How To Hire And Pay Employees In Singapore

Emerald Technology's guide to hiring employees in Singapore

CURRENCY

Singapore Dollar is the official currency of Singapore. Its currency symbol is S$, SGD.

CAPITAL CITY

Singapore is both a country and its capital. It occupies the southern part of Singapore island.

LANGUAGE

Singapore's official languages are; Malay, English, Tamil, Mandarin, Chinese and Singaporean Mandarin

POPULATION The current population of Singapore is 5.454 Million 2021 based on World bank numbers.
PAYROLL FREQUENCY

Salaries are paid monthly and it is common for employers to pay an end of year bonus.

PUBLIC HOLIDAYS

Singapore has 11 public holidays.

GROW YOUR TEAM IN SINGAPORE

NO ENTITY, NO PROBLEM

To start growing your team in the Singapore, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months. 

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

PROS AND CONS OF HIRING IN SINGAPORE

Singapore currently ranks 2nd on the World Bank’s ease of doing business index as a result of its business environment being investment-oriented and its strong and stable economy. The government have a focus on supporting start-ups and small businesses with several grants and incentives specifically designated to this category. Despite this, corporate tax for all businesses remains lower than neighbouring countries at 17%. Although Singapore only has a population slightly greater than five million, the talent pool remains diverse and productive. However, Singapore has one of the highest costs of living in Southeast Asia and, as a result, can generate high costs for businesses. As well as this, the myriad of government schemes to help businesses can be inefficient as assistance is primarily monetary and the sheer number of schemes can make it difficult to receive the appropriate aid.

WHY SINGAPORE IS GOOD FOR REMOTE WORKERS

Despite the high cost of living, Singapore provides a good location for remote working due to its proximity to other ASEAN countries. For instance, Kuala Lumpur is reachable by an hour’s plane journey, which unlocks the opportunity for further travel for digital nomads. In addition to this, Singapore maintains advanced yet accessible technology which is beneficial for those working remotely. More specifically, across Singapore there is a free public Wi-Fi service available in all public buildings, such as malls and train stations.

START GROWING YOUR REMOTE WORKFORCE NOW

WORKING TIME AND OVERTIME IN SINGAPORE

Working hours in Singapore should not exceed 44 per week. Employees who work five or fewer days per week should not work more than nine hours per day. Those who work five or more days per week should not work more than eight hours per day. Overtime is payable to:

  • Non-workmen earning up to $2,600.
  • Workmen 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. Employers must pay at least 1.5x their employee’s normal hourly basic salary for overtime and payment must be made within 14 days of the last day of the salary period.

ANNUAL LEAVE AND PUBLIC HOLIDAYS

The legal requirement for annual leave is a minimum of seven days; however, it is common practice in Singapore to grant employees a minimum of 14 days of annual leave. An additional one day of annual leave will be granted for each full year of service.

There are 11 public holidays

January 1st: New Year's Day 

February 1st: Chinese New Year

February 2nd: Chinese New Year 

April 15th: Good Friday 

May 2nd: Labour Day 

May 3rd: Hari Raya Puasa

May 16th: Vesak Day 

July 11th: Hair Raya Haji

August 9th: National Day 

October 24th: Deepavali

December 26th: Christmas Day 

PROBATION PERIOD IN THE PHILIPPINES

Though not legally stipulated, the standard probation (or assessment) period in Singapore ranges between three and six months, serving as an opportunity to gauge the performance level of the new employee.

RESIGNATION AND DISMISSAL IN SINGAPORE

In the event of resignation, if the employment contract specifies a notice period, the employee must either serve the notice or pay compensation in lieu of notice. Notice can be waived by mutual consent of the employer and employee. If the employment contract does not specify the notice period, it is based on length of service as follows:

  • Less than 26 weeks’ employment: 1 day’s notice
  • 26 weeks to 2 years’ employment: 1 week’s notice
  • 2-5 years’ employment: 2 weeks’ notice
  • 5+ years’ employment: 4 weeks’ notice

In the event of redundancy, it is common practice for employers to pay between 2 weeks' and one month's salary per year of service as a severance payment. Employees with less three years’ service in a company are not entitled to retrenchment benefits under the Employment Act.

RESTRICTIVE COVENANTS

Covenants in restraint of trade, such as non-competes and non-solicits, are usually null and void in Singapore. They are only considered enforceable if they can be shown to be reasonable, such as by proving that they are required to protect the legitimate proprietary interests of the employer, and go no further than is reasonably necessary to protect those interests (especially in terms of duration, scope and geographic coverage). The courts have recognised three legitimate proprietary interests thus far: an employer's trade secrets and confidential information, the protection of trade connections, and the maintenance of a stable trained workforce.

READY TO HIRE YOUR EMPLOYEES IN SINGAPORE?

CONTRACT OF EMPLOYMENT IN SINGAPORE

All employers are required to issue key employment terms (KETs) in writing, as well as itemised payslips, to employees who will be employed for a continuous period of 14 days or more. KETs should be provided within 14 days from the start of employment and may be in soft or hard copy. Other than as set out above, there are no legal requirements for employers to have employment contracts in writing with employees, and there are no formalities that need to be complied with, although written contracts are recommended.

MATERNITY LEAVE IN SINGAPORE

If her child is a Singapore citizen, a pregnant employee is entitled to 16 weeks of government-paid maternity leave. If her child is not a Singapore citizen, the employee is entitled to 12 weeks of maternity leave (provided she is covered by the Employment Act). In the latter case, only the first 8 weeks of maternity leave are paid by the government. All working fathers are eligible for two weeks of paid paternity leave, as long as they have been married to a Singapore citizen between conception and birth, and the baby is a Singapore citizen.

SICKNESS LEAVE IN SINGAPORE

Employees are generally entitled to sick leave if:

  • they have completed at least three months’ continuous service;
  • they have informed their employer within 48 hours of their absence; and

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 length of service. Employees who have worked for at least six months are eligible for 14 days of outpatient, non-hospitalisation leave and 60 days of hospitalisation leave, which includes the 14 days of outpatient leave.

SOCIAL SECURITY

The Central Provident Fund (CPF) is Singapore's national pension scheme. Contributions are payable to Singapore citizens and permanent residents only, aged 55 years and below. Employers and employees contribute 17% and 20%, respectively, of ordinary monthly wages, up to an income ceiling of SGD 6,000. 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.

 

The Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage employees and the self-employed to save for retirement over and above their CPF savings. The maximum amount to be contributed is subject to an income cap of SGD 102,000. Employers are allowed to contribute to their employees’ SRS accounts, subject to contribution limits of 15% for Singapore citizens or permanent residents and 35% for foreign citizens. Employees will be taxed on these employer contributions, but are entitled to corresponding tax relief.

HEALTHCARE AND INSURANCE

Providing medical insurance is not a requirement for employing Singapore citizens or Employment Pass (EP) holders; however, employee health insurance is a common inclusion in most, if not all, benefits and compensation packages offered by companies in Singapore.

Employment of

FOREIGN NATIONALS IN 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 application. There are several different types of work pass available to foreign nationals, including:

Work permits (WP):

May be granted to a skilled or unskilled foreign worker who holds qualifications and experience relevant to the position. 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.

S Passes:

More experienced workers, with a minimum fixed monthly salary of SGD 2,300 and an acceptable tertiary qualification, may apply for an S Pass. The S Pass is subject to a quota and a monthly levy payable by the company.

Employment Passes (EP):

Workers who hold an acceptable degree, professional qualifications or specialist skills and have a fixed monthly salary exceeding SGD 3,600 are eligible to apply for an EP. The authorities reviewing the application may consider the applicant’s professional and academic qualifications, special skills with respect to his or her employment and his or her anticipated economic contribution to Singapore. Under the Fair Consideration Framework, before the submission of a new EP application, the employer must post the job vacancy to the designated jobs database for a period of at least 14 calendar days. Small firms with fewer than 10 employees or jobs that pay a fixed monthly salary of SGD15,000 and above are exempt from the advertising requirement. Other exemptions are available.
Salary Taxes

MINIMUM WAGE IN SINGAPORE

Singapore has no minimum wage laws or regulations, apart from for cleaners and security guards.

INCOME TAX

Effective from 1 January 2023, the graduated rates will be as follows:
Net Taxable Income 

Rate on Excess

0 - 30,000 2%
30,000 - 40,000 3.5%
40,000 - 80,000 7%
80,000 - 120,000 11.5%
120,000 - 160,000 15%
160,000 - 200,000 18%
200,00 - 240,000 19%
240,000 - 280,000 19.5%
280,000 - 320,000 20%
320,000+ 22%

 

SALARY PAYMENTS IN SINGAPORE

The payroll cycle in Singapore is generally monthly, with wages paid before the last working day of each month. It is common for employees to receive an end of year bonus, which - in good economic times - could be two or three times their monthly salary.

SOCIAL SECURITY CONTRIBUTIONS IN SINGAPORE

Employees contribute 20% of their monthly salary into the Central Provident Fund (CPF), in addition to a 20% contribution from their employer, up to an income ceiling of SGD 6,000.

WORKER MISCLASSIFICATION IN SINGAPORE

Similar to other countries, Singapore has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.

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