What the Dependency Ratio Ceiling means

The DRC is the maximum share of your total workforce that can be foreign Work Permit and S Pass holders. It is MOM’s main lever for controlling foreign manpower density by sector. Two practical consequences follow. First, your quota is a ratio, not a fixed number: hire more locals at or above the Local Qualifying Salary and your foreign entitlement grows. Second, anything that reduces your counted local headcount, such as a local resignation or a salary falling below the LQS, shrinks your foreign quota in the same stroke.

Quota limits by sector

Sector	DRC	Notes
Construction	83.3%	5 Work Permit holders per local employee earning the LQS
Process	83.3%	Same construction-style ratio framework
Marine shipyard	75%	Sector in structural transition
Manufacturing	60%	Widest general-sector ceiling
Services	35%	The tightest ceiling and the broadest sector

Construction and process are measured differently from the rest: instead of a straight percentage, construction employers can hire 5 Work Permit holders for every local employee earning at least the Local Qualifying Salary, with sector-specific levy tiers by source region.

How MOM computes your quota

MOM does not count headcount on the day you apply. Your quota is calculated from the average number of local employees over the last three months, using your CPF contribution records, updated weekly. Three rules trip employers up:

• The LQS threshold decides who counts. A local employee must earn at least the Local Qualifying Salary, S$1,600 today, to count as one full worker. From 1 July 2026 the LQS rises to S$1,800, so staff between those two figures stop counting unless you raise pay.
• Late CPF filings distort the number. Late or inaccurate declarations can push your foreign workers into higher levy tiers, which is a cost penalty on top of a compliance problem.
• The levy bill follows the tiers. Where your workers sit inside the quota decides their tier. Our Work Permit levy budgeting guide for 2026 to 2028 maps the tiers and the 2028 changes.

The S Pass sub-quota and the PRC cap

Two caps sit inside the main DRC. S Pass holders can be at most 10 percent of your total workforce in services, and 15 percent in construction, manufacturing, marine shipyard and process. Separately, PRC Work Permit holders are capped at 8 percent of your total workforce in services and 25 percent in manufacturing. Employers blending nationalities need to track both numbers, because a sub-quota can block a hire even when overall quota headroom remains.

For Work Permit hires under the NTS Occupation List, there is a third layer: an 8 percent sub-DRC dedicated to NTS workers, independent of the numbers above. That route is explained in how the NTS Occupation List works.

Why the EP has no quota

The Employment Pass is deliberately quota-free. Policy controls EP hiring through quality gates instead: the minimum qualifying salary, currently S$5,600 and rising to S$6,000 from January 2027, plus the COMPASS points system that scores salary, qualifications, workforce diversity and local employment share. A firm can therefore hire any number of EP holders, but each one must clear a points threshold, and firms with a heavily foreign PMET mix find COMPASS progressively harder to pass.

A worked example

Take a services firm with 40 local employees earning at or above the LQS. At a 35 percent DRC, foreign workers can make up 35 percent of the total workforce, which works out to roughly 21 foreign hires (35 divided by 65 times 40). Inside that, S Pass holders can be at most 10 percent of the total workforce, about 6 of the 61 total staff. The firm could therefore plan around 15 Work Permit and 6 S Pass holders, and add as many EP hires as COMPASS allows. Every local resignation or below-LQS salary reduces those numbers at the next weekly update.

Planning your quota for 2027

Quota planning is now a payroll exercise as much as a hiring one. Before you commit to a 2027 headcount plan: compute your current three-month average local headcount, flag every local salary between S$1,600 and S$1,800 for review before July 2026, check your S Pass utilisation against the 10 or 15 percent cap, and model the 2028 levy structure on top. The salary floors side is covered in our guide to the 2027 EP and S Pass salary floors.

Corestaff’s consultants run these quota checks as part of every hiring plan through our foreign worker recruitment team, so entitlement is confirmed before sourcing starts. Request a quota and hiring check for your firm.

Frequently asked questions