progressive Wage Credit Scheme (PWCS)

• The government continues to co-fund part of the wage increases for low-wage employees

• Subsidy rates are linked to the wage increase, aiming to reduce compliance costs for businesses

Workforce Skills Support (WSS)

• Provides systematic skills training for low-wage employees, covering industry fundamentals and workplace competencies

• Works alongside the progressive wage scheme to help employees move from “wage growth” to “value growth”

These measures indicate that the government is not treating “pay raises” as the policy endpoint, but hopes that through subsidies and training together, businesses can improve productivity and low-wage employees can gain long-term development opportunities.

The 2026 Budget presents three clear threads in workforce policy: continued increases in foreign worker thresholds, higher local salary thresholds, and enhanced support for low- and mid-income employees. These adjustments are Singapore’s systematic response to demographic trends, industry upgrading, and global competition. With the policies set to take effect soon, understanding the rules and making use of the support measures will be a shared task for employers and employees alike.