Singapore’s Budget 2026 confirmed what many employers had been anticipating: the Employment Pass qualifying salary is rising again. From 1 January 2027, new EP applicants will need to clear S$6,000 a month instead of today’s S$5,600 — and the increase isn’t isolated to the EP. S Pass thresholds, the Local Qualifying Salary used for foreign worker quotas, and work permit levies are all moving in the same direction over 2026–2028. If your hiring budget for 2027 was built on today’s numbers, it’s already out of date.
Here’s exactly what changed, why renewals carry more risk than new hires, and what to do about it now.
Key Takeaways
From 1 January 2027, the EP salary floor for new applicants rises from S$5,600 to S$6,000/month (S$6,200 to S$6,600 in financial services), with age-adjusted bands rising in tandem up to S$11,500 (S$12,700 financial services) at 45 and above.
Renewals aren’t caught immediately — passes expiring from 1 January 2028 must meet the new thresholds; passes expiring before that date renew under current rules.
The S Pass minimum rises in parallel, from S$3,300 to S$3,600 (S$3,800 to S$4,000 financial services), on the same 2027/2028 timeline.
The Local Qualifying Salary (LQS) — the minimum local wage needed for a Singaporean employee to count toward S Pass/Work Permit quota — rises from S$1,600 to S$1,800 from 1 July 2026, ahead of the EP/S Pass changes.
COMPASS salary benchmarks reset annually and independently of this Budget 2026 change — meaning an EP holder’s score can weaken even without any change to the headline thresholds.
The single biggest planning mistake is treating this as a 2027 problem; salary bands, renewal calendars, and budget models should be reviewed now, in 2026.
Announcing the update on 12 February 2026, Prime Minister Lawrence Wong framed the increase as a way to maintain the quality of the foreign workforce as local wages rise, while keeping Singaporeans at the centre of the labour market. The changes affect Employment Pass and S Pass qualifying salaries, the Local Qualifying Salary used in S Pass/Work Permit quota calculations, and — further out — Work Permit levies from 2028.
This is a distinct announcement from the COMPASS benchmark and Shortage Occupation List updates that took effect on 1 January 2026 for new applications and 1 July 2026 for renewals. Employers dealing with both changes at once should treat them as two separate compliance tracks: COMPASS scoring is already live and resetting annually; the 2027 salary floor is a fixed policy change with a clear runway.
Pass Type / Metric | Current | From 2027 (new applications) | Renewals affected from |
EP — all sectors (except financial services) | S$5,600/month | S$6,000/month | 1 Jan 2028 |
EP — financial services | S$6,200/month | S$6,600/month | 1 Jan 2028 |
EP — age 45+ (all sectors) | S$10,700/month | S$11,500/month | 1 Jan 2028 |
EP — age 45+ (financial services) | S$11,800/month | S$12,700/month | 1 Jan 2028 |
S Pass — all sectors (except financial services) | S$3,300/month | S$3,600/month | 1 Jan 2028 |
S Pass — financial services | S$3,800/month | S$4,000/month | 1 Jan 2028 |
Local Qualifying Salary (LQS) | S$1,600/month | S$1,800/month | Effective 1 Jul 2026 |
Note the LQS change lands first, well ahead of the EP and S Pass thresholds — and it works differently. It doesn’t affect what you pay foreign hires; it affects how many local employees count toward your S Pass/Work Permit quota. Local staff paid below the new S$1,800 floor may only count as 0.5 of a headcount (or not at all) toward your quota from July 2026, which can quietly shrink your room for foreign hiring even before the EP number changes.
It’s tempting to read “effective January 2027” and file this under next year’s problem. That undersells the risk in two ways.
First, renewals have their own clock. The higher thresholds apply to renewals of passes expiring from 1 January 2028 — which means renewal applications filed in late 2027 for passes expiring in early 2028 are assessed against the new floor, not the old one. If you have EP or S Pass holders whose passes expire in the first half of 2028, the salary conversation needs to happen well before the renewal window opens, not when it does.
Second, COMPASS benchmarks move independently — and more often. Separate from this Budget 2026 salary floor, MOM resets the COMPASS C1 salary benchmark annually based on updated local PMET wage data. The January 2026 reset raised most sector benchmarks by roughly 5%, with some sectors — fund management in particular — seeing steeper increases. An EP holder whose pay comfortably cleared the 65th percentile benchmark in 2023 or 2024 may, under the refreshed 2026 tables, already be scoring fewer COMPASS points without any change to their actual salary. Stack that against the 2027/2028 salary floor increase, and a pass that looked secure eighteen months ago can be a genuine renewal risk today.
Practical takeaway: don’t treat “2027” and “2028” as the only dates that matter. Run a COMPASS re-score against current benchmarks for every EP holder renewing in 2026 and 2027 as a separate exercise from the salary-floor planning below.
Period | Focus |
Now – mid-2026 | Build the EP/S Pass register; re-score current holders against 2026 COMPASS benchmarks; confirm local staff clear the new S$1,800 LQS ahead of 1 July 2026 |
Mid–late 2026 | Redesign salary bands; budget 2027 hiring and renewal costs; align HR, finance, and payroll on the numbers |
Late 2026 – early 2027 | Implement salary adjustments for 2027 new-hire budgets; update contracts and job descriptions where needed |
2027 | Monitor new EP/S Pass applications against the new floor; continue staged adjustments for 2028 renewals |
2028 | Renewals of passes expiring from 1 January meet the new thresholds; Work Permit levy adjustments also take effect |
The Budget 2026 announcement gives employers a genuine runway — the changes don’t bite until 2027 for new hires and 2028 for renewals — but that runway is only useful if it’s used for planning rather than waiting. Building your EP register, re-scoring current holders against this year’s COMPASS benchmarks, and redesigning salary bands now avoids a compressed, reactive budget conversation later.
If you manage a mix of local and foreign hires in Singapore, this is a good moment to review your payroll and HR advisory setup alongside your EP and S Pass register, so salary structuring and renewal timing stay aligned. Our guide to Singapore’s S Pass framework covers the parallel changes for mid-skilled foreign hires in more detail.
If you’d like help mapping your EP and S Pass exposure ahead of the 2027 and 2028 deadlines, get in touch with our team for a review of your specific situation.
From 1 January 2027 for new applications. Renewals aren’t affected until passes expire from 1 January 2028 onward.
No — existing EP holders continue under current thresholds until their next renewal. If that renewal falls on or after 1 January 2028, the higher salary floor applies at that point.
Not structurally — the 40-point threshold remains. But COMPASS salary benchmarks reset annually and are separate from this Budget 2026 change, so an EP holder’s score can shift even without any change to the fixed salary floor itself.
Potentially, yes. The LQS increase (to S$1,800 from July 2026) affects how many of your local employees count toward your S Pass/Work Permit quota, which can indirectly affect your overall foreign hiring capacity even if you don’t hold any S Pass staff yourself.
It depends on the role’s genuine market salary and seniority. The S Pass carries quota limits and a monthly levy that the EP doesn’t, so the decision should be based on total cost and role fit — not simply which pass type is cheaper to clear on salary alone.
Waiting until a renewal is due to check the numbers. Because COMPASS benchmarks move annually and the salary floor moves again in 2027/2028, a pass that looked secure a year ago may not be secure today — checking only at renewal time removes your ability to plan a staged, non-disruptive adjustment.
