One of the obligations that come with hiring overseas people in Singapore is the Foreign Worker Levy (FWL). The FWL, basically a monthly charge that employers pay for hiring overseas workers. As an employer in Singapore, understanding and handling FWL is vital to maintain compliance with Singapore’s exertions laws.
Here, you will learn the importance of FWL for your business, from its definition, payment calculation to key cut-off dates.
Importance of Foreign Worker Levy (FWL) for Employers in Singapore
Singapore authorities institutes the Foreign Worker Levy as a totally important component of manpower regulations.
This is so that manpower policies can assist employers in tapping into local talents, thereby allowing industries to get access to foreign workers. Employers need be aware of the requirements regarding FWL in order not to face serious fines and legal conditions.
Understanding Foreign Worker Levy (FWL)
FWL is a fee that employers need to pay for hiring overseas people with a Work Permit or S Pass. This facilitates to regulate the quantity of overseas workers in Singapore. Also, it enables the employers avoid immoderate dependency on overseas hard work.
Types of Foreign Workers Liable to FWL
Work Permit Holders: These are usually employed in the construction, manufacturing, marine, and service industries.
S Pass Holders: The mid-level skilled staff employed in industries such as technology and healthcare.
The levy rate is based on the worker type and industry of the employer.
Calculation of Foreign Worker Levy
Factors Affecting Foreign Worker Levy Computation
There are several factors which FWL computation depends, and these include;
- Industry of operation that is either construction, services, or manufacturing
- Kind of the worker; that is, Work Permit holder of S Pass holder.
- The firm’s quota or dependency ceiling limit (DCL)
- Whether the worker is a higher-skilled or basic-skilled worker.
How to Calculate FWL: Step-by-Step Guide
Worker Type: Know whether the worker is a holder of the Work Permit or an S Pass holder
Your Quota: The second step your company needs to be quota compliant in your respective sector.
Levy Rates: The first thing you need to do is to know the levy rates that are on the MOM website of Singapore.
Levy Rates Applied: Using the appropriate rates, calculate your monthly levy payment for each foreign worker employed.
Checking FWL Requirements
Checking Eligibility and FWL Rate for Different Worker Types
To ensure that you are paying the correct levy, it is important to:
- Verify that the foreign workers in your employment are eligible.
- Check the FWL rate for each category of worker, such as higher-skilled, basic-skilled, and levies by industry.
Where to Find the Latest FWL Rates and Updates
Employers must check for the most recent updates of levy rates on the MOM website from time to time. Levy rates may have changes according to the policies set by the government. It is, therefore very important to keep oneself updated to be compliant with the law.
Process of Paying Foreign Worker Levy
Step-by-Step Instructions on How to Pay Foreign Worker Levy
Levy Bill: Receive levy bill monthly from CPF Board.
Bill Verification: Check the bill for accuracy of levy particulars.
Payment of Levy: The due date of the levy is on the 14th of every month.
Mode of Payment Accepted and Payment Channels
Payment of FWL can be made by:
GIRO – Deductions through a bank account designated
PayNow – Using UEN
Internet Banking – Through participating banks.
Telegraphic Transfer for employers maintaining foreign accounts.
Important Compliance and Reporting Deadlines
Due Dates for FWL Payment
Employer must make the payment of FWL not later than the 14th of each month.
If the 14th falls on a weekend or a public holiday, then it is to be paid the last working day before that date.
Penalties for Non-Compliance or Late Payment
Non-compliance with FWL requirements attracts the following:
- Late payment penalty at the rate of 2% per month.
- Suspension of privileges in granting Work Permits.
- Further enforcement actions by the authorities.
- Managing Change to Foreign Worker Employment
- Revision of FWL Payment Upon Changes in Employment Status or Worker Categories
Revision of FWL Payment Upon Hiring New Foreign Workers
Employers have to revise their levy payment when the following condition has been met:
- Hiring new foreign workers.
- Transferring workers between job categories or sectors.
- Renewal or application of new Work Permits or S Passes.
- Resources and Support
Get Professional Help from FastLane Hr
Foreign Worker Levy management has today become an important activity for the hiring of foreign labor in Singapore. It is the responsibility of the employers to ensure that they are calculating the amount of levy correctly, paying within due dates, and following all rules regarding the same. Understanding the latest changes in levy rates and processes will help you to avoid penalties and run smooth operations.
For more information and consultations on FWL, as well as other related services in HR and visa/immigrations, contact FastLane HR today.