If your firm hires Work Permit or S Pass holders, the Local Qualifying Salary increase on 1 July 2026 is the change to read before payroll runs. The LQS does not directly cap your foreign hiring — it sets the salary at which each local employee “counts” toward the quota that does. When the threshold moves up, locals who counted yesterday may count for less tomorrow, quietly shrinking your entitlement. This is the working version of what we tell clients: what changes, what does not, and what to check before the deadline.

What the LQS is, and what it actually controls

The Local Qualifying Salary (LQS) is the monthly salary a Singapore citizen or permanent resident must be paid for the firm to count them as a full local employee when calculating its Work Permit and S Pass quota entitlement. It is, in plain terms, the local-headcount gate for foreign-worker quota.

It is not a national minimum wage and it is not a fee. It is a counting rule. The more locals you employ at or above the LQS, the larger the foreign-worker quota your firm unlocks. The Ministry of Manpower (MOM) reviews the figure periodically to keep pace with wage growth and to discourage token roles created only to inflate a firm’s quota.

“Full-time” for LQS purposes means working at least 35 hours per week. Locals working fewer than 35 hours a week are assessed on a gross hourly basis; the live MOM page quotes S$10.50 per hour gross for part-timers (we treat the hourly figure as current — confirm whether it moves on 1 July before relying on it).

The change at a glance: LQS rises to S$1,800/month

From 1 July 2026, the LQS for full-time local employees rises from S$1,600 to S$1,800 per month. MOM’s published wording is direct: “From 1 July 2026, the LQS for local employees working full-time will be increased from $1,600 to $1,800.”

That is a S$200 step up. Its practical effect is on the salary bands used to count your locals — both the full-count threshold and the half-count floor move with it.

Announcement date vs effective date: when the new figure bites

The new LQS was announced on 3 March 2026 at Committee of Supply 2026, but it only takes effect on 1 July 2026. These two dates are distinct and matter for compliance.

Until 30 June 2026, the LQS remains S$1,600 and the existing counting bands apply. From 1 July 2026, the S$1,800 figure and the new bands take over. Do not apply the higher figure early, and do not assume the old bands carry past 30 June.

How locals count toward your quota from 1 July 2026

From 1 July 2026, each local counts toward your Work Permit and S Pass quota entitlement on a three-band scale tied to the new LQS. The bands are full count, half count, and nil count.

Note that some locals are excluded from the count regardless of salary. Platform workers are not counted, because they are not employees under a contract of service. The counting FAQ also indicates that business owners of sole proprietorships and partnerships, and employees who draw salaries from three or more employers, are excluded — confirm the full exclusion list on the MOM FAQ before finalising your count.

A worked example: how the recount can shrink your entitlement

Consider a services firm with five local employees. Same five people, same payroll — here is how each one counts before and after 1 July 2026:

The local count falls from 4.0 to 2.5 purely because the threshold moved. Since quota entitlement is a multiple of your local count, that is a real reduction in how many Work Permit and S Pass holders you may hold. The fix is usually a modest payroll adjustment: lifting the two S$1,750 staff to S$1,800 restores them to a full count each.

PWM vs LQS: the two-condition rule, stated correctly

Firms that hire foreign workers must meet two conditions, not one. MOM’s framing is precise, and it is easy to overclaim here.

1. Pay PWM wages to local employees covered by the relevant Sectoral or Occupational Progressive Wage Models (PWMs).
2. Pay at least the LQS to all local employees not covered under a PWM.

So the LQS is not a blanket “pay everyone S$1,800 or lose your work passes” rule. For PWM-covered staff, the binding floor is the applicable PWM wage; the LQS leg applies to everyone else. Both conditions must be satisfied to remain eligible to employ foreign workers.

Who is affected: firms using Work Permit and S Pass quota

The LQS change matters to any firm whose foreign hiring relies on quota — that means Work Permit and S Pass holders. Both pass types sit under a quota and attract a monthly foreign-worker levy.

• Work Permit holders are limited by a quota and require a monthly levy.
• S Pass holders sit within a sub-quota — up to 10% of total workforce in the services sector and 15% in other sectors — and also attract a levy.

Because both quotas are sized off your local count, every firm in this position should expect the recount to bite on 1 July 2026.

What it does NOT change: EP carries no quota and no levy

The LQS change does not affect Employment Pass (EP) holders. The quota and levy frameworks are defined only for Work Permit and S Pass — EP holders do not count against the foreign-worker quota and carry no levy.

EP eligibility is governed instead by a qualifying salary and the COMPASS points test, not by the LQS. Recounting your local headcount on 1 July will not alter how many EP holders you may employ. For the EP rules themselves, see our complete EP guide for 2026 and our explainer on the COMPASS framework.

Action checklist before 1 July 2026

The single most useful thing to do before 1 July 2026 is to recount your locals at the new bands and fix any quota shortfall in payroll. A practical sequence:

• Recount at S$1,800. Re-run your local headcount using the 1.0 / 0.5 / nil bands above and compare it to your current count.
• Flag the near-misses. Identify locals paid between S$1,600 and S$1,799 — they drop from 1.0 to 0.5 unless adjusted — and anyone between S$800 and S$899 who falls out of the count entirely.
• Model the quota impact. Translate the new local count into your Work Permit and S Pass entitlement and check whether any current pass holder would breach it.
• Confirm the two-condition position. Verify PWM-covered staff are on PWM wages and all other locals meet the LQS.
• Check exclusions. Remove platform workers and any other excluded categories before relying on your count.
• Decide and document. Adjust salaries or hiring plans, and keep a dated record of the recount.

How Asprin helps you protect your quota

Asprin handles the recount and the compliance read so you do not have to reverse-engineer MOM’s bands under deadline. We map your local headcount against the new S$1,800 LQS, model the effect on your Work Permit and S Pass entitlement, and flag exactly which salary adjustments restore a full count — before 1 July 2026, not after a quota breach.

A named specialist reviews your case within the same business day and quotes a fixed fee. For the broader picture, see how the pass types differ in our guide to EP vs S Pass vs Work Permit. MOM polices quota integrity closely, and work-pass fraud is actively prosecuted.

Sources and further reading

• MOM — Local Qualifying Salary (LQS): figure, bands and the two-condition rule
• MOM — How to count local employees for Work Permit and S Pass quota
• MOM — Factsheet on Lower-Wage Workers (3 March 2026 announcement)
• MOM — S Pass quota and levy requirements
• MOM — What is the foreign worker levy
• MOM — Why platform workers are not counted toward quota
• Asprin — Work Permit and S Pass quota support
• Asprin — EP vs S Pass vs Work Permit (2026)