What is the Foreign Worker Levy?

The Foreign Worker Levy is a mandatory fee imposed by governments on employers when they hire foreign workers. The primary objective of these levies is to encourage the employment of local talent rather than seeking talent from abroad.

What factors determine the amount of the levy?

The specific amount of the levy can vary based on several factors, including:

• Employment Duration: The duration for which the foreign worker is employed.
• Local Regulations: The regulations set by the local government or relevant authorities.
• Industry: Different industries may have varying levy requirements.
• Exchange Rates: Fluctuations in exchange rates can impact the levy amount, especially in international hires.
• Nationality: The nationality of the foreign worker may influence the levy amount.
• Quotas and Limitations: Governments may impose quotas or limitations on the number of foreign workers a company can hire.

What are the different types of foreign worker levies?

• Work Permit Levy: This fee covers the cost of processing the work permit for each foreign employee.
• Quota Levy: Employers are required to pay this fine when the number of foreign workers they've hired exceeds a government-set quota.
• Skills Development Levy: Employers must pay this fee to support local skills and education programs, offsetting the hiring of foreign talent.
• Sector-Specific Levy: Certain industries, such as construction and hospitality, may have specific levies due to their reliance on foreign labour.
• Time-Based Levy: This fee is calculated based on the length of time a foreign worker has been employed by the company.

Why is it essential to manage foreign worker levies?

Managing foreign worker levies is crucial for companies hiring foreign employees. Failure to comply with levy requirements can result in penalties and fees, which can impede a company's growth plans and financial stability.

How can a payment execution platform help manage foreign worker levies?

A robust global payment execution platform can simplify the process of managing foreign worker levies for companies hiring from different countries. It offers the following benefits:

• Expertise in Multiple Jurisdictions: The platform understands foreign worker levy requirements in various regions.
• Compliance Management: It helps companies stay compliant with changing levy regulations.
• Monitoring and Auditing: The platform allows monitoring and auditing of global payroll operations, ensuring accuracy and compliance.
• Up-to-date Information: It keeps users informed about the latest levy requirements and changes.
• Managing foreign worker levies with a payment execution platform streamlines the process, reduces compliance risks, and ensures that companies can focus on their core business activities while meeting regulatory obligations.