As Singapore’s economy matures into a high-value, digital-first hub, the strategy behind talent acquisition has shifted. In 2026, building a workforce is no longer just about filling seats; it’s about navigating a sophisticated regulatory framework that balances a “strong local core” with the need for global expertise.
For business owners and HR professionals, the choice between hiring local talent or foreign professionals involves a complex calculation of salary thresholds, levies, and the now-mandatory COMPASS framework. At Hallmark Corporate Services, we’ve broken down the essentials to help you make an informed hiring decision.
1. Hiring Local Talent: The Foundation of Growth
Singapore remains committed to uplifting its domestic workforce. Hiring Singaporeans or Permanent Residents (PRs) is often the most cost-effective route for long-term sustainability due to the absence of quotas and levies.
- Local Qualifying Salary (LQS): To count an employee as a “full local headcount” for your foreign worker quota, you must pay at least the LQS of S$1,600. Paying between S$800 and S$1,599 counts as half a headcount.
- Progressive Wage Model (PWM): In 2026, the PWM has expanded significantly. For instance, administrative staff must now earn at least S$2,360, and retail assistants earn S$2,565.
- PWCS Co-funding: To ease the transition, the government provides Progressive Wage Credit Scheme (PWCS) co-funding. For 2026, the government co-funds 20% of wage increases for lower-wage workers, helping SMEs manage rising manpower costs.
- Incentives: Beyond wage support, schemes like the Senior Employment Credit (SEC) and Career Conversion Programmes provide financial offsets for businesses that hire older workers or those switching industries.
2. Hiring Foreign Professionals: The Employment Pass (EP)
For high-level roles, the Employment Pass (EP) is the primary vehicle. In 2026, getting an EP approved requires more than just a high salary; you must pass the COMPASS (Complementarity Assessment Framework).
- EP Qualifying Salary: The baseline is now S$5,600 for most sectors and S$6,200 for Financial Services, with higher benchmarks for older, more experienced candidates (up to S$11,800).
- COMPASS Points System: Candidates need 40 points across four foundational criteria (Salary, Qualifications, Diversity, and Support for Local Employment) and two bonus criteria (Shortage Occupation List and Strategic Economic Priorities).
- The Advantage: EPs are not subject to a dependency ratio ceiling (DRC) or a monthly levy, giving you the flexibility to hire unlimited top-tier talent as long as they meet the points threshold.
3. Mid-Skilled Foreign Labor: The S Pass
If the role requires specialized technical skills but doesn’t meet the EP salary floor, the S Pass is the alternative. However, it is the most heavily regulated category in 2026.
- S Pass Quota: Most services sector firms are capped at an S Pass sub-quota of 10% of their total workforce.
- Monthly Levy: Unlike the EP, every S Pass holder incurs a foreign worker levy, which has risen to S$650 per month in 2026.
- Salary Threshold: The minimum qualifying salary for the S Pass is S$3,300 (S$3,800 for Financial Services).
4. Key Compliance Factors for 2026
Regardless of who you hire, three compliance pillars remain non-negotiable:
- Fair Consideration Framework (FCF): Before applying for an EP or S Pass, you must advertise the position on MyCareersFuture for at least 14 days and demonstrate that you have considered local candidates fairly.
- Central Provident Fund (CPF): Timely CPF contributions for local staff are a prerequisite for all foreign worker quota calculations.
- Mandatory Insurance: In 2026, all S Pass and Work Permit holders must be covered by a minimum medical insurance of S$60,000 per year.
Conclusion: Finding Your Balance
A successful Singapore business usually employs a “Blended Workforce” strategy—leveraging PWCS co-funding to grow a local team while utilizing the COMPASS framework to bring in niche global specialists.Managing these different tiers of employment requires meticulous planning to avoid quota violations or rejected work passes. At Hallmark Corporate Services, we provide end-to-end manpower solutions, from EP application management to payroll outsourcing and CPF compliance.