Definitive Guide to Hiring in Singapore

Hiring in Singapore

Hiring employees compliantly in Singapore means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Singapore so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Singapore; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Singapore

Employee Probation Period

• The Employment Act of Singapore does not have any clauses that specifies the probation period for employees.
• However, the standard practice in Singapore is to have a probation (assessment) period ranging between 3 and 6 months, to gauge the performance of the new employee.

Annual Leave in Singapore

• An employee is entitled to 12 days of annual leave.
• The employee takes 1 day of unpaid leave per month from January to April i.e., 4 days in total.
• The employee's pro-rated annual leave entitlement from 1 January to 30 April will be based on 3 completed months of service.

Holidays in Singapore

Workers are entitled to paid holidays during Festival (public and religious) holidays. These include memorial holidays and religious holidays (Christian origin).

Here is the full list of public holidays in Singapore:

Maternity Leave Singapore

• If the child is a Singapore citizen, the mother is entitled to 16 weeks of government-paid maternity leave.
• If the child is NOT a Singapore citizen, the mother is entitled to 12 weeks of maternity leave provided she is covered by the Employment Act.
• Only the first 8 weeks of maternity leave are paid by the government.

Paternity Leave Singapore

• All working dads, citizens, PRs and foreigners are eligible for two weeks of paid paternity leave as long as they meet the following requirements:
  • The baby is a Singapore citizen
  • The man has been married to a Singapore citizen between conception and birth

Sick Leave in Singapore

• Employees are generally entitled to sick leave if:
  • they have worked for the employer for at least three months
  • they have informed their employer within 48 hours of their absence
  • their sick leave is certified by the company’s doctor, a company-approved doctor, or a government doctor
• The number of days of paid sick leave is dependent on the length of service.
• Employees who have worked for at least six months are eligible for 14 days of outpatient, non-hospitalization leave and 60 days of hospitalization leave, which includes the 14 days of outpatient leave.

Working Hours in Singapore

• Working hours should not exceed 44 per week.
• Employees who work 5 or fewer days per week should not work more than 9 hours per day.
• Those who work 5 or more days per week should not work more than 8 hours per day.

Overtime in Singapore

• Overtime work is all work in excess of the normal hours of work (excluding breaks).
• You can claim overtime if you are:
  • A non-workman earning up to $2,600.
  • A workman earning up to $4,500.
• The overtime rate payable for non-workmen is capped at the salary level of $2,600, or an hourly rate of $13.60.
• For overtime work, your employer must pay you at least 1.5 times the hourly basic rate of pay.
• Payment must be made within 14 days after the last day of the salary period.

Termination of Employment in Singapore

• Either the employer or employee can terminate a contract of service. Termination may happen because:
  • You resign.
  • Your employer dismisses you.
  • The contract terms have expired, such as when a project or contract period is completed.
• If your contract specifies a notice period, you must either serve the notice when you resign or pay compensation in lieu of notice.
• Notice can be waived by mutual consent between you and your employer.
• If your employment contract didn’t specify the notice period, the notice period required will depend on your length of service.
• If your employment contract didn’t specify the notice period, the notice period required will depend on your length of service.
  • For employment period of less than 26 weeks, notice period is 1 day
  • For employment period of 26 weeks to less than 2 years, notice period is 1 week
  • For employment period of 2 years to less than 5 years, notice period is 2 weeks
  • For employment period of more than 5 years, notice period is 4 weeks
• The common practice in Singapore is to pay between 2 weeks' to one month's salary per year of service.
• An employee who has worked less than three years in a company is not entitled to retrenchment benefits under the Employment Act

Notice Period in Singapore

• If your contract specifies a notice period, you must either serve the notice when you resign or pay compensation in lieu of notice.
• Notice can be waived by mutual consent between you and your employer.
• If your employment contract didn’t specify the notice period, the notice period required will depend on your length of service.
  • For employment period of less than 26 weeks, notice period is 1 day
  • For employment period of 26 weeks to less than 2 years, notice period is 1 week
  • For employment period of 2 years to less than 5 years, notice period is 2 weeks
  • For employment period of more than 5 years, notice period is 4 weeks

Severance in Singapore

• The common practice in Singapore is to pay between 2 weeks' to one month's salary per year of service.
• An employee who has worked less than three years in a company is not entitled to retrenchment benefits under the Employment

Singapore Salary and Wages

13 / 14th Month Salary in Singapore

• Yes
• There is no statutory requirement to pay the 13th or the 14th month salary.
• However, it is common for employees to receive an end of year salary, which in good economic times could be two or three times their monthly salary.

• Central Provident Fund (CPF)
• The Central Provident Fund (CPF) is Singapore's national pension scheme.
• Contributions are payable to Singapore citizens and permanent residents only.
• Employers and employees contribute 17% and 20%, respectively, of ordinary monthly wages, up to an income ceiling of SGD 6,000.
• Their respective maximum contributions are therefore SGD 1,020 and SGD 1,200.
• The rates are applicable to employees aged 55 years and below.
• These rates also apply to additional wages (e.g. year-end bonus), up to a maximum contribution of:
  • the actual additional wages if the annual ordinary wages are not more than the ordinary wage ceiling of SGD 72,000 and the total wages are not more than the maximum contribution of SGD 102,000
  • the difference between the maximum contribution of SGD 102,000 and annual ordinary wages if the total wages exceed the maximum contribution of SGD 102,000 but the annual ordinary wages are not more than the ordinary wage ceiling of SGD 72,000, or
  • the lower of the difference between the maximum contribution and the ordinary wage ceiling (SGD 102,000 - SGD 72,000) or the actual additional wages if annual ordinary wages exceed the ordinary wage ceiling of SGD 72,000.
• Reduced rates apply for employees who are earning less than SGD 750 per month, as well as for those above 55 years of age, although these rates are being gradually increased.

Immigration Singapore

• Foreign nationals who intend to take up employment or to engage in a business, profession or occupation in Singapore must first apply for a work pass.
• A Singapore entity, which is normally the employer, must sponsor the work pass application.

Work permit

• A work permit (WP) may be granted to a skilled or unskilled foreign worker who holds qualifications and experience relevant to the position.
• WPs are granted for up to two years at a time and are renewable (maximum employment period in Singapore may apply).
• WPs are subject to sourcing and quota restrictions, and employers are subject to monthly levies for each WP holder employed.

Personalized employment pass

• An EP holder who earns a fixed monthly salary of at least SGD12,000 may apply for a personalized employment pass (PEP).
• An overseas foreign professional whose last drawn fixed monthly salary (within six months from the date of application) was at least SGD18,000 may also apply.
• The PEP is issued for a non-renewable period of three years and may be issued only once.
• The holder must not be unemployed for a continuous period exceeding six months, and must earn a fixed annual salary of at least SGD144,000 in each calendar year in which he or she holds the PEP.
• Certain requirements for reporting to the Ministry of Manpower are imposed on the PEP holder and his or her employer.
• The PEP provides added flexibility for the holder because the pass is not tied to a particular employer.
• The PEP provides the same dependent privileges as the EP.
• The PEP does not enable the holder to take up freelance work without a direct employer, or to be a business owner (sole proprietor, working partner or director with shareholding).

Value Added Tax (VAT) in Singapore

• Goods and Services Tax ('GST') was introduced in Singapore in 1994 at 3%.
• The current rate is 8%.
• It will increase to 9% in 2024.
• All taxable supplies of goods or services are liable to GST - exceptions apply to some financial services.
• Zero rating only applies to the export of goods and international services.

Mandatory Benefits in Singapore

• These are mandatory benefits as postulated by law
• These include annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, and severance pay
• Mandatory benefits also include social security benefits.

Payroll Accrual in Singapore

Country Accruals Additional Information

Description

The CPF is Singapore's national pension scheme. Contributions are payable by Singapore citizens and permanent residents only. Employers and employees contribute 17% and 20%, respectively, of ordinary monthly wages, up to an income ceiling of SGD 6,000. Their respective maximum contributions are therefore SGD 1,020 and SGD 1,200. The rates are applicable to employees aged 55 years and below..

Payroll Accruals Additional Information

Accrued Benefits in Singapore

Why use Global Expansion to hire in Singapore

Establishing a branch office or subsidiary in Singapore can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Singapore labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Singapore law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Singapore. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Singapore Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.