Employer of Record in Singapore

Businesses can only operate smoothly in Singapore if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Singapore below, to avoid any compliance issues.

Employment Contract Requirements

Contracts outlining essential employment terms can take various forms in Singapore and are not required to be in writing to be legally valid. However, it is best practice to provide such contracts to the employee within 14 days of starting work. Basic employment details include:

• Identification of both parties
• Starting date
• Workplace details
• Job description and responsibilities
• Salary details and pay frequency, including overtime, compensation, or bonuses
• Weekly working hours, workdays, and rest days
• Allowances and deductions
• Leave entitlements
• Additional medical benefits
• Probationary period
• Notice periods for termination

Onboarding Process

We can help you get a new employee started in Singapore quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Singapore

Section IV of the Singapore Employment Act specifies that the contractual work hours, excluding break time and overtime, must not surpass 44 hours per week or 8 hours per day.

Overtime in Singapore

The Employment Act in Singapore mandates a minimum overtime rate of 150% of the regular hourly wage for eligible employees working up to 12 hours daily or 72 hours monthly. Overtime must be paid within 14 days after the last day of the salary period.

For employees earning more than 2,600 SGD per month or non-workmen earning more than 4,500 SGD per month, the entitlement to overtime pay under the Employment Act does not apply. For these employees, any overtime pay or compensation is determined by the terms of their employment contract.

Probation Period in Singapore

While not required by law in Singapore, probationary periods are commonly stipulated in the employment contract or collective agreement and typically span a duration of 3-6 months.

Fiscal Year in Singapore

1 January - 31 December is the 12-month accounting period that businesses in Singapore use for financial and tax reporting purposes.

Payroll Cycle in Singapore

The payroll cycle in Singapore is usually monthly, with employees being paid within 7 days after the end of salary period.

Minimum Wage in Singapore

Singapore does not have a universal national minimum wage. Instead, the country employs the Progressive Wage Model (PWM), which sets minimum wage standards for specific sectors and occupations.

Bonus Payments in Singapore

In Singapore, although not mandatory, it is customary to provide 13-month bonuses equivalent to one month's salary at the end of the year.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 17.25% - 32.25% on top of the employee salary in Singapore.

Employee Payroll Tax Contributions

In Singapore , the typical estimation for employee payroll contributions cost is around 20%.

Individual Income Tax Contributions

The computation of income tax in Singapore follows a progressive rate system, with factors such as household status and the number of children potentially influencing the overall tax rates.

Pension in Singapore

In Singapore, the minimum retirement age is 63, extending to reemployment until age 68. By 2030, these ages will be raised to 65 and 70. The Central Provident Fund (CPF) is the main government-mandated pension system. At 55, employees are eligible to receive the savings as a lump sum, and at 65, they may withdraw up to 20% or choose monthly payouts.

In Singapore, work permits and visas are essential for employers hiring foreign talent across various industries and skill levels. The key permits include the Employment Pass for professionals and executives, the S Pass for mid-level skilled workers, and the Work Permit for semi-skilled laborers in sectors like construction, manufacturing, and services. Entrepreneurs can apply for the EntrePass, while short-term trainees may use the Training Employment Pass. Employers must navigate the Ministry of Manpower's application process, ensure quota compliance, and meet specific eligibility criteria to hire and sponsor foreign employees successfully.

The process involves selecting the appropriate permit, submitting applications through the MOM portal, paying fees, and completing necessary formalities such as medical examinations and fingerprinting. Employers also need to renew permits within the required timeframe to avoid employment interruptions. Understanding Singapore's regulations, including fees and sponsorship responsibilities, is crucial to ensure compliance and streamline the hiring process.

Mandatory Leave Entitlement in Singapore

The annual leave entitlement in Singapore is 7 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Singapore

Singapore recognizes 10 public holidays annually, and these are separate from the minimum paid leave entitlement, serving as additional days off. The national holidays in Singapore are as follows:

Paid Time Off in Singapore

The Employment Act includes provisions for paid leave for employees with a minimum of 3 months of service. In the initial year, they are entitled to 7 days of annual leave, with an additional day for each subsequent year up to a maximum of 14 days after 8 years of service.

Nevertheless, it is common for employers to provide 14-20 days of annual leave after the first year of service.

Maternity Leave In Singapore

Pregnant employees in Singapore, having worked for a minimum of 3 months before their due date and expecting a Singaporean citizen child, are eligible for 16 weeks of paid maternity leave.

This period encompasses up to 8 weeks before the anticipated due date which must be taken consecutively and the remaining 8 weeks following the birth which can be taken flexibly within 12 months from child's birth. Other conditions for paid maternity leave include:

• Birth of non-Singaporean children qualify for 12 weeks of leave
• For the 16 week maternity leave, the employer covers the initial 8 weeks at regular gross salary, and the government reimburses the extra 8 weeks (capped at 10,000 SGD per 4 weeks or a total of 20,000 SGD per child)
• For the 12 week maternity leave, the employer covers the initial 8 weeks at regular gross salary, and the remaining 4 weeks can be paid if agreed upon. The employee is covered under the Employment Act.

Paternity Leave In Singapore

Spouses with three months of service can take a two-week paid paternity leave within 16 weeks after their child's birth. The Government-Paid Paternity Leave (GPPL) funds this, with employees receiving their regular salary, capped at 2,500 SGD per week or a total of 5,000 SGD. Adoptive fathers may also be eligible if they meet the specified criteria.

Sick Leave In Singapore

After six months of service, employees are entitled to paid sick leave, receiving regular gross salary for 14 days annually without hospitalization and 60 days with hospitalization (including 14 days for outpatient care). Notifying the employer within 48 hours and a medical certificate upon return to work are mandatory.

Before six months, the number of paid sick days depends on the length of employment:

• 3 months of service: 5 days per year, 15 days if there is hospitalization
• 4 months of service: 8 days per year, 45 days if there is hospitalization
• 5 months of service: 11 days per year, 60 days if there is hospitalization

Parental Leave In Singapore

Fathers who meet the eligibility criteria can request Shared Parental Leave, which is a 4-week reduction from their wife's 16-week maternity leave. Parents with a minimum of 3 months of service are granted 6 days of annual childcare leave until the child reaches 7, capped at 42 days. The payment structure for this leave is as follows:

• The employer covers payment for the initial 3 days.
• The government covers payment for the remaining 3 days (this is still paid by employer but reimbursed by government).
• Payments are capped at 500 SGD per day or a total of 1,500 SGD in any calendar year, inclusive of CPF contributions.

Bereavement Leave

While it is not legally mandated, employers in Singapore typically grant their employees 2-3 days of paid leave in the event of the death of an immediate family member.

Marriage Leave

Upon the occasion of an employee's marriage, although not mandatory, it is common practice to provide 1 - 3 days of paid leave for marriage.

Voting Leave

In Singapore, the day designated for voting or polling is observed as a public holiday.

Military Leave

Employees are granted paid reservist leave every year upon receiving the government-issued Notification of National Service Call-Up (SAF 100).

Termination Process in Singapore

Employment can be terminated by either the employer or employee with legal notice, ensuring reasons align with the contract and are non-discriminatory. Full notice terminations result in payment on the last day, while terminations without notice lead to payment within seven days. Compliant terminations include:

• Employee's voluntary resignation
• Mutual agreement
• Contract expiration
• Employer's unilateral decision (based on probation, objective reasons, disciplinary dismissal, or unsuitability for job responsibilities)

Notice Period in Singapore

In Singapore, the minimum notice period is initially set at 1 day and can be extended based on the following tenure:

• Less than 26 weeks of service: 1 day notice
• Between 26 weeks and 2 years of service: 1 week notice
• Between 2 years and 5 years of service: 2 weeks notice
• More than 5 years of service: 4 weeks notice

Severance in Singapore

While there is no legal mandate for employers to provide severance payments, employment contracts or collective agreements often indicate "Retrenchment Benefit" payments after completing two years of service. It is customary to offer 2-4 weeks' pay for each year of employment upon termination.