Singapore

Singapore| photo 1

Singapore PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record services in Singapore to companies willing to enter the Singapore market or hire local/expat employees in this country.

Regular approach requires establishing a subsidiary in Singapore.  However, our solution allows you to start operations in Singapore in a matter of days, thus saving you time and money. WeHG would hire candidates on your behalf while you maintain full operational control of their work. Thus, legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. 

Singapore fast facts

Population, million: 5,850,342
Land area, sq. km: 728 km² 
Capital: Singapore
Local currency: Singapore dollar (SGD)

GDP per capita:$ 58500.00
GDP in currency:$ 340.00 Billion
Economic growth percentage: -6.5 to -6.0
Inflation rate (consumer prices): -0.17%
Volume of export: $ 30 billion
Import of goods and services: $ 359.27 billion
Total population: 5,850,342
Population of working age (15-64): 32.85 %

Singapore is a country with high quality working conditions, notable examples of which are low unemployment and high living standards.

To work in Singapore, you must obtain a work permit, and after moving to the country to comply with the rules and laws. However, labor immigration to Singapore has many benefits.

One of the main advantages is the equality of local and foreign workers. In other words, all workers in the country are equally protected by labor and criminal laws. Employers who mistreat foreign workers or exceed their job responsibilities will be severely punished. The Singapore Ministry of Labor imposes special conditions on employers as part of the issuance of a work permit to protect foreign workers and ensure their welfare. First, the employer is responsible and bears the cost of technical and medical services. Secondly, it is obliged to provide safe working conditions. Thirdly, under no circumstances does an employer have the right to demand from a foreign worker and receive payment in monetary or other terms as compensation for hiring this employee. It also does not have the right to claim coverage of expenses related to the employment of a foreign worker.

Employment and labor Laws in Singapore

Employment agreement/contract 

It  is advisable to have a written employment contract in Singapore. Typically, only senior management employees might have the option of negotiating their employment contracts. A violation of one or more of the terms in an employment contract by either an employee or employer is considered breach of contract. Most employment contracts include several important clauses such as:

Appointment position

  • Duration of employment contract, if applicable
  • Date of employment commencement
  • Remuneration package
  • Hours of work
  • Employee benefits
  • Probation clause, if applicable
  • Code of conduct
  • Termination
  • The terms and conditions of the employment contract cannot be less favorable than what is stipulated in the Employment Act.

Singapore Public holidays

  • New Year’s Day – Jan 1
  • Chinese New Year (2 days) – Jan 25-26 
  • Good Friday – Apr 10
  • Labour Day – May 1
  • Vesak Day – May 7
  • Hari Raya Puasa – May 24
  • National Day – Aug 9
  • Hari Raya Haji – July 31
  • Deepavali – Nov 14
  • Christmas Day – Dec 25

Personal income tax

Top marginal resident tax rate of 22% kicks in at S$320,000 of taxable income.
Non-residents are taxed at the flat rate of 15% or the resident rates whichever results in a higher tax amount.
Tax filing due date for individuals is April 15 of each year.

Social Security

Central Provident Fund (CPF) Contributions
CPF is a mandatory retirement savings scheme for Singapore Citizens and Permanent Residents.

Statutory Requirement: For employees that are Singapore Citizens or Permanent Residents, the employer is required to make contributions to the CPF fund. Monthly contributions are made by both the employee and employer. The employer is responsible for sending the monthly payment, which includes both the employer’s and the employee’s respective contributions, by the 14th of the following month. The employee’s portion is then deducted from the salary. The maximum CPF contribution rate for employer and employee is 16% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status, etc. There is no CPF contribution for foreign employees holding an Employment Pass or Work Permit in Singapore.

Vacation leave

The market norm for vacation is 14 days, although senior executives may command more (3-4 weeks). Statutory minimum is 7 days plus 1 day for each additional year worked with a company until the 8th year of service. From the 8th year of service onward, the legal minimum remains at 14 days.

Singapore Sick Leave

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.

Maternity and paternity leave in Singapore

There have been recent changes to Singapore’s maternity leave laws under the Child Development Co-Savings Act, which allocates the leave days as well as which parts are paid by the employer and government.  Specifically, the Government Paid Maternity Leave is only available to residents, not foreigners.

The minimum paid maternity leave entitlement is 12 weeks, and if the child will be a Singaporean citizen (the most likely case) it is 16 weeks.

The mother must be legally married to the child’s father.

Employment must have begun at least three months before the birth of the child.

For Singaporeans, the first eight weeks are paid by the employer and the next eight weeks are paid by the government.

The government portion is claimed by the employer and then reimbursed.

Overtime

Overtime pay, if applicable, must be paid within 14 days of the stipulated salary period.

Bonuses

There is no requirement of bonus payment under the Employment Act of Singapore.

Termination of employment 

Statutory Requirement: Either party can terminate the employment contract by giving a written notice or by paying salary in lieu of notice to the other party. There is no statutory requirement on the number of days for the notice period. The notice period depends on what is agreed upon in the employment contract and must be the same for both parties. The employee is allowed to use any accrued annual leave to offset the notice period. The employment contract can be terminated by either party without notice if the other party is in willful breach of the contract.

Common Practice: It is common practice to provide 2 weeks’ notice period during the probationary period, and 1 month’s notice period following the confirmation of employment. Although the Employment Act provides that both sides may give salary in lieu of notice, the Singapore courts have held the view that the employee can not terminate the contract by giving his salary in lieu of notice, because of the practical difficulties faced by the employer in such a situation.

Penalties

One of the mechanisms Singapore authorities use to protect employees’ rights under the law is penalties imposed for employer misconduct. A company’s failure to comply with the provisions of the Act may lead to a fine of S$5,000 or imprisonment for 6 months for the managers found guilty, or both, for each violation. For a subsequent offense, the penalty rises to as much as $10,000 or imprisonment up to a year, or both.

Immigration procedure for foreign workers

Non-Singapore resident individuals are required to hold a valid work pass before they can work in Singapore. Foreigners performing certain activities in Singapore for short durations may engage in these activities without a work pass provided they submit an e-notification to inform MOM.

There are various work passes an individual can apply for depending on the nature of their work.

Singapore compensation and benefits

Singapore compensation laws

The Employment Act does not regulate the minimum salary every employee must be paid. The salary must be paid at least once a month within 7 days after the end of the salary period.

Singapore benefits management

There is no statutory requirement to provide private health insurance benefits to employees in Singapore under the Employment Act. Working professionals who are Singapore Citizens or Permanent Residents are automatically provided with a low-cost medical insurance called Medishield – a basic tier of insurance protection for all Singaporeans. As part of making contributions to the employee’s retirement fund called CPF, a certain portion of the contribution is automatically allocated to the employer’s Medisave account. Medishield insurance scheme helps Medisave account holders and their dependents meet the cost of treatment during old-age or serious illnesses. Medishield premiums are deducted from the Medisave accounts.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Singapore

  • Working hours in Singapore

    For common work arrangements, the normal contractual hours of work are as follows: Up to 8 hours a day or 44 hours a week, if employees are required to work more than 5 days a week; Up to 9 hours a day, or 44 hours a week if employees are required to work 5 days or less a week. Break times are not included in the calculation of the hours of work.

  • What are the main holidays in Singapore?

    • New Year’s Day – Jan 1
    • Chinese New Year (2 days) – Jan 25-26 
    • Good Friday – Apr 10
    • Labour Day – May 1
    • Vesak Day – May 7
    • Hari Raya Puasa – May 24
    • National Day – Aug 9
    • Hari Raya Haji – July 31
    • Deepavali – Nov 14
    • Christmas Day – Dec 25
  • What are payroll taxes in Singapore?

    Top marginal resident tax rate of 22% kicks in at S$320,000 of taxable income.
    Non-residents are taxed at the flat rate of 15% or the resident rates whichever results in a higher tax amount. Tax filing due date for individuals is April 15 of each year.

    The employer is responsible for sending the monthly payment, which includes both the employer’s and the employee’s respective contributions, by the 14th of the following month. The employee’s portion is then deducted from the salary. The maximum CPF contribution rate for employer and employee is 16% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status, etc.

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