If you employ workers on S Passes, your levy billing changed on 1 January 2026 — and there is a reasonable chance nobody on your team has noticed yet.
The Ministry of Manpower harmonised the S Pass levy to a flat rate of $650 per month, removing the previous two-tier structure entirely. Under the old system, S Pass holders were classified as either basic tier or higher tier, with different levy rates applying to each. That classification no longer exists. Every S Pass holder now carries the same monthly levy cost.
Why the S Pass levy structure changed
The two-tier system was designed to encourage companies to hire proportionally more local workers before bringing in S Pass holders. As the local workforce pipeline has developed and the government has shifted towards a merit-based assessment approach, the tiered structure became administratively cumbersome relative to its purpose. A flat rate is simpler to administer and easier for employers to forecast.
The practical impact
The impact depends entirely on which tier your S Pass holders were classified under before 1 January.
If they were on the basic tier, your levy costs have increased. The basic tier rate was lower than $650, meaning you are now paying more per pass holder each month. If they were on the higher tier, the change may be broadly neutral or marginally positive.
Either way, the first thing to do is pull your January MOM levy invoice and compare it against December. The per-pass-holder amount should now be uniform at $650. If the numbers do not look right — or if you are not sure what they should look like — that is a gap worth closing.
The broader issue this surfaces
For most businesses, S Pass levy is a line item that gets paid without much scrutiny. Someone receives the invoice, it gets approved, it gets paid. This is completely understandable — levy billing rarely changes, and there are usually more pressing things to focus on.
The problem is that when it does change — as it has now — there is no automatic alert telling you that your January bill should look different from your December bill. A few hundred dollars per month per pass holder, multiplied across a meaningful S Pass headcount and left unreconciled for a year, adds up to real money.
What to do now
Log in to your MOM account. Check your January levy billing. Confirm the rate per S Pass holder is $650. If anything looks inconsistent, contact MOM directly to resolve it. And take this as a prompt to put a simple process in place so that levy billing gets a quarterly review — not just when something changes.
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Singapore HR Risk Watch monitors Singapore’s employment law and regulatory landscape and publishes alerts within 48 hours of significant changes. This post is informational and does not constitute legal advice.
