S Pass Levy Rising to S$650: How a Shift Toward EP Talent Could Strengthen Your 2026 Workforce Plan

Introduction: Why Does Singapore’s Rising S Pass Levy Matter for Your 2026 Workforce?

Singapore will progressively increase the S Pass levy to as high as S$650 by 2026, marking one of the most significant manpower cost adjustments for employers in recent years. For businesses—especially SMEs—the levy increase is not just a financial issue. It forces a strategic shift in how employers design job roles, hire foreign professionals, and allocate manpower budgets.

In contrast, the Employment Pass (EP) remains levy-free, quota-free, and better aligned with Singapore’s move toward a high-skilled workforce. Many companies are now re-evaluating whether more roles should be upgraded or redesigned so they qualify for EP instead of S Pass.

This article explains why the levy increase is happening, how it affects businesses, and how transitioning toward EP talent could reduce costs, strengthen productivity, and improve long-term compliance. As always, Paul Hype Page & Co. supports companies in Singapore, Malaysia, Indonesia, Hong Kong, Australia, China, and Japan with manpower strategy, incorporation, payroll, and visa advisory services.

Why Is the S Pass Levy Increasing to S$650 by 2026?

The S Pass levy increase is part of a long-term national effort to ensure that Singapore’s labour market remains competitive, resilient, and anchored by high-value skills.

What is the government’s intention behind the levy hike?

The adjustments aim to:

• Reduce reliance on mid-skilled foreign labour
• Encourage workforce upgrading and job redesign
• Promote productivity-driven growth instead of manpower-driven expansion
• Ensure fair consideration of Singaporean talent
• Shift business models toward higher-skilled roles

Singapore wants companies to invest in capabilities—not just labour quantity.

How much financial impact does the levy create?

By 2026, employers may pay:

• Up to S$650 per S Pass worker per month
• Up to S$7,800 per year per S Pass employee

This cost stacks quickly, especially for companies that rely heavily on mid-skilled roles.

For example, a team of 10 S Pass workers can incur:

10 × S$7,800 = S$78,000 per year in levy alone.

This does not include salary increases or quota restrictions. It’s no surprise that businesses are reassessing the value of their S Pass-dependent roles.

What Are the Key Differences Between S Pass and Employment Pass Hiring in 2026?

Understanding the cost structure and compliance requirements is essential for workforce planning.

S Pass (2025–2026 Scenario)

• Monthly levy: Up to S$650
• Salary: Rising minimum qualifying salary
• Quota: Restricted by Dependency Ratio Ceiling
• Target profile: Mid-skilled workers
• Increasing scrutiny on sector-specific hiring

Employment Pass (2025–2026 Scenario)

• No levy
• No quota
• Governed by COMPASS scoring
• Target profile: Professionals, managers, specialists
• Salary: Based on age & industry norms (from S$5,000+)
• More aligned with Singapore’s high-skill workforce transformation

Interpretation for 2026 Workforce Planning

If a role can be redesigned, enhanced, or upskilled to meet EP criteria, employers often find EP talent:

• More productive
• More experienced
• More cost-efficient
• Less restricted
• More adaptable for long-term business growth

Why Should Businesses Consider Shifting from S Pass to EP Talent in 2026?

1. EP Has Zero Levy — A Major Cost Advantage

The biggest practical reason is financial.

For every employee upgraded to EP (instead of S Pass), you immediately avoid:

• S$650 per month
• S$7,800 per year

For companies with multiple S Pass staff, this easily reaches five or six figures in annual savings.

2. EP Talent Typically Contributes Higher Productivity Output

EP hires generally come with:

• More specialised skills
• Professional qualifications
• Industry expertise
• Stronger English proficiency
• Greater adaptability to regional or global roles

This leads to higher value per employee and stronger ROI on manpower spending.

3. EP Hiring Has Zero Quota Limitations

S Pass hiring is constrained by the Dependency Ratio Ceiling (DRC), which fluctuates by industry.

EP hiring, however, offers:

• Unlimited hiring potential
• No DRC restrictions
• No foreign worker levy
• Greater flexibility for scaling teams
• No need for constant quota management

Companies with strategic growth plans—such as expanding regional operations or creating specialist teams—gain far more agility with EP hiring.

4. EP Roles Improve Corporate Image and Market Positioning

A workforce anchored by professional-level talent signals:

• Higher capability
• Better governance
• Stronger operational efficiency
• Greater chance of long-term sustainability

This matters significantly in sectors such as:

• Tech & AI
• Finance & fintech
• Consulting
• Engineering
• Healthcare
• Professional services
• Education
• Manufacturing & automation

5. EP Roles Align With Singapore’s Economic Direction

Singapore is moving very clearly toward:

• High-value industries
• Regional HQ activities
• R&D and innovation
• AI and deep tech
• High-skilled knowledge roles

Companies that align with these priorities enjoy smoother visa approval trends, more government support, and stronger employment branding.

How Do You Know if a Job Role Can Be Restructured to EP Instead of S Pass?

Many employers underestimate how flexible job structuring can be. A mid-skilled role can often be enhanced or redesigned to qualify for EP if it is aligned with:

1. Expanded Job Responsibilities

EP roles typically require more accountability, such as:

• Supervisory functions
• Specialist expertise
• Client-facing responsibilities
• Project management
• Technical proficiency
• Advanced software or analytical skills

A job redesign exercise often reveals natural opportunities for elevating a role’s scope.

2. Salary Alignment with EP Benchmarks

If your salary range already aligns with EP standards, you may already be eligible—without realizing it.

3. Strong Candidate Profile

Candidate factors that support EP approval:

• Relevant degrees
• Professional certifications
• Experience in regional/global roles
• Industry specializations
• Niche skill sets

4. Employer’s COMPASS Score

A company scores well when:

• Salaries meet sector benchmarks
• The role fills a skills shortage
• The company has good diversity
• The company has positive local hiring practices
• Industry norms align with hiring needs

Many SMEs are surprised to discover they naturally meet COMPASS expectations.

How Will the 2026 S Pass Levy Affect SMEs, Startups, and Growth-Stage Companies?

1. SMEs Will See Direct Cost Pressure

SMEs with S Pass-heavy teams may struggle most, as levy increases directly hit their cash flow. Every additional S$100–S$200 in levy per worker impacts annual budgets significantly.

2. Startups May Prefer EPs to Avoid Quota Limitations

Startups typically employ:

• Small teams
• High-skill roles
• Lean operating models

EP hiring gives startups more agility without quota restrictions.

3. Companies Seeking Regional Scale Will Prefer EP Profiles

EP hires are better suited for:

• Regional expansion
• Market development
• International client interfacing
• Technical leadership
• Product development

These functions rarely match the job scope of S Pass positions.

4. Labour-Intensive Industries Will Feel the Strongest Pullback

Industries such as:

• Retail
• F&B
• Hospitality
• Cleaning
• Construction

will feel more pressure but will also be encouraged to:

• Adopt technology
• Redesign jobs
• Improve training
• Hire higher-skilled foreign talent

This aligns with Singapore’s broader productivity agenda.

What Are the Hidden Costs of Maintaining S Pass Workers from 2025–2026?

1. Rising Minimum Salaries

Every few years, S Pass minimum salaries increase—adding a recurring financial burden.

2. Levy Costs Will Increase Further

The S$650 levy is not necessarily the final ceiling. Future tightening is possible.

3. Quota Restrictions Tighten Over Time

Industries that fail to automate or upskill may face further quota cuts.

4. Higher Turnover & Training Costs

Mid-skilled roles typically have higher turnover compared to EP-level employees.

5. Compliance Risks

Misclassification or weak documentation can lead to penalties, even suspension of hiring privileges.

In contrast, EP hiring avoids most of these operational complications.

How Paul Hype Page Helps Businesses Build an EP-Optimised Workforce for 2026

Paul Hype Page & Co. provides end-to-end support across corporate incorporation, accounting, payroll, tax advisory, and work pass services—all backed by regional coverage and professional expertise.

1. Workforce Planning Advisory for EP Conversion or Job Redesign

We assess:

• Your current manpower structure
• Which S Pass roles can transition to EP
• Salary benchmarks for EP approval
• Cost savings from removing levies
• COMPASS scoring viability

2. Full Employment Pass Application & Appeal Handling

Our team manages:

• COMPASS score assessment
• Document preparation
• Professional job descriptions
• Justification letters
• Appeal submissions (if necessary)
• Continuous status monitoring

Our long-term clients consistently report high EP approval rates thanks to our structured, compliant approach.

3. HR, Payroll, Accounting & Compliance Integration

Through our full-service ecosystem, clients enjoy:

• Incorporation across 7 countries
• Monthly accounting
• Annual tax filing
• Payroll & CPF management
• Corporate secretarial services
• Ongoing MOM compliance guidance

This makes workforce planning smoother and safer.

4. Long-Term Renewal and Compliance Monitoring

EP renewals are becoming stricter. We help clients stay ready through:

• Early renewal evaluations
• Salary & job scope adjustments
• Company profile optimization
• Consistent compliance throughout the year

How Should Companies Strategically Prepare Their 2026 Workforce Plan?

Step 1: Audit all current S Pass holders

Evaluate cost, job scope, performance, and upgrade potential.

Step 2: Identify roles suitable for elevation to EP

Many operational roles can be upgraded through skills, software adoption, or job redesign.

Step 3: Re-assess salary structure and projected budgets

Factor levy savings into total compensation planning.

Step 4: Improve your COMPASS score strategically

Focus on diversity, skills shortages, salary competitiveness, and local hiring initiatives.

Step 5: File EP applications earlier before 2026 tightening

Singapore visa policies evolve yearly—early adjustment is advantageous.

Conclusion: Is Shifting from S Pass to EP the Better Strategy for 2026?

With the S Pass levy rising to S$650, many employers face steep manpower cost increases. Transitioning toward EP talent not only eliminates levy expenses but also strengthens your workforce with higher-skilled, more versatile professionals.

The shift also prepares companies for Singapore’s future—a high-skill, innovation-led economy where productivity matters more than headcount.

For companies ready to optimise manpower for 2026, Paul Hype Page & Co. provides expert guidance, visa support, payroll management, accounting, tax advisory, and corporate compliance solutions across seven regional markets.