Employing in Singapore
Employing in Singapore involves navigating a robust and regulated labor market. The payroll process in Singapore requires adherence to specific regulations, including the Central Provident Fund (CPF) contributions and income tax deductions. The Employment Act provides protections for employees, regulating working hours, leave entitlements, and termination procedures. Overall, hiring in Singapore demands compliance with local laws and regulations, alongside a focus on digital transformation and specialized skills to remain competitive.
Onboarding time
Minimum Wage
Employer costs
Employee costs
Onboarding time
Team APAC can onboard your talents within an average of 48-72 hours.
Minimum Wage
While there is no minimum wage, the Progressive Wage Model (PWM) serves as a guideline for fair compensation.
Employer costs
- Pension Fund (Central Provident Fund or CPF): maximum 17%
- Skill Development Fund: 0.25%
Employee costs
- Central Provident Fund (CPF): 20%
Payroll
The payroll process in Singapore involves several key steps and compliance requirements. The actual payroll processing stage involves calculating gross pay based on salary, overtime, and other earnings, followed by determining deductions for taxes and contributions. Employers must issue itemized payslips to employees, detailing earnings and deductions. Additionally, employers must submit statutory contributions and file annual reports with the Inland Revenue Authority of Singapore (IRAS) by March 1st each year.
Payroll cycle
Employers must pay salaries at least once a month, within seven days of the end of the salary period, with overtime payments due within 14 days.
Compliance requirements
Statutory deductions, like Central Provident Fund (CPF) contributions and the Skills Development Levy (SDL), are also part of the payroll process. Both employers and employees contribute to the CPF, while SDL is levied against the employer. Additionally, employers must remit payments to relevant authorities by specific deadlines to avoid penalties.
Payroll calculations
The process begins with gathering employee details, such as residency status and salary information. Next, salaries are calculated, including gross pay, overtime, and mandatory deductions.
Additional payments
13th Salary
Singapore’s labor code does not address bonuses, although it is common for employers to voluntarily provide an extra month’s wage payment.
The 13th month payment, is also called Annual Wage Supplement (AWS) is a single annual payment on top of an employee’s total annual wage.
AWS cannot exceed one month’s salary.
Annual bonus is paid usually after the company’s financial year close when the performance of the company can be qualified.
AWS is not compulsory, but in common practice, it is paid in December.
Bonuses
Singapore’s labor code does not address bonuses, although it is common for employers to voluntarily provide an extra month’s wage payment.
See 13th Salary.
Commissions
Commissions are commonly used in Singapore, particularly in industries such as sales, recruiting, finance, and real estate.
Other allowances
In Singapore, common allowances include transport allowance, meal allowance, and overtime allowance.
Taxes
Singapore’s taxation system is characterized by a territorial basis, where taxes are levied on income earned within or derived from Singapore. Individual income tax rates are progressive, with different rates applicable to residents and non-residents.
Employee Income Tax
Resident individuals are taxed on a progressive scale ranging from 0% to 24%, with personal reliefs and deductions available to reduce taxable income. Non-resident individuals face a flat tax rate of 24% on most income types, except for employment income, which is taxed at either a flat 15% or the progressive resident rates, whichever is higher.
Income Tax
- 0% 0 SGD – 20,000 SGD
- 2% 20,001 SGD – 30,000 SGD
- 3.5% 30,001 SGD – 40,000 SGD
- 7% 40,001 SGD – 80,000 SGD
- 11.5% 80,001 SGD – 120,000 SGD
- 15% 120,001 SGD – 160,000 SGD
- 18% 160,001 SGD – 200,000 SGD
- 19% 200,001 SGD – 240,000 SGD
- 19.5% 240,001 SGD – 280,000 SGD
- 20% 280,001 SGD – 320,000 SGD
- 22% 320,001 SGD – 499,000 SGD
- 23% 500,000 SGD – 999,000 SGD
- 24% 1,000,000 SGD and over
Employment eligibility
In Singapore, employment eligibility for foreign workers is primarily governed by the Employment Pass (EP) and other work passes. To be eligible for an EP, applicants must have a job offer from a Singapore-registered company, typically in managerial, executive, or specialist roles. As of January 2025, new EP applicants in non-financial sectors must earn at least S$5,600 per month, while those in financial sectors require a minimum of S$6,200. These salary requirements increase with age.
Additionally, applicants must possess acceptable qualifications, such as a good university degree, and meet the Complementarity Assessment Framework (COMPASS) criteria, which evaluates factors like salary, education, and support for local employment. Employers or appointed agents must apply for the EP on behalf of the applicant. Other passes, like the S Pass, are available for semi-skilled workers with lower salary thresholds and specific educational requirements.
Visa
As of January 2025, new EP applicants in non-financial sectors must earn at least S$5,600 per month, while those in financial sectors require a minimum of S$6,200. These salary requirements increase with age. Additionally, applicants must possess acceptable qualifications, such as a good university degree, and meet the Complementarity Assessment Framework (COMPASS) criteria, which evaluates factors like salary, education, and support for local employment. Employers or appointed agents must apply for the EP on behalf of the applicant. Other passes, like the S Pass, are available for semi-skilled workers with lower salary thresholds and specific educational requirements.
Visa types
Singapore offers several types of work visas and permits for foreign nationals seeking employment in the country. Here are some of the main types:
Types of Work Visas
- Passes for professionals: Employment Pass, EntrePass, Personalized Employment Pass,
- Overseas Networks & Expertise Pass (ONE Pass).
- Passes for skilled and semi-skilled workers (S Pass and other work permits)
- Short-term visit passes (STVP)
Compliance documents types
- hold a valid passport
- be at least 18 years of age
- be qualified for the role (with supporting documents from accredited institutions)
- only work within the scope of their role.
Background check
In Singapore, visa-related background checks are not explicitly detailed as a standalone process but are integral to ensuring compliance with immigration regulations. Employers often conduct background checks to verify a candidate’s qualifications and history, which may include verifying the right to work in Singapore. For foreign workers, obtaining a work pass requires employment verification proof from an accredited background screening provider, as mandated by the Ministry of Manpower.
While the focus is more on general background checks, such as criminal records and employment history, ensuring that foreign employees have valid work passes is crucial to avoid legal issues. Visa requirements themselves are more about pre-entry permissions rather than background checks, but employers must ensure that all foreign employees comply with immigration laws to avoid penalties.
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Benefits
Employee benefits in Singapore are a combination of mandatory and voluntary offerings. Mandatory benefits include contributions to the Central Provident Fund (CPF), which covers retirement, healthcare, and housing needs. Other compulsory benefits include workers’ compensation insurance, maternity and paternity leave, and annual leave.
Voluntary benefits often offered by employers include private health insurance, life insurance, additional paid vacation days, stock options, and bonuses.
Private health insurance
Private health insurance in Singapore is designed to cover healthcare costs not fully covered by Social Security Organization (SOCSO), which is a compulsory program for work-related accidents and diseases. It provides additional benefits and flexibility in healthcare choices.
Team APAC providers
- SafetyWings
- Henner
- IMG/ ALC Global
Mandatory benefits
Statutory benefits include contributions to the Central Provident Fund (CPF), compensation insurance, maternity and paternity leave, and annual leave.
Mandatory benefits in Singapore
- Central Provident Fund (CPF),
- Compensation insurance
- Maternity leave
- Paternity Leave
- Annual Leave
Working hours
The standard workweek is 44 hours, the standard workday is 9 hours. The standard workweek is from Monday to Friday.
Working hours per day
The standard workday is 9 hours.
Working hours per week
The standard workweek is 44 hours.
Overtime pay
Overtime payment is not mandatory and is assumed included in employee salary.
Leave
In Singapore, mandatory leaves are governed by the Employment Act, which provides statutory entitlements for employees. Employees who have worked for at least three months are entitled to paid annual leave and paid outpatient sick leave. Female and male employees are entitled to maternity leave and paternity leave, respectively, for Singaporean children. Singapore also mandates 11 paid public holidays annually, with additional compensation if an employee works on these days.
Annual leave
Employees who have worked for an employer for at least three months are entitled to seven days’ paid annual leave and accrue one additional day for each subsequent year of service after the first up to a maximum 14 days of paid annual leave. An employee who has completed at least three months of service in a given calendar year is entitled to leave in proportion to the number of months of service completed in that year.
An employee forfeits annual leave if absent from work without the employer’s permission or without a reasonable excuse for more than 20 percent of the working days in the months or year in which the entitlement to leave accrues.
The employer must allow the employee to take leave within 12 months of its accrual. Any leave not taken within 12 months of accrual is forfeited.
Sick leave
Following an examination at the employer’s expense by a medical practitioner of the employer’s choosing, an employee with at least six months’ service is entitled to paid sick leave up to 14 days per year if no hospitalization is required. If hospitalization is required, sick leave is limited to the lesser of 60 days or 14 days plus the number of days the employee was hospitalized. An employee with at least three months’ service but less than six months’ is entitled to sick leave proportionate to the time worked.
An employee whose sick leave has not been certified by a medical practitioner or who has failed to notify the employer within 48 hours of beginning sick leave is deemed to be away from work without permission and without a reasonable excuse.
Parental leave
There is no parental leave currently required by law.
Maternity leave
Female employees are entitled to 16 weeks of paid maternity leave if they have worked for their employer for at least three months and the child is—or will be—a Singapore citizen. The first eight weeks of leave are paid by the employer; the remaining eight weeks are paid by the government. The paid benefit is capped at S$10,000 per month.
A woman qualifies for only 12 weeks’ leave if she has worked for her employer less than three continuous months or if her child is not a Singaporean citizen. She will receive eight weeks’ pay from her employer if she has fewer than two living children of her own at the time of delivery. The remaining four weeks are unpaid.
Paretnity leave
Fathers are entitled to a paternity leave of two weeks in Singapore. In order to meet the requirements of government-paid paternity leave, the child must be a Singapore citizen and the father must have been legally married to the mother between the conception and birth of the child. Paternity leave is applicable even when the child is adopted, as long as the child is a Singapore citizen. Managers earning more than SGD 4,500 per month are covered by specific terms of the employment contract.
Other types of leave
Long service leave
Currently, there is no law requiring additional leaves relative to long service leave.
Compassionate leave
Currently, there is no law requiring compassionate leave.
Family & domestic violence leave
Currently, there is no law requiring domestic violence leave.
Termination
In Singapore, the termination of employment can be initiated by either the employer or the employee, with both parties required to follow the terms outlined in the employment contract.
Notice periods are typically specified in the contract, but if not, they follow statutory guidelines. Employers must have just cause for termination and provide a termination letter. Upon termination, employees are entitled to accrued benefits, salary up to their last day, and any contractual payments. Foreign employees’ work passes must be canceled within seven days of termination.
Termination process
The termination process involves several key steps and considerations. Either the employer or employee can initiate termination by providing written notice, as stipulated in the employment contract or the Employment Act. Employers can terminate contracts without cause by giving notice or paying in lieu of notice, while summary dismissal for misconduct can occur without notice. Termination letters are mandatory for formalizing the process. In cases of retrenchment, employers must comply with statutory requirements, including notifying the Ministry of Manpower and providing support services. Employees who feel wrongfully dismissed can file claims with the Tripartite Alliance for Dispute Management within one month of their last day of work.
Termination reasons
Valid reasons for dismissal include misconduct, poor performance, and redundancy.
Notice period
In Singapore, the statutory notice period varies based on the length of employment. For employees with less than 26 weeks of service, a one-day notice is required. Those employed for 26 weeks or more but less than two years must provide one week’s notice. Employees with two to five years of service need to give two weeks’ notice, while those with five years or more of employment must provide four weeks’ notice.
Severance Pay
In Singapore, there is no obligation to pay severance.
Probation period
In Singapore, probation periods are not mandatory, but common practice is from three to six months.
Probation Period days
- 90 days Minimum probation period
- 180 days Maximum probation period
