The dependency ratio ceiling in Singapore, or DRC, is the maximum share of a company's total workforce that can be made up of Work Permit and S Pass holders. The exact cap depends on the sector: it is 35% for Services, 60% for Manufacturing, 75% for Marine Shipyard, and 83.3% for Construction and Process, per the Ministry of Manpower (MOM). Go over the ceiling and MOM will not approve any further Work Permit or S Pass applications until you hire more locals.
Sitting under the DRC is a tighter S Pass sub-DRC, which limits S Pass holders alone. The figure that decides both caps is your count of local employees, and a local only counts once they are paid at least the Local Qualifying Salary (LQS). Employment Pass (EP) holders sit outside this system entirely; they are not part of the DRC or any quota. This guide sets out the 2026 sector ceilings, the sub-DRC, how the LQS headcount works, and the levy that comes with each quota slot, all sourced from MOM.
Key Takeaways
- What it is: the dependency ratio ceiling in Singapore is the maximum percentage of a firm's total workforce that can be Work Permit plus S Pass holders.
- Sector ceilings (per MOM, 2026): Services 35%, Manufacturing 60%, Marine Shipyard 75%, Construction and Process 83.3%.
- S Pass sub-DRC: a tighter cap on S Pass holders alone - 10% of total workforce in Services and 15% in all other sectors.
- Local headcount drives the quota: a local counts fully if paid at least the LQS (S$1,600/month) and half if paid S$800 to below S$1,600; from 1 July 2026 these rise to S$1,800 and S$900.
- EP holders are exempt: Employment Pass holders are not subject to the DRC, the sub-DRC or any quota, and do not attract a levy.
- Levy applies too: a quota slot lets you hire, but each Work Permit or S Pass holder still attracts a monthly foreign worker levy. Confirm current sub-DRC and levy rates on MOM.
What the Dependency Ratio Ceiling Means
The DRC is MOM's main lever for keeping local workers as the core of a company's headcount. It does this by tying the number of Work Permit and S Pass holders a firm can employ to the number of locals it already hires. The more locals on the payroll, the more foreign workers the firm can bring in, up to the sector ceiling.
Read the ceiling as a share of the whole workforce, not a head-for-head ratio. In Services, where the DRC is 35%, Work Permit and S Pass holders together can make up at most 35% of total staff; the other 65% or more must be locals or EP holders. The cap is a hard limit: once a firm reaches it, MOM stops approving new Work Permit and S Pass applications until the local count grows.
Quota Versus Levy
Two separate things govern foreign hiring. The quota, set by the DRC, decides how many Work Permit and S Pass holders you may employ. The levy is a monthly fee you pay for each one you actually hire. Staying within quota does not waive the levy, and paying the levy does not raise your quota. Both apply at the same time.
DRC and S Pass Sub-DRC by Sector
The overall DRC caps Work Permit and S Pass holders combined. The S Pass sub-DRC is a tighter limit inside that ceiling for S Pass holders on their own, so a firm can hit its S Pass cap well before its overall DRC. The table below sets out both, using MOM figures current as of 2026.
| Sector | Overall DRC (Work Permit + S Pass) | S Pass sub-DRC |
|---|---|---|
| Services | 35% | 10% |
| Manufacturing | 60% | 15% |
| Marine Shipyard | 75% | 15% |
| Construction | 83.3% | 15% |
| Process | 83.3% | 15% |
A worked example: a Services firm with 100 local-equivalent staff can hire up to 35 Work Permit and S Pass holders combined, of which no more than 10 may be S Pass holders. A Manufacturing firm of the same size could hire up to 60 in total, with up to 15 on S Pass.
How the Manufacturing S Pass Sub-DRC Reached 15%
The Manufacturing S Pass sub-DRC was tightened in two steps. MOM cut it from 20% to 18% from 1 January 2022, then from 18% to 15% from 1 January 2023, where it now sits. Because sub-DRC figures are reviewed and changed from time to time, always confirm the current number for your sector on MOM before you plan headcount.
How Local Employees Count Toward the Quota
Your quota is calculated from your local workforce count, not just a raw headcount. A local employee is a Singapore citizen or permanent resident, and they only count once they are paid the Local Qualifying Salary. The LQS sets the wage a local must earn before MOM treats them as a genuine full-time member of the workforce for quota purposes.
| Local monthly salary | Counts as | Effect on quota |
|---|---|---|
| At least the LQS (S$1,600 as of 2026) | 1 local | Full local workforce count |
| S$800 to below S$1,600 | 0.5 local | Half local workforce count |
| Below S$800 | 0 | Does not count toward quota |
So two part-time locals each earning S$800 to under S$1,600 together count as one full local for quota. The larger your counted local workforce, the more Work Permit and S Pass slots the DRC and sub-DRC allow.
An Example of the Count in Practice
Suppose a Services firm employs 18 locals paid at or above the LQS and 4 locals paid between S$800 and just under S$1,600. The counted local workforce is 18 + (4 x 0.5) = 20. At a 35% DRC, total staff including Work Permit and S Pass holders is capped so those pass holders stay within 35% of the whole - roughly 10 to 11 slots on this base - with no more than the 10% S Pass sub-DRC on S Pass.
The Levy That Comes With Each Quota Slot
Filling a quota slot is only half the cost. For every Work Permit and S Pass holder you employ, you also pay MOM a monthly foreign worker levy. The levy is a pricing tool: rates generally rise as a firm leans more heavily on foreign labour, which nudges employers toward locals.
- S Pass levy: a flat S$650 a month across all sectors and levy tiers since 1 September 2025, per MOM.
- Work Permit levy: varies by sector, skill level and how close the firm is to its DRC - higher tiers cost more per worker.
- Daily levy: charged when a pass holder does not work a full calendar month, pro-rated from the monthly rate.
Levy rates are reviewed regularly, so treat any figure here as a guide and check the live rate on MOM before budgeting. The levy is payable in addition to salary and is separate from the quota itself.
Why Employment Pass Holders Are Different
A common planning mistake is to assume every foreign hire eats into the DRC. It does not. Employment Pass holders are not Work Permit or S Pass holders, so they fall completely outside the DRC, the S Pass sub-DRC and any quota. They also do not attract a foreign worker levy.
This makes the EP route useful for firms that have hit their DRC but still need to hire foreign professionals, managers and executives. The trade-off is that EP candidates face their own bar - a higher qualifying salary and the COMPASS points test - rather than a quota. For how the two passes compare, see our guides on EP versus S Pass and the Employment Pass and work visa service.
Planning Around the Ceiling
If your firm is near its DRC, there are a few practical moves before turning away talent. Catalyst Immigration reviews each company's pass mix against the live MOM ceilings and levy tiers.
- Grow the counted local workforce by paying more locals at or above the LQS, which lifts both the DRC and sub-DRC headroom.
- Shift suitable senior roles to the Employment Pass, which sits outside the quota, instead of S Pass.
- Track the S Pass sub-DRC separately - many firms hit the S Pass cap long before the overall DRC.
- Confirm the current sub-DRC and levy rate for your sector on MOM before committing to new hires.
What Is Changing
The biggest near-term change is to how locals are counted, not to the ceilings themselves. From 1 July 2026, MOM raises the LQS used for the quota count: a local will count fully only when paid at least S$1,800 a month (up from S$1,600), and the half count will apply to those paid S$900 to below S$1,800 (up from S$800).
In effect, some locals who count today at a lower wage will need a pay rise to keep counting fully, which can quietly shrink a firm's quota headroom even if the DRC percentage stays the same. The sector DRC and S Pass sub-DRC figures in this guide are current as of 2026, but MOM reviews them periodically. Check the live ceilings, sub-DRC and LQS on MOM before you plan hiring.
Frequently Asked Questions About the dependency ratio ceiling in Singapore
What is the dependency ratio ceiling in Singapore?
The dependency ratio ceiling (DRC) is the maximum percentage of a company's total workforce that can be Work Permit and S Pass holders combined. It is 35% for Services, 60% for Manufacturing, 75% for Marine Shipyard, and 83.3% for Construction and Process, per MOM as of 2026.
What is the S Pass sub-DRC?
The S Pass sub-DRC is a tighter cap inside the overall DRC that limits S Pass holders on their own. It is 10% of total workforce for Services firms and 15% for firms in Manufacturing, Marine Shipyard, Construction and Process, per MOM. A firm can reach its S Pass cap before its overall DRC.
How does the Local Qualifying Salary affect my quota?
A local employee counts fully toward your quota only if paid at least the Local Qualifying Salary, which is S$1,600 a month as of 2026, and counts as half if paid S$800 to below S$1,600. From 1 July 2026 these thresholds rise to S$1,800 and S$900. A larger counted local workforce allows more Work Permit and S Pass slots.
Are Employment Pass holders subject to the DRC?
No. Employment Pass holders are not Work Permit or S Pass holders, so they fall outside the dependency ratio ceiling, the S Pass sub-DRC and any quota, and they do not attract a foreign worker levy. They are assessed instead on the EP qualifying salary and the COMPASS points test.
Is the levy the same as the quota?
No. The quota, set by the DRC, decides how many Work Permit and S Pass holders you may hire, while the levy is a monthly fee paid for each one you actually employ. Both apply at the same time. The S Pass levy is S$650 a month across all sectors since 1 September 2025; Work Permit levies vary. Confirm current rates on MOM.
What happens if my firm exceeds the dependency ratio ceiling?
If your Work Permit and S Pass headcount exceeds the DRC for your sector, MOM will not approve further Work Permit or S Pass applications until you raise your counted local workforce back within the ceiling. Existing pass holders can usually serve out their passes, but renewals may be affected if you stay over the cap.
Official Sources and References
- MOM - Foreign worker quota and levy requirements
- MOM - S Pass quota and levy requirements
- MOM - How to count local employees for the quota
- MOM - Local Qualifying Salary
Explore Catalyst Immigration’s other services:
- Minimum Salary for Work Permit in Singapore 2026
- EP vs S Pass in Singapore
- Work Pass Application
- Getting a Work Pass Without a Degree in Singapore
- Employment Pass and Work Visa
Talk to Catalyst Immigration
Catalyst Immigration helps Singapore employers plan headcount against the live dependency ratio ceiling, the S Pass sub-DRC and the LQS count before they hire, so applications are not bounced for being over quota. We review your local workforce count, levy tiers and whether the Employment Pass is the better route, then guide the full work pass submission.