Valuation for Financial Reporting in Singapore: Audit & SFRS Requirements Explained
Since September 2023, getting an Employment Pass in Singapore is no longer just about meeting a minimum salary.
Most applications are now assessed under COMPASS — the Complementarity Assessment Framework — a structured points-based system introduced by MOM.
COMPASS evaluates both the candidate’s individual profile and the hiring company’s workforce composition.
This dual assessment means that two candidates with identical qualifications and salaries can receive different outcomes depending on who is sponsoring them.
For HR managers and business owners, understanding COMPASS is therefore as much about knowing your company’s workforce profile as it is about the candidate.
This guide explains how COMPASS works, how each criterion is scored, what triggers rejections, and how employer of record services interact with COMPASS compliance.
What Is COMPASS and Why Was It Introduced?
COMPASS stands for the Complementarity Assessment Framework, a points-based eligibility system used by Singapore’s Ministry of Manpower (MOM) to assess Employment Pass applications.
It was introduced to move beyond simple salary thresholds and evaluate whether a foreign hire genuinely complements Singapore’s local workforce.
The framework reflects two of Singapore’s core workforce policy goals:
- Ensuring foreign professionals bring skills and value that are not easily sourced locally.
- Encouraging companies to maintain diverse, balanced workforces that include strong local PMET representation.
According to RSM Stone Forest, the system evaluates an applicant’s overall profile, and only those who meet the required threshold will be considered for an EP.
COMPASS also introduced greater transparency — companies can now model their scores before applying and identify weaknesses in advance.
The Two-Stage Employment Pass Eligibility Framework
All EP applications must clear a two-stage eligibility framework before MOM will issue a pass.
Stage 1: EP Qualifying Salary
The candidate must earn at least the EP qualifying salary for their age group and sector.
For 2026, the minimum is S$5,600/month for non-financial services and S$6,200/month for financial services,
rising progressively with age to S$10,700 and S$11,800 respectively at age 45 and above.
Candidates who fail Stage 1 cannot proceed to COMPASS, regardless of how many points they would have scored.
Stage 2: COMPASS
Unless exempt, the candidate must score at least 40 points across the COMPASS criteria.
It is important to note that scoring 40 points does not guarantee approval — it is the minimum threshold for MOM to consider the application.
MOM retains discretion over the final outcome and may consider additional factors such as commercial credibility of the role and the employer’s standing.
How the COMPASS Scoring System Works
Scoring Tiers: 0, 10, and 20 Points
Each COMPASS criterion is scored on one of three tiers:
- 20 points: exceeds expectations.
- 10 points: meets expectations.
- 0 points: does not meet expectations.
The four foundational criteria can each award up to 20 points, for a maximum of 80 foundational points.
Two bonus criteria — the Skills Bonus and Strategic Economic Priorities Bonus — can add up to 30 additional points.
A minimum total of 40 points from any combination of criteria is required to pass.
The Six COMPASS Criteria at a Glance
| Criterion | What It Assesses | Points Available | Type |
|---|---|---|---|
| C1: Salary | Candidate salary vs local PMET sector benchmarks by age | 0 / 10 / 20 | Foundational |
| C2: Qualifications | Academic credentials from top-tier or recognised institutions | 0 / 10 / 20 | Foundational |
| C3: Diversity | Candidate nationality share among firm’s PMETs | 0 / 10 / 20 | Foundational |
| C4: Local Employment | Firm’s local PMET share vs sector average | 0 / 10 / 20 | Foundational |
| C5: Skills Bonus | Role on MOM’s Shortage Occupation List (SOL) | Up to 20 (bonus) | Bonus |
| C6: SEP Bonus | Firm enrolled in strategic economic priorities programme | Up to 10 (bonus) | Bonus |
The key insight is that COMPASS allows criteria to offset each other.
A candidate who scores 0 on salary can still pass if they score strongly on diversity, qualifications, and local employment support.
This flexibility is intentional — MOM designed the system to assess overall complementarity, not to penalise a single weak score.
The Four Foundational Criteria in Depth
C1: Salary Competitiveness
C1 benchmarks the candidate’s proposed salary against the salaries of local PMETs in the same sector, by age group.
This is separate from Stage 1’s minimum qualifying salary — C1 is about how competitive the salary is relative to sector peers.
- At or above 90th percentile of local PMET salaries in the sector: 20 points.
- 65th to below 90th percentile: 10 points.
- Below 65th percentile: 0 points.
Salary must also align with the seniority of the role and the company’s commercial activities.
A high salary that does not match the declared job scope can still attract scrutiny during assessment.
C2: Qualifications
C2 awards points based on the prestige and recognition of the candidate’s academic credentials.
- Degree from a top-tier institution (top 100 QS World University Rankings, Singapore Autonomous Universities, or sector-endorsed): 20 points.
- Other degree-equivalent qualifications: 10 points.
- No degree-equivalent qualification: 0 points.
Candidates without a degree can still pass COMPASS if they score sufficiently on other criteria.
Where qualification points are claimed, verification is mandatory.
All post-secondary diplomas and higher qualifications must be verified by an MOM-approved third-party background screening agency before the EP application is submitted.
Verification typically takes 1 to 2 weeks. Employers should plan for this lead time and obtain the verification number before filing.
C3: Workforce Nationality Diversity
C3 rewards applications where the candidate’s nationality is underrepresented in the hiring firm’s PMET workforce.
- Candidate’s nationality makes up less than 5% of the firm’s PMETs: 20 points.
- 5% to below 25%: 10 points.
- 25% or more: 0 points.
For firms with fewer than 25 PMET employees, a default score of 10 points applies.
This criterion directly ties EP outcomes to the firm’s existing hiring patterns.
Companies that have concentrated hiring from a single nationality will find it harder to obtain EPs for more candidates of that same nationality.
C4: Support for Local PMET Employment
C4 assesses the firm’s commitment to local talent by comparing its local PMET share to its sector peers.
- Local PMET share at or above the 50th percentile of the sector: 20 points.
- 20th to below 50th percentile: 10 points.
- Below 20th percentile: 0 points.
Firms with fewer than 25 PMETs receive 10 points by default.
Firms with a local PMET share of at least 70% always score at least 10 points, regardless of sector standing.
This criterion means that companies building heavily foreign-dominated teams may face increasing difficulty sponsoring additional EP holders over time.
Bonus Criteria That Can Tip Your COMPASS Score
C5: Skills Bonus — Shortage Occupation List (SOL)
The SOL bonus is available when the role is listed on MOM’s Shortage Occupation List — occupations where Singapore faces a genuine local talent shortage.
- Role on SOL + candidate nationality comprises less than 1/3 of firm’s PMETs: 20 points.
- Role on SOL + candidate nationality comprises 1/3 or more of firm’s PMETs: 10 points.
To claim SOL bonus points, the candidate must perform the specific job duties listed for the shortage occupation.
If the SOL bonus was needed to pass COMPASS, the EP holder can only work in that specific occupation — redeployment requires MOM notification and reassessment.
C6: Strategic Economic Priorities Bonus
The SEP bonus rewards companies that are active partners in Singapore’s innovation and internationalisation ecosystem.
Eligible activities are endorsed by agencies such as EDB, Enterprise Singapore, or NTUC — 10 points.
The bonus is valid for up to 3 years and is subject to renewal, with the firm required to maintain at least 10 points each under C3 and C4 throughout.
Who Is Exempt from COMPASS?
Three categories of EP applicants are exempt from the COMPASS assessment entirely:
- High earners: candidates with a fixed monthly salary of at least S$22,500.
- Overseas intra-corporate transferees: senior staff transferred within a multinational company.
- Short-term roles: candidates filling a role for one month or less.
Exempted candidates must still meet the EP qualifying salary (Stage 1).
For most standard commercial hires, the exemption threshold of S$22,500 is significantly above market, meaning the vast majority of EP applications will go through COMPASS.
How to Check Your COMPASS Score Before Applying
MOM provides two key tools for employers to model their COMPASS position before submitting an application.
Self-Assessment Tool (SAT)
The SAT allows employers and employment agents to generate an indicative COMPASS score analysis before filing.
It considers the candidate’s salary, qualifications, job role, and the company’s workforce profile.
The SAT result is not binding — MOM’s formal assessment may differ — but it significantly reduces the risk of a preventable rejection.
Workforce Insights Tool
Available on the myMOM Portal, the Workforce Insights Tool shows employers their current C3 Diversity and C4 Local Employment scores,
along with sector benchmarking data for salary and non-monetary benefits.
Employers should run this tool before hiring to understand where they sit on the COMPASS matrix and whether a new hire will strengthen or weaken their scores.
Why Applications Fail COMPASS — Common Rejection Triggers
According to immigration advisory firm Transform Borders, most EP rejections occur from a combination of factors rather than a single issue.
Common rejection scenarios include:
- Salary meets the Stage 1 minimum but falls below the 65th percentile for the sector — scoring 0 on C1 while also scoring weakly on other criteria.
- Candidate has strong qualifications but the employer’s workforce profile scores 0 on both C3 and C4 due to high nationality concentration and low local PMET share.
- Newly incorporated company submitting an application before establishing sufficient operational evidence or commercial credibility.
- Application documentation fails to clearly explain the commercial rationale for hiring a foreign professional at that salary level.
- Qualification verification not completed before submission — missing verification number and proof causes the application to be incomplete.
For borderline applications, improvements often come from clarifying the role scope, aligning salary with market expectations, and strengthening documentation of the company’s operations.
How COMPASS Affects Employer of Record Services in Singapore
For overseas companies entering Singapore, Employer of Record (EOR) services have an important relationship with COMPASS.
Because C3 and C4 are assessed at the employer’s entity level, the EOR’s workforce profile — not the client’s — is what MOM evaluates for COMPASS purposes.
Understanding how this works in practice is critical when comparing EOR services vs in-house HR for global hiring.
A well-established EOR with a diverse, local-heavy PMET workforce will typically score better on C3 and C4 than a newly incorporated shell entity.
This can make the difference between an approved and a rejected EP application when the candidate’s own profile is borderline.
For a detailed explanation of how EOR arrangements work under Singapore work pass regulations, see Singapore EOR services and work pass compliance.
Companies considering EOR as a model should also understand the difference between payroll outsourcing and PEO services, and how PEO and EOR services are structured in Singapore.
Using EOR to Navigate COMPASS Strategically
Companies that lack the local workforce depth to score well on C4, or that already have high nationality concentration in their team, often find EOR arrangements advantageous.
The EOR acts as the MOM-compliant sponsoring employer while the client company retains operational control of the employee’s work.
For businesses looking to understand the full EOR model in Singapore, this guide to employer of record services covers eligibility, cost, and compliance considerations.
Those interested in payroll outsourcing alongside EOR arrangements can explore how payroll process outsourcing works.
For expert guidance on COMPASS, EP applications, and employer of record services in Singapore, visit TY Teoh Advisory.
Frequently Asked Questions
Q1: What is the minimum score needed to pass COMPASS for an Employment Pass in Singapore?
Candidates must score at least 40 points across the COMPASS criteria to pass Stage 2. Each of the four foundational criteria (salary, qualifications, diversity, local employment) can award 0, 10, or 20 points. Two bonus criteria can add up to 30 additional points. Scoring 40 points is a threshold, not a guarantee — MOM still retains discretion over final approval.
Q2: Can an EP application pass COMPASS without a university degree?
Yes. Candidates without a degree-equivalent qualification score 0 under C2, but can still reach 40 points through strong scores on salary (C1), diversity (C3), local employment (C4), or the SOL skills bonus (C5). Candidates with very high salaries relative to sector benchmarks often compensate for a weak qualifications score. If the salary exceeds S$22,500/month, the candidate is exempt from COMPASS entirely.
Q3: Does COMPASS assess the candidate or the employer?
Both. Two of the four foundational criteria — C3 Diversity and C4 Support for Local Employment — assess the sponsoring firm’s workforce composition, not the candidate. This means the same candidate can score differently depending on which company is sponsoring the EP. Companies with a homogeneous workforce or low local PMET share will find COMPASS outcomes harder to achieve.
Q4: When should qualification verification be done relative to the EP application?
Qualification verification must be completed before submitting the EP application. All post-secondary diplomas and higher qualifications require verification by an MOM-approved background screening agency. The process takes approximately 1 to 2 weeks. The verification number and a copy of the proof are mandatory fields in the EP application — applications submitted without them will be incomplete.
Q5: How do Employer of Record services affect COMPASS scoring?
Under an EOR arrangement, MOM assesses the EOR entity’s workforce profile for C3 and C4 criteria — not the overseas client company’s. A well-established EOR with a diverse team and strong local PMET representation will typically score better on these criteria than a newly incorporated entity would. This makes EOR an attractive option for companies whose own workforce composition would score weakly under COMPASS.
Conclusion
COMPASS has fundamentally changed what it means to plan an Employment Pass application in Singapore.
Salary and qualifications still matter — but the employer’s workforce profile now carries equal weight in determining the outcome.
Companies that understand their C3 and C4 scores before applying are in a much stronger position to anticipate results, address weaknesses, and time applications strategically.
For businesses expanding into Singapore without a local entity, EOR services offer a COMPASS-aware path to sponsor EP holders under an established, compliant employer structure.
The 2027 salary threshold increases are also on the horizon, adding further urgency to planning EP applications with a structured strategy.
For expert support on COMPASS assessment, Employment Pass applications, and employer of record services in Singapore, visit TY Teoh Advisory.
