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Singapore's Local Qualifying Salary Increased: What Employers Should Know
Singapore's Local Qualifying Salary (LQS) has increased, and employers that hire foreign workers should understand how the change affects their local workforce, manpower planning, and foreign worker quota.
From 1 July 2026, the LQS increased from S$1,600 to S$1,800 per month for full-time local employees. For local employees working part-time, the requirement is now at least S$10.50 per hour in gross wages.
For businesses employing Work Permit, S Pass or Employment Pass holders, this is an important requirement to review.
What Is the Local Qualifying Salary?
The Local Qualifying Salary is a wage requirement that applies to firms employing foreign workers.
According to the Ministry of Manpower (MOM), these employers must:
Pay the applicable Progressive Wage Model (PWM) wages to local employees covered by a Sectoral or Occupational PWM.
Pay at least the LQS to all other local employees who are not covered by the relevant PWMs.
The LQS also plays an important role in determining how many local employees can count towards a company's Work Permit and S Pass quota entitlement.
What Changed From 1 July 2026?
The previous LQS for a full-time local employee was S$1,600 per month.
From 1 July 2026, it increased to:
Full-time local employees: At least S$1,800 gross per month for employees working 35 to 44 hours per week.
Part-time local employees: At least S$10.50 gross per hour for employees working fewer than 35 hours per week.
For full-time employees working more than 44 hours per week, the applicable LQS requirement increases according to the overtime hours worked.
This means employers should not simply assume that S$1,800 applies to every working arrangement. Working hours and the employee's applicable wage requirements need to be considered.
How Does the New LQS Affect Foreign Worker Quotas?
One of the most important things employers need to understand is that the LQS is also used when calculating foreign worker quota entitlement.
Under the current rules, a Singapore Citizen or Permanent Resident employed under a contract of service is counted as:
1 local employeeIf the employee earns at least S$1,800 per month.
0.5 local employeeIf the employee earns at least S$900 but less than S$1,800 per month.
For example, if a local employee previously earned S$1,600 and counted as one local employee under the previous LQS, that salary would no longer meet the S$1,800 threshold for a full local workforce count under the current rules.
This can affect the number of Work Permit and S Pass holders a company is entitled to employ.
Who Needs to Comply?
The requirement applies to firms that hire foreign workers, including companies employing Work Permit, S Pass or Employment Pass holders.
Employers should also remember that the LQS does not replace Progressive Wage Model requirements.
If an employee is covered by a relevant Sectoral or Occupational PWM, the employer must meet the applicable PWM wage requirement. Local employees who are not covered by the relevant PWMs must receive at least the LQS.
Why Was the LQS Increased?
MOM regularly reviews the LQS to keep pace with local wage growth and to ensure that local employees are employed meaningfully.
The Government announced the increase as part of its broader efforts to uplift lower-wage workers. MOM has also explained that the LQS helps prevent local workers from being employed in token roles or at token salaries simply to give businesses access to foreign worker quota.
In September 2026, MOM stated that the LQS had broadly corresponded to around the 6th percentile of the wage distribution of full-time resident employees between 2016 and 2026. MOM considers labour market and economic conditions when reviewing the threshold.
What Should Employers Do Now?
Since the new LQS has already taken effect, employers should review their workforce rather than treating the change as only a payroll adjustment.
1. Review Local Employee Salaries
Identify local employees whose monthly gross wages may fall below the new requirement and check whether they are covered by LQS or a Progressive Wage requirement.
2. Check Part-Time Employees
For part-time local employees, review both their wages and working hours to ensure the applicable hourly requirement is being met.
3. Recalculate Your Foreign Worker Quota
If your company employs Work Permit or S Pass holders, check whether changes to local workforce counts affect your available quota.
MOM provides a quota calculator that employers can use to plan their Work Permit and S Pass workforce.
4. Review CPF and Salary Records
MOM notes that late or non-payment of CPF contributions and salary declarations can affect a company's quota and may result in foreign workers being allocated to higher levy tiers.
Accurate payroll and employee information therefore matters beyond salary compliance alone.
5. Consider the Wider Manpower Cost
Businesses should consider how wage adjustments affect payroll costs, hiring budgets, foreign manpower requirements, and future workforce planning.
Rather than reviewing the LQS in isolation, employers can use the change as an opportunity to review whether their current workforce structure remains sustainable.
What Happens If Employers Do Not Comply?
Compliance is particularly important for businesses that rely on foreign manpower.
MOM states that firms which do not comply with the LQS and applicable Progressive Wage requirements will not be able to apply for new work passes or renew existing work passes.
For employers, this means overlooking local wage requirements can have a direct impact on future manpower planning.
Is There Support for Employers?
The Government has also enhanced the Progressive Wage Credit Scheme (PWCS) to help businesses manage wage increases for eligible lower-wage employees.
For 2026, the Government will co-fund up to 30% of qualifying wage increases for eligible lower-wage workers. PWCS has also been extended to 2028, with co-funding support of 30% in 2027 and 20% in 2028.
Employers should review the eligibility requirements separately rather than assuming that every LQS-related salary increase will automatically qualify for support.
Final Thoughts
The increase in Singapore's Local Qualifying Salary is more than a change to a salary figure.
For businesses employing foreign workers, it can affect local employee wages, foreign worker quota calculations, payroll planning, manpower costs, and work pass applications or renewals.
With the new S$1,800 LQS already in effect from 1 July 2026, employers should ensure their salary structures and workforce records are aligned with the current requirements.
Planning early and keeping employment records accurate can help businesses avoid unnecessary manpower and compliance issues.
Need Support With Your Hiring Plans?
Workforce requirements can change as employment regulations and salary thresholds are updated.
First Konnection supports employers with their recruitment needs and helps businesses find suitable talent for their teams.
If you're planning your next hire or reviewing your workforce needs, get in touch with First Konnection to discuss your recruitment requirements.
First Konnection is an award-winning education recruitment agency dedicated to connecting exceptional talent with leading companies in the education sector, both locally and across the region. Recognised as a trusted partner by educational institutions of all sizes, we specialise in delivering tailored recruitment and business solutions designed to address the unique challenges of the education industry.
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