Hiring foreign professionals — total cost model — Step-by-step walkthrough
The total cost of hiring a foreign professional in Singapore is far more than salary. Once you add the Employment Pass qualifying salary, levies where applicable, CPF for any local hires the quota requires, relocation, and agency and administration, the fully loaded first-year cost typically runs 1.3 to 1.6 times the headline salary. This guide to hiring foreign professionals sets out the practical detail.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What the total cost model covers
Hiring a foreign professional in Singapore means budgeting for the Employment Pass (EP) qualifying salary, application and issuance fees, relocation, and the indirect costs of meeting the Complementarity Assessment Framework (COMPASS) and Fair Consideration Framework. Unlike Work Permit holders, EP holders do not attract a foreign-worker levy and CPF is not payable on their salary, but the qualifying-salary floor and COMPASS points effectively set a higher minimum cost than many employers expect.
For a closely related perspective, see our guide on Foreign Tax Credit (FTC), pooling and limitations — Step-by-step walkthrough.
Who this model is for
This walkthrough is for employers recruiting professionals, managers, executives and technicians from overseas, typically on the Employment Pass or, for mid-skilled roles, the S Pass. It is most useful for finance, technology, healthcare and professional-services firms building teams that mix local and foreign talent. The Employment of Foreign Manpower Act 1990 governs the work-pass framework and the conditions attached to each pass.
Refer to the official guidance from the relevant Singapore authority for the latest position.
Employment Pass qualifying salary and COMPASS (numerical)
From 1 January 2025 the Employment Pass qualifying salary is S$5,600 per month for most sectors and S$6,200 for the financial-services sector, rising with age so that candidates in their mid-40s need around S$10,700. Candidates must also pass COMPASS, a points system scoring salary, qualifications, diversity and local employment, requiring at least 40 points. The S Pass qualifying salary is S$3,150 (higher for older and financial-services candidates) and S Pass holders attract a monthly levy of S$650 in the higher tier, plus a quota limit.
Full first-year cost breakdown
For an EP professional on S$6,500 a month (S$78,000 a year), an illustrative fully loaded first-year cost:
- Annual salary: S$78,000
- EP application and issuance fees: S$330 (S$105 application + S$225 issuance)
- Recruitment / agency fee (if used): S$8,000 to S$16,000 (roughly 10 to 20 per cent of annual salary)
- Relocation, flights and initial housing support: S$5,000 to S$20,000
- Medical insurance and onboarding: S$1,500 to S$4,000
Fully loaded first-year cost: roughly S$95,000 to S$120,000, or about 1.3 to 1.6 times the headline salary. For S Pass holders, add the levy of up to S$7,800 a year per head.
See also the published material at this official source.
Step-by-step hiring process and timeline
1. Advertise the role on MyCareersFuture for at least 14 days where the Fair Consideration Framework applies. 2. Select on merit and confirm the candidate clears the qualifying salary and COMPASS. 3. Submit the EP application via MOM’s EP Online. 4. Receive the in-principle approval, usually within 10 business days to 8 weeks. 5. Arrange relocation and medical checks. 6. Issue the pass and register fingerprints and photo. 7. Onboard. The full timeline from offer to start date is commonly 6 to 12 weeks.
Common mistakes and gotchas
Employers frequently quote a salary that meets today’s floor but fails COMPASS once the diversity and local-employment factors are scored. Others forget the 14-day MyCareersFuture advertising requirement, delaying the application. A further trap is assuming an EP renewal is automatic; renewals are reassessed against the prevailing qualifying salary and COMPASS, so a candidate hired comfortably one year may fall short later. Budget for salary progression to stay above the rising age-adjusted floor.
Renewal risk and salary progression
The total cost model does not end at the first hire. Employment Pass renewals are reassessed against the prevailing qualifying salary, which rises with the candidate’s age, and against COMPASS at the time of renewal. A professional comfortably above the floor at 30 may fall short at 40 if their salary has not kept pace, forcing either a pay rise or a difficult conversation. Employers should therefore budget for salary progression of foreign hires and monitor the annual MOM updates to the qualifying salary. Building a renewal buffer into the compensation plan is cheaper than losing a trained employee because their pass cannot be renewed.
Comparing the passes on total cost
On a fully loaded basis, an Employment Pass professional carries no levy and no CPF, so the cost premium over salary is driven by recruitment, relocation and benefits, typically 1.3 to 1.6 times salary in year one and closer to salary thereafter. An S Pass holder is cheaper in headline salary but adds a levy of up to S$650 a month (S$7,800 a year) and counts against the firm’s quota, so the effective premium is higher relative to wages. Work Permit holders carry the highest levies and the strictest quota and housing rules. The right pass is the one the role genuinely qualifies for, but understanding the full cost of each helps employers structure roles and budgets realistically.
Related guides on hiring foreign professionals
Explore more across the Raffles group: Subsidiary of foreign parent — director and capital pitfalls — Step-by-step walkthrough, and our related article Hiring Foreign Tech Talent in Singapore 2026: A Strategic Pass Playbook.
FAQs
Is CPF payable on an Employment Pass holder's salary?
No. CPF is only payable for Singapore citizens and permanent residents. EP and S Pass holders do not attract CPF, though S Pass holders attract a monthly foreign-worker levy.
What is the 2025 Employment Pass qualifying salary?
From 1 January 2025 it is S$5,600 a month for most sectors and S$6,200 for financial services, rising with age to around S$10,700 for candidates in their mid-40s.
How long does an Employment Pass take?
An in-principle approval usually issues within 10 business days to about 8 weeks. Including advertising and relocation, the full hire commonly takes 6 to 12 weeks.
What is COMPASS?
COMPASS is the points-based Complementarity Assessment Framework scoring salary, qualifications, firm-level diversity and local employment. EP candidates generally need at least 40 points to qualify.
Will my Employment Pass renew automatically?
No. Renewals are reassessed against the prevailing qualifying salary, which rises with age, and against COMPASS. Budget for salary progression so the candidate continues to qualify.
Are recruitment agency fees regulated?
Agency fees charged to employers are commercial, commonly 10 to 20 per cent of annual salary. Fees that an employment agency may charge to the foreign worker are capped under MOM rules.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Little Big Employment Agency (EA Licence 19C9790) works with a panel of corporate and employment law firms; this article is general information, not legal advice.