Hire in Singapore

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Last updated at June 14, 2022
beautiful scenery in the country of singapore

Currency

Singapore Dollar (SGD)

Capital

Singapore

Time Zone

GMT+8

Key Country Facts

Introduction

Singapore was once a British colony. Its laws and customs have their roots in the British system combined with Chinese, Malay, and Indian culture, customs, and practices. She became independent in 1965 and is a parliamentary republic based on the Westminster system.

Area

Singapore’s land area is about 710 square kilometres. This is an increase from 580 square kilometres since land reclamation projects started in the 1960s.

Climate

Singapore has a tropical rainforest climate with no distinctive seasons. There is little variation in temperature throughout the year.

Culture

A blend of three races (Chinese, Malay, Indian) living and working in harmony. Singapore is a hi-tech, wealthy city-state in Southeast Asia, also known for the conservatism of its leaders and its strict social controls. The country comprises the main island and approximately 50 smaller islands. The main island is linked to the southern tip of Malaysia by a causeway and bridge.

Religion

Singapore is a multi-ethnic nation with no religion claiming an absolute majority. Buddhism is the largest religion in the country with 33% of the population adhering to this religion. ~19% identify as Christians, 14% as Muslims and 5% as Hindus. ~20% are not affiliated with any religion, and the remainder 9% are made up by other religions (including Taoism and folk religions).

Official Language

Being a country that consists of multinational communities, Singapore has varieties of languages. English is the official language for business and education.

Singapore HR at a Glance

Employment Law

The Employment Act is Singapore’s main labour law. It provides the basic terms and working conditions for all types of employees, with some exceptions.

  • It covers local and foreign employees working under a contract of service with an employer.

  • An employee can be employed in the term of Full-time, Part-time (less than 35 hours per week), Temporary or Contract.

  • An employee can be paid based on Hourly, Daily, Monthly or Piece-rated.

Part IV of the Employment Act, which details rest days, hours of work, and other conditions of service, only applies to:

  • A workman (doing manual labour) earning a basic monthly salary of not more than S$4,500.

  • An employee who is not a workman but is covered by the Employment Act and earns a monthly basic salary of not more than S$2,600.

Managers or Executives are not covered in certain terms (e.g. overtime). In general, managers and executives are employees with supervisory and executive functions, respectively. Their duties and authority may include one or all of the following:

  • Making decisions on issues such as recruitment, discipline, termination of employment, performance assessment, and reward.

  • Formulating strategies and policies of the enterprise.

  • Managing and running the business.

Employment Contract

A contract of service defines the employer-employee relationship, including the terms and conditions of employment. The contract must include certain terms and essential clauses, such as hours of work and job scope.

The contract of service specifies the agreed upon terms and conditions of employment between the employer and employee. The contract includes both explicit and implied terms. Please note that if your employee is covered under the Act, the contract terms should abide by the minimum requirements under the Employment Act. Employment contracts can be oral or written. If contracts are in the written form, it is mandatory for all employers to provide employees with a copy of the written employment contract. In addition, employers must obtain their employee’s consent before making any subsequent changes to the terms of the employment contract. It is not mandatory to have a written contract. Verbal contract would still refer to the Act; hence, workers are protected.

Employment contract contains the Key Employment Terms, such as 1) full name of employer, 2) full name of employee, 3) job title, main duties and responsibilities, 4) start date of employment, 5) duration of employment (if employee is on fixed-term contract), 6) working arrangements (daily working hours, number of working days/week, rest day), 7) salary period, 8) basic salary, 9) fixed allowances, 10) fixed deduction, 11) overtime payment period, 12) overtime rate of pay, 13) other salary-related components, such as bonus or incentives, 14) type of leaves, 15) other medical benefits, 16) probation period, 17) notice period, and 18) place of work.

Employers usually have basic terms and conditions in the contracts. Any changes to the contract terms need employee’s consent.

Probation Period / Trial Period

Employment Act does not have any clauses on probation period for employees. Common practice is 3 to 6 months.

During probation period, shorter termination notice period is usually applied.

Working Hours

Common practice is 40 to 44 hours/week, 5 days/week. Before the contract begins, employers and employees agree on the working hours. The working hour is one of the Key Employment Terms.

  • If an employee works for 5 days or less per week, contractual work hours are up to 9 hours per day or 44 hours per week.

  • If an employee work for more than 5 days a week, contractual work hours are up to 8 hours per day or 44 hours per week.

Overtime

Overtime work is all work in excess of the normal hours of work (excluding breaks). An employee is eligible for overtime payment if he/she is:

  • A non-workman earning up to S$2,600.

  • A workman earning up to S$4,500.

The overtime rate payable for non-workmen is capped at the salary level of S$2,600 or an hourly rate of S$13.60.

For overtime work, employers must pay employee 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.

Overtime hours cannot exceed 72 hours per month. If employers require employees to work more than 12 hours/day or 72 overtime hours/month, they must apply for an overtime exemption.

Bonus

  • Annual Wage Supplement (AWS) is also called the 13th month payment. It is a single annual payment on top of an employee’s total annual wage. AWS cannot exceed one month’s salary

  • AWS is not compulsory, but in common practice, it is paid in December.

  • Annual bonus is paid usually after the company’s financial year close when the performance of the company can be qualified.

Termination

  • If one party wants to terminate the employment contract, one must give notice to the other party in a written form of termination or resignation letter.

  • A termination letter is mandatory. Any notice of termination, either by an employer or an employee, must be in writing.

  • If a termination letter is provided, the employee is still considered as an employee of the company.

  • An employee either encashes or clear his/her annual leave if his/her employment was terminated.

  • If the unused leave is encashed, it should be calculated at the gross rate of pay based on his/her last drawn salary.

  • However, if an employee is terminated for misconduct, any unused leave will be forfeited.

  • Employers with at least 10 employees are required to notify the Ministry of Manpower on retrenchments, regardless of the number of employees affected. The notification must be made within 5 working days after the affected employee has been notified of the retrenchment.

Notice Period

  • The notice period must be the same for the employer and employee. The length of the notice period should be according to the written contract, or verbal agreement, if there is no written contract.

  • Common practice is 1-month notice (maybe longer for higher level positions).

  • Both parties may also agree to waive the notice period by mutual consent. Such a waiver should be done in writing.

Redundancy / Severance Pay

  • Employees who have served the company for at least 2 years are eligible for severance payment (retrenchment benefits). Those with less than 2 years’ service could be granted an ex-gratia payment out of goodwill.

  • The amount of severance payment depends on what is provided for in the employment contract or collective agreement (for unionized companies). If there is no provision, it will have to be negotiated between the employees (or their union) and the employer. The prevailing norm is to pay a retrenchment benefit of between 2 weeks to 1-month salary per year of service, depending on the company’s financial position and the industry.

  • In unionized companies where the amount of retrenchment benefit is stated in the collective agreement, the norm is 1 month’s salary for each year of service.

Tax and Social Security

Personal Income Tax

Singapore income tax is a progressive tax rate system. The tax rates range from 0-22%. Income tax filing is simple, automated, and web-based. There is no income tax deducted from an employee’s monthly salary payments. Employees pay their own income taxes.

Employers have the obligation to prepare an annual wage report Form IR8A and Appendix 8A, Appendix 8B, or Form IR8S (where applicable) for their employees. The documents must be passed to the employees by the 1st of March in the year following the employment year (Jan 1st – Dec 31st). Employees use these reports to prepare and file their income tax returns.

Income Above (Column A) Income Not Above Tax on (A) in SGD Tax on Excess (%)
0 20,000
20,000 30,000 2.00
30,000 40,000 200 3.50
40,000 80,000 550 7.00
80,000 120,000 3,350 11.50
120,000 160,000 7,950 15.00
160,000 200,000 13,950 18.00
200,000 240,000 21,150 19.00
240,000 280,000 28,750 19.50
280,000 320,000 36,550 20.00
320,000 44,550 22.00

Social Security

The Central Provident Fund (CPF) is a comprehensive social security savings plan that provides working Singaporeans with a sense of security and confidence in their older age. The scope and benefits of CPF covers:

  • Retirement

  • Healthcare

  • Home Ownership

  • Family Protection

  • Asset Enhancement

Singaporean and permanent residents (SPR) are eligible to participate in CPF. Foreigners are not eligible. Permanent residents and their employers will make contributions to CPF on a monthly basis. The deposits go into 3 accounts:

  • Ordinary Account: Funds to buy home, CPF insurance, and investment

  • Special Account: For older age and retirement investment

  • Medisave Account: Hospitalization and approved medical insurance

The contributions payable are based on the employee’s actual wages earned for the month. The employee’s share will be deducted from the employee’s salary. The rates for the CPF fall into three categories:

  • Full employer and employee contribution: Singapore citizen and permanent resident more than three years

  • Graduated employer and employee contribution: 1st and 2nd year permanent resident

  • Full employer and graduated employee contribution: 1st and 2nd year permanent resident with MOM approval

CPF contributions are based on several factors including age, residency status, and type of earnings. The contribution rates are subject to change.

The below table represents contribution rates for employees earning >SGD 750 per month and who are Singaporeans or Singapore Permanant Residents of 3 years or more.

Employee’s Age Employer Contribution (%) Employee Contribution (%) Total (% of Wages)
55 and below 17.0 20.0 37.0
55 – 60  14.0 14.0 28.0
60 – 65 10.0 8.5 18.5
65 – 70 8.0 6.0 14.0
>70 7.5 5.0 12.5

The maximum employer contribution per month on ordinary wage is capped at SGD 1,020.

The maximum employee contribution per month on ordinary wage is capped at SGD 1,200.

*The above rates serve as a broad guideline. Actual rates charged will differ.

Employees

Salary Payment

Payment via bank transfer is the most common and the mandatory payment mode for foreigners.

Payslip

Monthly available on website, pdf or paper

Annual Leave

  • Employees are entitled to paid annual leave if they work for more than three months.

  • Minimum annual leave is 7 days for the 1st year and additional one day for each additional year of service capped at 14 days.

Sick Leave

The number of days of paid sick leave is dependent on the employee’s service period.

No. of Months of Service Paid Outpatient Leave (Days) Paid Hospitalisation* Leave (Days)
3 months 5 15
4 months 8 30
5 months 11 45
6 months and thereafter 14 60

* An employee is deemed to be hospitalized if he/she is certified by a doctor to need hospitalization. He/she does not necessarily have to be warded in a hospital.

Maternity & Parental Leave

Mothers are eligible for 16 weeks of paid maternity leave if the following requirements are met:

  • The child is a Singapore citizen,

  • The mother has served her employer for at least three months before the birth of the child, and

  • The mother has given her employer at least one week’s notice before going on maternity leave.

The employer will pay the usual monthly salary during the leave period and claim reimbursement from the Government in accordance with the Government-Paid Maternity Leave (GPML) scheme. For the 1st and 2nd child, the 1st 8 weeks will be paid for by the employer, and the last 8 weeks by the Government. For the 3rd and subsequent births, all 16 weeks are paid for by the Government.

For a female employee who does not qualify for Child Development Co-Savings Act Scheme, she may be entitled to 12 weeks maternity leave if she fulfills necessary criteria. The employer is required to pay monthly salary for the first eight weeks of maternity leave. Whether the employer is required to pay salary during the last four weeks of maternity leave depends ultimately on the terms of the employment contract between the employer and employee.

Where there is a mutual agreement with her employer, an employee can take the last eight weeks (9th to 16th week) of maternity leave flexibly over a 12-month period from the child’s birth. The number of days of maternity leave that can be taken flexibly is equivalent to 8 weeks’ worth of working days, up to a maximum of 48 days.

Employers will pay usual monthly salaries during the leave period. They can then claim reimbursement from the Government in accordance with the Government-Paid Maternity Leave (GPML) scheme: 50% for the first two children and 100% thereafter.

From January 1st, 2017, eligible working fathers, including those who are self-employed, are entitled to two weeks of paid paternity leave funded by the Government subject to the agreement of the mother and meet the following criteria under CDCA:

  • The child is a Singapore citizen born on or after January 1st, 2017.

  • The father is or had been lawfully married to the child’s mother between conception and birth.

  • The father has served his employer for a continuous period of at least three months before the birth of the child.

Childcare and Extended Childcare Leave

Childcare Leave under Child Development Co-Savings Act, eligible working parents of Singapore citizen children are entitled to 6 days of paid childcare leave per year and need to meet the following criteria to be eligible:

  • The child is a Singapore citizen,

  • The youngest child is below 7 years old.

  • The parent has served the employer for at least three months continuously.

Parents of non-citizens can get 2 days of childcare leave a year in accordance with the Employment Act.

Extended Childcare Leave

Extended Childcare Leave under Child Development Co-Savings Act, eligible working parents of Singapore citizen children are entitled to 2 days of paid extended childcare leave per year and need to meet the following criteria to be eligible:

The child is a Singapore citizen,

The youngest child is between 7 and 12 years old (inclusive).

The parent has served the employer for at least three months continuously.

For parents with children in both age groups (i.e., below 7 years as well as between 7 and 12 years), the total paid childcare leave for each parent is a maximum of 6 days per year.

Public Holidays

There are eleven public holidays in Singapore. Each major local race and religion have two holidays each in addition to the secular holidays of New Year’s Day, Labour Day and National Day.

Benefits to the Employee in Singapore

Statutory Benefits

The only government mandated pension system in Singapore is the Central Provident Fund (CPF) system. It is a defined contribution system consisting of funds contributed by the employee, the employer, and the interest accumulated on the contributions.

 

MOSQUE BUILDING AND MENDAKI FUND (MBMF)

MBMF comprises the Mosque building component, Mendaki component, and Religious education component for the Muslim community. All working Muslim Singapore citizens, permanent residents, and foreign workers are required to contribute to MBMF (unless they choose to opt out) based on the below wage scale:

 

Monthly Total Wages (SGD) Monthly Contribution (SGD)
Less than 1,001 3.00
1,001 – 2,000 4.50
2,001 – 3,000 6.50
3,001 – 4,000 15.00
4,001 – 6,000 19.50
6,001 – 8,000 22.00
8,001, 10,000 24.00
More than 10,000 26.00

SINGAPORE INDIAN DEVELOPMENT ASSOCIATION (SINDA)

Employees belonging to the Indian community including Bangladeshis, Bengalis, Parsees, Sikhs, Sinhalese, Telegus, Pakistanis, Sri Lankans, Goanese, Malayalees, Punjabis, Tamils, and people originating from the Indian sub-continent but excluding workers on foreign levy scheme and those who opt out.

Monthly Total Wages (SGD) Monthly Contribution (SGD)
Less than 1,001 1.00
1,001 – 1,500 3.00
1,501 – 2,500 5.00
2,501 – 4,500 7.00
4,501 – 7,500 9.00
7,501 – 10,000 12.00
10,000 – 15,000 18.00
More than 15,000 30.00

CHINESE DEVELOPMENT ASSISTANCE (CDAC) FUND

Employees belonging to the Chinese Community (Singapore citizens and Singapore permanent residents) may contribute based on the below wage scale unless they choose to opt out.

Monthly Total Wages (SGD) Monthly Contribution (SGD)
Less than 2,001 0.50
2,001 – 3,500 1.00
3,501 – 5,000 1.50
5,001 – 7,500 2.00
More than 7,500 3.00

EURASIAN COMMUNITY (ECF) FUND

Employees belonging to the Eurasian community who are of both European and Asian ancestry and would be defined as “Eurasian” in their identity card may contribute based on the below wage scale unless they choose to opt out.

Monthly Total Wages (SGD) Monthly Contribution (SGD)
Less than 1,001 2.00
1,001 – 1,500 4.00
1,501 – 2,500 6.00
2,501 – 4,000 9.00
4,001 – 7,000 12.00
7,001 – 10,000 16.00
More than 10,000 20.0

Visas and Foreign Workers

General Information

Singaporean citizens and Singapore permanent resident cardholders may work at will. Foreign workers and expatriates must possess valid visas, work passes, and employment passes prior to commencing work.

Foreigners and expatriates who wish to work in Singapore are required to possess permitted passes from the Ministry of Manpower (MOM). The work permit passes are varied based on the worker’s situation. Standard passes include work permit, S Pass, Employment Pass, and Personalized Employment Pass. The type of pass granted is based on the candidate’s salary range, their skills, academic and related work knowledge. Pass holders may apply for permanent resident status if they decided to make Singapore their permanent home.

Public Holidays in 2022

S.No Occasion Date
1 New Year’s Day January 1st
2 Lunar New Year February 1st – 2nd
3 Good Friday April 15th
4 Labour Day* May 1st
5 Hari Raya Puasa May 3rd
6 Vesak Day* May 15th
7 Hari Raya Haji* July 10th
8 National Day August 9th
9 Deepavali October 24th
10 Christmas Day* December 25th

*If a public holiday that falls on a rest day (typically Sunday) or another public holiday, the next working day shall be a holiday in substitution.

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