In Singapore, the foreign worker levy (FWL) is a fee that employers are required to pay for hiring foreign workers, such as work permit and S Pass holders. This levy varies depending on the worker’s skill level, industry, and other factors. However, there are certain circumstances under which employers may be eligible to apply for the levy waiver. This article offers guide to foreign worker levy waiver calculation and how to get a waiver for your foreign worker.
What is a Foreign Worker Levy Waiver in Singapore?
A foreign worker levy waiver is a temporary exemption from the foreign worker levy for specific reasons. The waiver is granted under conditions such as when a worker is on overseas leave, hospitalized, or otherwise absent for a defined period. This waiver helps businesses avoid paying the foreign worker levy during the waiver period, reducing the financial impact of having workers who are unable to perform their duties. The levy rate and waiver duration depend on the specific situation and eligibility requirements.
How to Apply for Levy Waiver on Foreign Workers?
To apply for a waiver for a foreign worker in Singapore, employers must follow the proper steps to ensure eligibility and submit the required application to the Ministry of Manpower (MOM).
Step 1: Ensure Eligibility for the Foreign Worker Levy Waiver
Before submitting a levy waiver application, employers must ensure that their worker meets the necessary criteria for the waiver.
Common reasons that qualify a worker for the waiver include:
Overseas Leave: The worker is on overseas leave for at least 7 consecutive days.
Hospitalization Leave: The worker is issued with hospitalization leave by local medical institution.
Custody by Authorities: The worker is in police or embassy custody.
National Service: The worker is a Malaysian serving National Service in home country.
Deceased Worker: If the worker passes away.
Each of these scenarios requires specific documentation, such as medical certificates, a death certificate, or official letters from the relevant authorities, to support the waiver application.
Step 2: Ensure Submission of Levy Waiver Application on Time
Employers must submit the application for the levy waiver within one year from the date of the levy bill. The application can only be submitted starting the 1st of the following month after the issuance of the levy bill. Late submissions may result in the rejection of the waiver request.
Step 3: Log into the Ministry of Manpower’s FWL eServices
To start the levy waiver application process, employers need to log into the Check and pay foreign worker levy using CorpPass. This is the official eServices by MOM to allow employers view the levy bills, breakdown adjustment, arrangement for levy payment, and request for waiver or refund.
Step 4: Complete the Levy Waiver Application Form
Once logged in, employers must fill out the levy waiver application form, which includes:
The worker’s Work Permit number.
The reason for the waiver (e.g., hospitalization, overseas leave).
The dates for which the waiver is requested.
Ensure that the application form is completed accurately to avoid delays.
Step 5: Attach the Required Supporting Documents
Employers must submit the appropriate supporting documents based on the reason for the levy waiver request.
The documentation may include:
Overseas Leave: No additional documents are required unless the worker has not returned.
Hospitalization Leave: A medical certificate from a Singapore-registered doctor.
Custody by Authorities: A letter from the police or embassy confirming the worker’s custody.
Deceased Worker: A copy of the death certificate.
Submitting the necessary documents ensures that the waiver is processed without delay.
Step 6: Wait until the Levy Waiver is Approved
After the waiver application is submitted, the Ministry of Manpower (MOM) typically processes the levy waiver within 12 working days. Employers will be notified of the waiver application status.
Step 7: Apply for a Refund If Necessary
If the waiver period requested is approved, the waived amount will be credited to the employer’s levy account. This amount can be used to offset future levy bills. If there are no upcoming levies due, employers can apply for a refund through the FWL eServices, which will be processed and credited to the employer's bank account.
How to Calculate the Waiver Amount
To calculate the waiver amount, employers need to know the monthly levy for the worker and the number of consecutive days the worker is absent.
For example:
Scenario: A worker has levy rate of $14.80/day or $450/month. He went on overseas leave and is consecutively absent for 14 out of 30 days of the month.
16 Days are Payable for Levy: 16 days × $14.80 = $236.80
Amount Waived: $450 (full levy) - $236.80 (payable) = $213.20 waived.
Managing the Costs on Foreign Workers
Understanding the levy waiver and its calculations is crucial for businesses to manage the costs of employing foreign workers. By following the correct steps to apply for waiver, employers can reduce their foreign worker levy cost if there is worker under the qualifying conditions. Once the application is approved, the employer can use the waived amount to offset the next levy bills or apply for a refund if there are no upcoming levy payments.
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