Phantom Workers and Work Pass Fraud: Checks for Employers

"Phantom workers" are Singaporeans or permanent residents who receive CPF contributions from a company they do not actually work for, so that the company looks as if it employs more locals and can hire more foreign workers. The Ministry of Manpower (MOM) said on 16 October 2026 that seven employers and an administrative assistant were charged on 8 October for false declarations of this kind, and that two people were found guilty of paying Employment Pass holders far less than the salaries they had declared. Each false declaration carries a fine of up to S$20,000, up to two years' jail, or both, and MOM may bar those convicted from employing foreign workers.

Most employers will never go near a scheme like this. But your Work Permit and S Pass quota is calculated from your CPF records, so an honest firm still needs clean records: the right people on the CPF account, salaries declared on time and pay that matches what was declared. This guide explains how the count works, with a worked example, and gives a monthly check you can start this week.

How does MOM count local employees for the quota?

MOM's foreign worker quota page says the quota, or dependency ratio ceiling, is the maximum share of foreign workers in a company's total workforce: 35% in services, 60% in manufacturing, 75% for marine shipyards and 83.3% in construction and process. It uses information from your CPF account to compute the number of locals, and asks employers to declare paid salaries and CPF contributions "promptly and accurately".

MOM's booklet How to calculate your quota and levy bill (PDF), updated 1 July 2026, fills in the detail:

• Locals are Singaporean and PR staff under a contract of service, including the company's director. Owners of sole proprietorships and partnerships, and platform workers, are not counted.
• A local can count towards the quota of at most two companies, and you should not pay CPF and declare salary for the same employee under more than one CPF account to get more quota.
• The count is a three-month average. CPF data declared by the 14th of a month feeds the next month's quota; later declarations shift the window back by a month.
• Late or unpaid CPF can reduce your quota and push workers into higher levy tiers, and MOM may not count late contributions even after arrears are paid.
• Over quota, new applications and renewals may be rejected and you may have to cancel excess passes.

The S Pass quota page adds a sub-cap: S Pass holders can be at most 10% of total workforce in services and 15% in construction, manufacturing, marine shipyard and process. The S Pass levy is S$650 a month across sectors since 1 September 2025.

Worked example: a services firm's quota (illustrative)

A fictional catering company, run by Mr Tan, employs nine Singaporean and PR staff on at least S$1,800 a month and three local part-timers on S$900 to S$1,799.

1. Local count: 9 × 1 + 3 × 0.5 = 10.5.
2. Maximum Work Permit and S Pass holders: MOM's booklet gives the services formula as local count × 0.538462, rounded down: 10.5 × 0.538462 = 5.65, so five.
3. One part-timer paid S$850: below S$900 they count as zero, the local count falls to 10, and 10 × 0.538462 = 5.38, still five. A second change, such as one full-time local leaving, takes it to 9 × 0.538462 = 4.85, or four; if Mr Tan already holds five passes, one becomes excess.
4. Late CPF for one month: if that month's data is not counted, the three-month average can drop even though the staff are real.

The same booklet shows why the stakes differ by sector: in construction and process the formula is local count × 5, so each local on the books supports up to five migrant workers, while in services Mr Tan needs almost two genuine locals for each additional pass. The four people arrested on 2 September were from the construction sector.

What counts as a false declaration?

MOM's 16 October release names two unlawful practices: making CPF contributions to people who do not work for you in order to inflate the foreign worker quota, and submitting false salary or employment information in work pass applications. It also warns the public not to accept CPF contributions from employers they do not work for, since that may amount to abetment.

Genuine arrangements are not the problem. MOM's page on employer CPF contributions lists company directors, part-time staff and family members of the owner who receive wages "for work done" among those who need CPF. The test is whether the person actually works for you, under a contract of service, and is paid what you declare.

Salary is the other half. MOM's rules for notifying changes to an EP holder's details say you must tell MOM if you lower or raise a pass holder's salary, and submit a request at least one month before lowering it. Paying less than declared, as in the Ayurvedic centre case, is exactly what MOM prosecutes. Our guide to the Employment Pass salary rise in 2027 covers the qualifying salaries that apply from January.

A monthly check that keeps your quota honest

Run this each month before the 14th, when CPF data starts feeding next month's quota:

1. Export the names on your CPF submission and compare them with your staff list, rosters or timesheets and payslips. Every local on CPF should have work records and a payslip.
2. Check each local's monthly wage against the S$1,800 and S$900 thresholds and record the count you expect (1, 0.5 or 0).
3. Confirm no employee is declared under more than one of your CPF accounts, and that anyone shared with a related company counts for no more than two companies.
4. Check directors and family members on CPF have a contract of service and real duties.
5. For every work pass holder, compare the salary actually paid with the declared salary, and file a request with MOM at least a month before any reduction.
6. Pay CPF by the 14th, so the month counts.
7. Treat any offer of "local headcount" or quota from an agent or contact as a red flag and decline it (our advice; MOM's release shows both sides can be prosecuted).

If something does not reconcile, fix the records and take advice before your next work pass application. Anyone who knows of phantom-worker arrangements can use MOM's Report an infringement eService, which has a category for the use of locals as phantom workers and keeps the reporter's identity confidential.

A payroll provider or HR system that matches attendance to CPF makes this check much quicker; see our guides to comparing payroll providers and comparing HR software. More employer routines are under operations.

Common questions