Singapore Budget 2026 introduces significant enhancements to support lower-wage workers while helping employers manage the transition. The two major measures are:<\/p>\n
An increase in the Local Qualifying Salary (LQS)<\/strong><\/p>\n<\/li>\n Enhancements and extension of the Progressive Wage Credit Scheme (PWCS)<\/strong><\/p>\n<\/li>\n<\/ul>\n These changes will affect workforce planning, foreign worker quota calculations, and wage cost projections for many businesses.<\/p>\n The Local Qualifying Salary (LQS)<\/strong> determines:<\/p>\n Whether a local employee counts towards a company\u2019s foreign worker quota<\/strong><\/p>\n<\/li>\n The minimum salary that must be paid to local workers if the firm hires foreign employees<\/p>\n<\/li>\n<\/ul>\n From 1 July 2026<\/strong>:<\/p>\n Full-time local employees \u2192 $1,800 per month<\/strong> (previously $1,600)<\/em><\/p>\n<\/li>\n Part-time local employees \u2192 $10.50 per hour<\/strong><\/p>\n<\/li>\n<\/ul>\n This means that companies employing foreign workers must ensure their local employees meet these new salary thresholds.<\/p>\n With the new LQS:<\/p>\n This ensures firms cannot hire locals on token wages simply to increase their foreign worker quota entitlement.<\/p>\n The PWCS<\/strong> helps employers cope with higher wage costs when they raise salaries for lower-wage workers.<\/p>\n It was previously enhanced at Budget 2025, and Budget 2026 introduces further support.<\/p>\n For qualifying wage increases in 2026<\/strong>:<\/p>\n Co-funding increases from 20% \u2192 30%<\/strong><\/p>\n<\/li>\n<\/ul>\n This also applies to:<\/p>\n \u2714 Wage increases given in 2025 and sustained in 2026<\/strong><\/p>\n This provides immediate financial support for employers raising wages.<\/p>\n
\n1. Local Qualifying Salary (LQS) to Increase from 1 July 2026<\/h1>\n
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New LQS Levels<\/h2>\n
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\n2. Impact on Foreign Worker Quota Computation<\/h2>\n
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\n \nMonthly Salary of Local Worker<\/th>\n Local Workforce Count<\/th>\n<\/tr>\n<\/thead>\n \n At least $1,800<\/td>\n 1 count<\/td>\n<\/tr>\n \n $900 to < $1,800<\/td>\n 0.5 count<\/td>\n<\/tr>\n \n Below $900<\/td>\n Not counted<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n
\n3. Progressive Wage Credit Scheme (PWCS) Enhanced and Extended<\/h1>\n
\n4. Higher Government Co-Funding for Wage Increases in 2026<\/h2>\n
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