The foreign worker levy is a government-mandated fee employers are required to pay when they hire a foreign worker. The goal of these fees is to promote the advancement of local talent, rather than looking for talent abroad.
The amount that needs to be paid for these fees will vary, depending on factors like:
- Employment duration
- Local regulations
- Industry
- Exchange rates
- Nationality
- Quotas and limitations
Overall, companies that hire foreign employees need to keep track of these levies and understand the costs and requirements behind them. Failure to do so can result in fees and penalties, putting a damper on any growth plans.
Different types of foreign worker levies
Work permit levy: A fee that must be paid for each foreign employee, covering the cost of processing the work permit.
Quota levy: Employers must pay this fine when the number of foreign workers they’ve hired is over a quota set by the government.
Skills development levy: Employers are required to pay this fee to promote local skills and education programs as a way to even out the fact that they’ve hired talent from abroad, rather than turning to local candidates.
Sector-specific levy: These levies are for sectors that are more prone to rely on foreign labor, like construction and hospitality.
Time-based levy: This fee is calculated based on how long the foreign worker has been under employment.
Managing foreign worker levies with a payment execution platform
A company hiring from different countries may face multiple levies that need processing. A strong global payment execution platform can ease the strain, offering expertise in foreign worker levies in multiple jurisdictions, staying up to date with changing requirements, monitoring and auditing global payroll operations, and offering compliance management features.
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