Local Qualifying Salary (LQS) 2026: What Singapore Employers Need to Know

Local Qualifying Salary (LQS) Increases to S$1,800: Why Business Owners Need to Pay Attention

From 1 July 2026, the Local Qualifying Salary (LQS) will increase from S$1,600 to S$1,800 for full-time local employees. While this may seem like a straightforward salary adjustment, it has much wider implications for businesses employing foreign workers.

For many SMEs, this change could affect their Work Permit and S Pass quota, hiring plans, and even the ability to renew existing work passes.

Understanding what the LQS is and staying updated with these changes is essential for every employer in Singapore.

What is the Local Qualifying Salary (LQS)?

The Local Qualifying Salary (LQS) is the minimum monthly salary a Singapore Citizen or Permanent Resident must earn before they are counted as a local employee for the purpose of calculating a company's foreign worker quota.

The objective is simple:

To ensure employers maintain a meaningful local workforce while allowing businesses to hire foreign employees where necessary.

The Ministry of Manpower (MOM) uses CPF contribution records to determine whether a local employee qualifies under the LQS.

New LQS from 1 July 2026

From 1 July 2026:

Monthly Salary	Counts as Local Employee
S$1,800 and above	1 Local Employee
S$900 to below S$1,800	0.5 Local Employee
Below S$900	Does not count

This means employees who were previously counted as one full local employee may now only count as half if their salaries remain between S$1,600 and S$1,799.

Why Does MOM Keep Increasing the LQS?

The LQS is not designed to make hiring more difficult.

Instead, it reflects Singapore's changing labour market.

As wages increase across the economy, the benchmark used to determine a genuine local employee also needs to move accordingly.

Over the years, Singapore has consistently raised the LQS to reflect:

• Wage growth

• Rising cost of living

• Stronger support for local employment

• Fair competition between local and foreign workforce

Rather than remaining a fixed figure, the LQS evolves alongside Singapore's economy.

How the LQS Has Changed Over the Years

Effective Date	Local Qualifying Salary
Before 2021	S$1,400
July 2021	S$1,400 (LQS framework formally introduced)
September 2022	S$1,500
July 2024	S$1,600
July 2026	S$1,800

The steady increases demonstrate a clear trend:

Businesses should expect workforce-related regulations to evolve over time instead of remaining static.

Why This Matters for Employers

Many employers assume that as long as they have local employees on payroll, their foreign worker quota remains unchanged.

Unfortunately, this isn't always the case.

Imagine your company employs two Singaporeans earning S$1,600 each.

Before July 2026:

• Employee A = 1 Local Employee

• Employee B = 1 Local Employee

Total = 2 Local Employees

After 1 July 2026:

• Employee A = 0.5 Local Employee

• Employee B = 0.5 Local Employee

Total = 1 Local Employee

Without hiring anyone new or letting anyone go, your recognised local workforce is effectively reduced for quota purposes.

This could impact your ability to:

• Apply for new Work Permits

• Renew existing Work Permits

• Apply for S Passes

• Maintain your current foreign workforce

CPF Contributions Matter Too

Another commonly overlooked point is timing.

MOM calculates your quota based on a rolling three-month average of CPF contribution records.

Late CPF submissions or incorrect salary declarations can temporarily reduce your recognised local workforce, even if your employees meet the salary requirements.

Good payroll administration is therefore just as important as paying the correct salary.

Staying Ahead of Regulatory Changes

The LQS is only one example of how employment regulations continue to evolve.

In recent years, businesses have also had to adapt to:

• COMPASS framework for Employment Pass applications

• Progressive increases in S Pass qualifying salaries

• Changes to foreign worker levies

• CPF contribution adjustments

• Fair employment guidelines

• New workforce and compliance requirements

For business owners, staying compliant isn't just about meeting today's rules—it's about anticipating tomorrow's changes before they affect your operations.

Being proactive gives you time to adjust your workforce planning, payroll budgets, and hiring strategy without disrupting your business.

How Account-Ink Can Help

At Account-Ink, we work closely with SMEs to help them stay ahead of regulatory changes.

Whether you're planning to hire foreign employees, renewing work passes, or reviewing your workforce structure, we can help you:

• Review your local headcount for quota purposes

• Assess your Work Permit and S Pass eligibility

• Advise on payroll and CPF compliance

• Support your work pass applications

• Keep your business updated on important MOM and ACRA changes

Compliance shouldn't be something you only think about when an application gets rejected.

With the right advice, you can plan ahead and avoid unnecessary disruptions.

Need Help Reviewing Your Workforce?

If you're unsure whether the new LQS affects your company, our team at Account-Ink can help you assess your current workforce structure and identify any potential issues before they impact your hiring plans.

A short review today could save weeks of delays on future Work Permit or S Pass applications.