Question 1

What is the total cost of hiring an employee in Singapore?

Accepted Answer

For a Singapore Citizen or PR earning S$4,000/month (age ≤55), the total employer cost is approximately S$4,691/month: S$4,000 salary + S$680 employer CPF (17%) + S$10 SDL (0.25%). For an S Pass holder at the same salary, there is no employer CPF but a S$650/month Foreign Worker Levy (FWL) applies, making the total cost approximately S$4,660/month. Always budget at least 15–20% above the gross salary for a local hire.

Question 2

What is the employer CPF contribution rate in Singapore?

Accepted Answer

Employer CPF contribution rates for Singapore Citizens depend on age: ≤55 years: 17%; above 55 to 60: 16%; above 60 to 65: 12.5%; above 65 to 70: 9%; above 70: 7.5%. These are applied on the employee's Ordinary Wages (OW), capped at the OW ceiling of S$8,000/month. Employer CPF is not required for Employment Pass holders or foreign workers on S Pass / Work Permit.

Question 3

What is the Skills Development Levy (SDL)?

Accepted Answer

The Skills Development Levy (SDL) is a mandatory levy payable by all employers for every employee — including foreigners — earning S$800 or more per month. The levy is 0.25% of the employee's gross wages, with a minimum of S$2 and a maximum of S$11.25 per employee per month (reached at a salary of S$4,500). SDL is administered by SkillsFuture Singapore and funds workforce training initiatives.

Question 4

What is the Foreign Worker Levy (FWL)?

Accepted Answer

The Foreign Worker Levy (FWL) is a monthly fee paid by employers to the Ministry of Manpower (MOM) for each S Pass or Work Permit holder. It does not apply to Employment Pass (EP) holders or Singapore Citizens/PRs. FWL rates vary by worker type and quota tier. S Pass holders attract a levy of S$650/month (basic tier) or S$800/month (Tier 2) as of 2025. Work Permit holders in services pay S$600–S$800/month depending on quota.

Question 5

Does CPF apply to foreigners working in Singapore?

Accepted Answer

No. CPF contributions are only required for Singapore Citizens and Permanent Residents. Employment Pass holders, S Pass holders, and Work Permit holders do not contribute to CPF. Instead, employers of S Pass and Work Permit holders pay the Foreign Worker Levy (FWL) to MOM. This means hiring local staff generally costs more in mandatory contributions, while hiring foreigners involves the FWL on top of salary.

Question 6

What other costs should employers budget for beyond salary?

Accepted Answer

Beyond salary, CPF, SDL, and FWL, employers should also budget for: employee benefits (medical, dental, hospitalisation insurance — typically S$100–S$300/month); annual leave encashment; AWS (13th month bonus, industry norm); training and development; recruitment costs; and office space per headcount. A realistic total employment cost is often 1.3–1.5× the gross salary for local hires, factoring all mandatory and common discretionary costs.

Cost Item	Who Pays	Rate	Applies To
Employer CPF	Employer	7.5–17% of OW (age-based)	SC / PR only
Skills Development Levy	Employer	0.25% (min S$2, max S$11.25/mo)	All employees
Foreign Worker Levy	Employer	S$400–S$800/mo (type/tier)	S Pass / WP only

Employee Cost Calculator Singapore 2026

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