Singapore’s economy thrives on a blend of local and foreign talent, with the Employment Pass (EP) serving as the primary route for hiring skilled professionals, managers, executives, and technicians (PMETs) from overseas. For small and medium enterprises (SMEs), which often operate with lean teams and tight budgets, the EP is a vital tool for filling critical skill gaps in sectors like tech, finance, and manufacturing. However, the Ministry of Manpower (MOM) continuously calibrates its policies to ensure foreign talent complements, rather than competes with, the local workforce.
To stay competitive, SMEs must stay ahead of these regulatory shifts. This article breaks down the key changes taking effect in 2026 and its impact on SMEs.
The New Salary Thresholds (Effective January 2027)[1]
The most immediate change for SMEs is the revised minimum qualifying salary for the Employment Pass. From 1 January 2027, new EP applicants outside the financial services sector must meet a minimum qualifying salary of S$6,000, up from S$5,600 in 2025 (with an intermediate step to S$5,800 in 2026). For the financial services sector, which commands higher remuneration, the threshold rises from S$6,200 to S$6,600.
Crucially, these increases are not uniform across all age groups. Reflecting the expectation that older, more experienced professionals should command higher salaries, the qualifying salaries scale progressively with age. For EP holders aged 45 and above outside financial services, the minimum rises to S$12,700 (up from S$11,800), while their counterparts in financial services must earn at least S$12,700
EP Minimum Salary Benchmarks at a Glance
Role Category | Earlier Thresholds | New Thresholds |
|---|---|---|
Non-Financial Sector (Young Graduate) | S$5,600/month | S$6,000/month |
Financial Services Sector (Young Graduate) | S$6,200/month | S$6,600/month |
(Mid-40s) | ~S$10,700 - $11,800/month | ~S$11,500 - S$12,700/month |
S Pass (General Sectors) | S$3,300/month | S$3,600/month (from January 2027) |
S Pass (Financial Sectors) | S$3,800/month | S$4,000/month (from January 2027) |
COMPASS Framework Updates[2]
While salary thresholds make headlines, the COMPASS (Complementarity Assessment Framework) is the real gatekeeper. All EP applications must score at least 40 points across six criteria. Since 1 January 2026, MOM has applied updated rules that place greater weight on business substance, fair hiring practices, and genuine role seniority.[3]
Key changes include:
C1-Salary Benchmarks: Applications must meet revised sector-specific salary benchmarks to obtain points under C1. The criterion awards 10 points at the 65th percentile and 20 points at the 90th percentile of local PMET salaries.[4]
C2-Qualifications lists: MOM has updated its list of recognised universities and qualifications, now categorised into Group A and Group B institutions (worth 20 points) and professional qualifications (worth 10 points). The list of qualifying degree-equivalent credentials has been expanded, particularly in technical, engineering, hospitality, and applied science fields aligned to international qualification frameworks.
C5-Shortage Occupation List (SOL): MOM has revised the SOL, which provides up to 20 bonus points under the Skills Bonus criterion. Eligible roles in certain technology fields may also qualify for a five-year EP validity. The updated SOL adds healthcare-related roles while removing Cyber Risk Specialist, Cybersecurity Operations Specialist, and Product Manager (Digital).[5]
Conclusion
These reforms are not designed to block SMEs from global talent; they raise the quality bar so foreign hires genuinely complement local teams. However, SMEs with tight margins may face higher salary costs and stricter scrutiny on role design and hiring processes. Singapore’s EP and S Pass reforms continue the long-term goal of building a high-quality, competitive workforce. By staying proactive, integrating compliance into business planning, investing in local talent development, and approaching each application with the same rigour MOM applies, SMEs can continue to access the global talent they need to grow.
https://www.businesstimes.com.sg/singapore/budget-2026-smes-unlikely-face-sharp-cost-increases-ep-s-pass-salary-hikes-offshoring-interest-may?ref=home-top-stories-2 ↑
https://newlandchase.com/compass-updates-revised-qualification-lists-shortage-occupation-list/#:~:text=Singapore's%20Ministry%20of%20Manpower%20(MOM,(EP)%20applications%20are%20scored. ↑
https://www.paulhypepage.com/guides/how-will-the-updated-compass-framework-from-1-january-2026-change-singapore-employment-pass-approvals-for-smes/#audit-form ↑
https://www.mom.gov.sg/passes-and-permits/employment-pass/eligibility/compass-c1-salary-benchmarks ↑
https://www.mom.gov.sg/passes-and-permits/employment-pass/eligibility/compass-c5-skills-bonus-shortage-occupation-list-sol ↑