Budget 2026: Local qualifying salary to rise to S$1,800 for full-time employees this year
The Progressive Wage Credit Scheme and Workfare Skills Support schemes will also be enhanced
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[SINGAPORE] The local qualifying salary (LQS) for full-time employees will be raised to S$1,800 from Jul 1 this year, from S$1,600 previously, Minister for Finance Lawrence Wong announced during his Budget speech on Thursday (Feb 12).
The LQS sets the minimum salary that local employees must be paid in firms that hire foreign workers.
To hire foreign workers such as Work Permit, S Pass or Employment Pass holders, firms must pay Progressive Wage Model (PWMs) wages to local employees in the covered sectors and occupations, and pay all local employees not covered under PWMs at least the LQS.
This means that firms hiring foreign workers must pay full-time local employees at least S$1,800 per month to meet the requirements for hiring foreign workers. Part-time local workers must be paid at least S$10.50 per hour.
Foreign worker quotas will be adjusted accordingly.
Each local worker paid at least S$1,800 monthly will be recorded as one local workforce count; those paid at least S$900 but less than S$1,800 monthly will be half a local workforce count. Local workers earning less than S$900 per month will not count towards firms’ quota entitlement.
The LQS was last raised to S$1,600 from S$1,400 in 2024.
To help defray some of the cost, the government will enhance the Progressive Wage Credit Scheme (PWCS). Co-funding support for 2026 will rise to 30 per cent, from 20 per cent.
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The PWCS was previously enhanced at Budget 2025, with funding support for 2025 raised to 40 per cent from 30 per cent; and to 20 per cent from 15 per cent for 2026.
The scheme will also be extended for two additional years, to 2028. The government will raise the minimum wage increase needed to qualify for PWCS support to S$200 from 2027, from S$100 currently.
“This will better encourage and reward the firms that invest in their workers,” PM Wong said.
These measures to uplift lower-wage workers build on the PWM, which links pay increases to skills, productivity and career progression, he noted, adding that the government will continue to strengthen training support under the PWM.
Recalling the additional support under the Workfare Skills Support for workers taking up long-form training courses last year, he also announced enhancements to the basic tier of the scheme, and increased the hourly allowance for workers who upgrade their skills.
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