Using foreign workers in Singapore provides businesses with a solution to their manpower needs, but it imposes a slate of compliance requirements on them. Out of all of them, the Foreign Worker Levy (FWL Levy) is a primary compliance mandate for employers. This guide clarifies what the FWL is, gives information on how it is calculated, and addresses how both employers and workers can ensure on-time payments. Through the right tools, along with professional help from FastLane HR, staying compliant has never been easier.
The FWL Levy: What is it in Singapore?
The Foreign Worker Levy (FWL) is a monthly levy that employers pay to the Government of Singapore for each foreign worker employed. This levy constitutes a pricing framework that aims at controlling the inflow of foreign workers within Singapore while at the same time encouraging companies to develop a healthy local workforce.
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It is a levy on the employers, not on the workers. They have no business deducting it from the workers’ salaries.
- Who is covered?
Work Permit and S Pass workers are engaged in many sectors, for example, construction, manufacturing, marine, process, and services.
By understanding the FWL Levy requirements, employers can better plan manpower budgets and avoid penalties.
How Levy Rates Are Calculated on FWL
The rates depends on:
- The market which your company operates (services, manufacturing, construction, etc.).
- The worker’s degree of skill, such as basic or advanced skilled.
- Foreign worker quota of the company.
For instance, a lesser skilled service industry worker might have a levy rate that is greater than a skilled service industry worker. Current rates can be seen on the Ministry of Manpower (MOM) webpage.
FWL Levy Calculator: A Guide to Estimating Your Levy Costs
MOM provides a formal FWL Levy Calculator meant for helping employers estimate exactly their levy costs for a month.
How to use it:
- Navigate to MOM’s official FWL levy calculator page.
- Input your industry, worker, and quota details.
- See your estimated monthly levy.
Example:
A services company hiring 3 basic-skilled foreign workers within quota may pay S$Xper worker per month, totalling S$3X monthly.
It helps you to accurately budget without any surprises.
Guide for Employer Payment of FWL Levy
Employers must pay the FWL monthly to the Singapore Government.
Payment frequency & deadlines:
- Payment is to be made by the 17th of the following month.
- Levy bills are charged by MOM.
Mode of Payment:
- GIRO (recommended):
- Direct debit from your company’s bank account.
- PayNow, eNETS, or Internet Banking can be used for one-time payments.
Payment Status Checking:
Employers can access WP Online or the MOM portal for levy bills verification and history of payments.
Levy Compliance for Employers under FWL Tips
Maintain your foreign worker quota current so you won’t have to pay high levy rates.
- Routine check on MOM announcements on levy updates.
- Avoid last-minute settlements in order to avoid penalties and suspension of work permits.
Leaving your payroll and levy management with experts such as FastLane HR reduces the paperwork load and ensures compliance.
Levy Refund or Waiver FWL
Employers might be eligible for a levy exemption or reimbursement for certain scenarios, for instance:
- Employee hospitalized for a prolonged period.
- Employee is abroad on leave for more than seven consecutive days.
How FastLane HR Is Beneficial for Managing FWL Levy in Singapore
It takes time to process FWL payments, payroll, HR, and compliance functions. Full-cycle HR and accounting services of FastLane HR guarantee of:
- Correct FWL payments on time.
- Compliance with MOM regulations.
- payroll, tax, and employee information management.
We enable business owners to concentrate on business growth while remaining completely compliant.
Contact FastLane HR now and receive expert support for your FWL Levy and a majority of your other HR requirements.
Conclusion
The Foreign Worker Levy is a vital component of employing foreign talent for Singapore companies. Understanding its workings, using the calculator on the website, and settling payments on time helps employers stay up-to-date without stretching their budgets too thin.
For companies looking at automating this functionality, there is expert help available through FastLane HR to handle all aspects of HR and accounting — such as managing the FWL — so that you need not focus on it at all.
Frequently Asked Questions
A monthly levy payable from employers for each overseas employee employed.
No, employers must bear the cost entirely.
Within 17 days of the next month.
We administer levy calculation, payment, and compliance within our array of HR and accounting services.