Employer of Record in Singapore

Employment Laws and Regulations in Singapore

Singapore’s employment framework follows the Employment Act and recent amendments including the Workplace Fairness Act 2025 and paternity leave enhancements effective April 1, 2025. Understanding these regulations is important for any company using an employer of record in Singapore, as non-compliance carries penalties up to SGD 50,000 for first offences and SGD 250,000 for repeat violations under the Workplace Fairness Act. The law applies to all employment relationships in Singapore regardless of employee nationality.

Employment Contracts

Singapore’s Employment Act requires all employment relationships to be documented in a written contract signed by both employer and employee. The contract must specify job title, location, compensation, working hours, notice periods, and duration (fixed-term or indefinite). Key Employment Terms (KETs) must be provided within 14 days of employment start, with penalties up to SGD 400 per employee for non-compliance.

Working Hours and Overtime

The standard workweek in Singapore is 44 hours spread across five or six days. Any hours beyond 44 per week are classified as overtime and must be compensated at 1.5 times the basic hourly rate.

Work can be compressed to 9 hours per day if the total weekly hours remain 44 or less. Monthly overtime is capped at 72 hours. Employees cannot be required to work more than 8 hours per day without overtime compensation. These rules apply to employees earning SGD 4,500 or less (workmen) and non-workmen earning SGD 2,600 or less.

Minimum Wage

Singapore has no national minimum wage; instead, the Progressive Wage Model (PWM) applies by sector. The PWM establishes sector-specific entry-level wages including SGD 1,910 for cleaning (effective July 2025), SGD 2,305 for retail (rising to SGD 2,435 in 2026), and SGD 1,750-1,850 for food services. Employers must ensure salaries meet or exceed the relevant PWM baseline for the employee’s sector and role to remain compliant.

Probation Period

Singapore law does not mandate a specific probation period. However, it’s customary practice to include a 3-6 month probation period in employment contracts. During probation, employees are entitled to all statutory benefits and protections including leave, CPF contributions, and overtime compensation. Either party may terminate during probation with notice, but statutory notice periods still apply.

Leave Entitlements

Annual Leave

Employees in Singapore accrue annual leave that increases with tenure. After 3 months of employment, employees receive 7 days of paid annual leave, rising incrementally to 14 days after 8 years of service. Annual leave must be taken within the calendar year or can be carried over into the next year for one year only, after which unused days are forfeited unless employment continues.

Sick Leave

Employees receive paid sick leave after 6 months of employment. Outpatient sick leave is 14 days per year, while hospitalization leave is 60 days per year cumulative. Medical certification must be provided within 48 hours of notification. Employees can use sick leave immediately for urgent medical needs and recover certification later if necessary.

Maternity Leave

Female employees are entitled to 16 weeks of paid maternity leave for Singapore citizen children. The first and second child receive 8 weeks employer-paid and 8 weeks government-paid (capped at SGD 20,000 total). From the third child onwards, all 16 weeks are government-paid (capped at SGD 40,000 total). Employees must provide 4 weeks’ notice and the child must be a Singapore citizen to qualify.

Paternity Leave

Male employees now receive 4 weeks of mandatory paid paternity leave for fathers of Singapore citizen children born on or after April 1, 2025. This represents a significant increase from the prior 2-week requirement. Paternity leave must be taken within a reasonable timeframe of the child’s birth, and employers cannot dismiss or give notice to an employee during paternity leave.

Shared Parental and Other Family Leave

New Shared Parental Leave allows parents to reallocate leave between themselves. Phase 1 (April 2025) provides 6 weeks shareable between parents; Phase 2 (April 2026) expands to 10 weeks. Childcare leave provides 6 days per year for children under 7 years old, plus 2 additional days for children aged 7-12. Infant Care Leave (unpaid) provides 12 days per year for children under 2 years old. Adoption leave provides 12 weeks paid for adoptive mothers of children under 12 months old.

Statutory Employee Benefits

Singapore requires employers to contribute to the Central Provident Fund (CPF), the national social security system, which provides retirement, disability, survivor, and healthcare benefits. CPF is mandatory for all employees earning SGD 750 or more per month. Contribution rates vary by employee age, with employees under 55 requiring 17% employer contribution and 20% employee contribution (37% total). These rates are set by the CPF Board and adjusted annually.

The CPF Ordinary Wage (OW) ceiling is SGD 8,000 per month (effective January 1, 2026), with an annual wage ceiling of SGD 102,000. Maximum annual CPF contribution per employee is SGD 37,740. Additionally, employers must pay the Skills Development Levy (SDL) at 0.25% of monthly wages, with a minimum of SGD 2 and maximum of SGD 11.25 per employee per month.

The Skills Development Levy funds training programs and is paid directly to the CPF Board by the 14th of the following month. Healthcare is integrated into CPF through the MediSave account, allowing employees to access subsidized medical services at public healthcare facilities. Employees retire at age 65 and receive monthly CPF Life annuity payments based on their contribution history.

Recent Regulatory Updates (2025-2026)

The Workplace Fairness Act 2025, passed January 8, 2025, introduces comprehensive anti-discrimination protections covering 11 protected characteristics including age, nationality, sex, marital status, pregnancy, caregiving responsibilities, race, religion, language ability, disability, and mental health condition. Full compliance applies to firms with 25 or more employees, with a 5-year grace period for smaller firms. Penalties range from SGD 50,000 for first offences to SGD 250,000 for serious or repeat violations.

The Platform Workers Act 2024 took effect January 1, 2025, establishing mandatory CPF contributions for gig economy workers. Paternity leave doubled to 4 weeks mandatory effective April 1, 2025. The retirement age increases from 63 to 64 and re-employment age from 68 to 69 effective July 1, 2026, tracking toward eventual 65 and 70 respectively.

Work Permits and Visas in Singapore

Non-Singaporean employees hired through an employer of record in Singapore require work passes to legally work in the country. The work pass system follows the Ministry of Manpower (MOM) framework and involves salary minimums, qualification requirements, and quota systems depending on the pass type.

Processing times vary by pass type, though MOM aims to process most applications within 5-10 working days. Understanding pass categories, eligibility requirements, and salary minimums is important for international hires.

Work Permit Requirements

Who Needs a Work Pass

All non-Singaporean citizens and non-permanent residents need a work pass before starting work in Singapore. The pass ties the employee to a specific employer and position, and changing employers requires a new application. Foreign permanent residents are exempt from work pass requirements.

Eligibility and Required Documents

Employers need the employee’s educational qualifications (certified or official copies), passport, job offer letter showing position and salary, and employment contract. The employee must pass security and background clearances. Medical examination results may be required depending on the pass type. All documents must be original, certified, or officially translated into English.

Processing Time and Validity

Employment Pass and S Pass applications typically process within 5-10 working days. Work Permits may take 2-4 weeks. Once granted, passes are valid for 1-2 years depending on the type, after which renewal applications must be filed at least 3 months before expiration.

Renewal Process

Renew work passes by submitting the same basic documents plus updated medical examinations and employment verification. Start renewal at least 3 months before expiration to avoid gaps in eligibility. If an employee changes employers, the new employer must file a new application.

Common Pass Types

• Employment Pass (EP): Professional, manager, or executive roles earning SGD 5,600/month (general) or SGD 6,200/month (financial services) minimum.
• S Pass: Skilled workers earning SGD 3,150/month (general) or SGD 3,650/month (financial services) minimum; subject to quota.
• Work Permit (WP): Unskilled or semi-skilled workers; includes R1 (higher-skilled) and R2 (basic-skilled) categories with sector-specific requirements.
• Tech.Pass: Tech workers and engineers; 2-year validity with 1 renewal option; no minimum salary requirement; allows simultaneous startup work.
• ONE Pass: Premium pass for high-earners (SGD 30,000/month minimum); 5-year validity with renewable terms; flexible sector switching.
• Personalised Employment Pass (PEP): Employer-independent pass allowing job mobility; designed for senior managers and executives.
• EntrePass: For foreign founders and entrepreneurs; no salary requirement; focuses on innovation and business establishment.

How an EOR Handles Work Passes

An EOR manages the entire work pass application process, compiling documentation and coordinating with the Ministry of Manpower. They track application status and ensure salary requirements are met for each pass type. If denied, the EOR advises on alternatives or reapplication strategies. They proactively start renewal processes before expiration to prevent gaps in work eligibility.

The EOR manages salary increments to ensure they don’t inadvertently create pass eligibility issues, and updates payroll and compliance records to reflect pass status and any quotas affecting staffing decisions.

Payroll, Taxes, and Social Security in Singapore

Singapore’s payroll system, managed by the employer of record on your behalf, combines employer and employee CPF contributions, progressive income tax, and the Skills Development Levy. The system is monthly, with salaries typically paid by bank transfer on the last working day of the month. Understanding CPF contribution rates, tax brackets, and compliance requirements is important for accurate payroll management.

Employer Contributions

Employers must contribute to the Central Provident Fund (CPF) based on the employee’s age. For employees aged 55 and below, the employer contribution rate is 17% of ordinary wages up to the SGD 8,000 monthly ceiling. Contribution rates decrease for older workers, falling to 16.5% for ages 55-60, 12.5% for ages 60-65, and even lower for workers over 65.

Additionally, employers pay the Skills Development Levy (SDL) at 0.25% of total monthly wages, with a minimum of SGD 2 and maximum of SGD 11.25 per employee per month. These contributions are non-negotiable and must be paid to the CPF Board by the 14th of the following month.

Employee Contributions

Employees contribute to CPF at rates matching their age band. For employees aged 55 and below, the employee contribution is 20% of ordinary wages, paired with the 17% employer contribution for a total of 37%. This is deducted directly from the employee’s salary each month. Income tax is calculated separately on chargeable income after CPF deductions.

Income Tax

Singapore’s income tax system uses progressive annual brackets that apply to YA 2026 (Year of Assessment 2026). Tax is calculated on chargeable income (after CPF deductions) using rates ranging from 0% on the first SGD 20,000 to a top rate of 24% on income exceeding SGD 1,000,000. A Personal Income Tax Rebate of 60% applies, capped at SGD 200, and is automatically applied by IRAS.

Tax calculations work as follows: for an employee earning SGD 60,000 chargeable income annually, the tax owed is 0% on the first SGD 20,000 (SGD 0), 2% on the next SGD 10,000 (SGD 200), and 3.5% on the remaining SGD 30,000 (SGD 1,050), for a total tax of SGD 1,250. After the 60% Personal Income Tax Rebate (capped SGD 200), the net tax becomes SGD 1,050.

Payroll Cycle

Payroll in Singapore is processed on a monthly basis, with salaries typically paid on the last working day of each month or as specified in the employment contract. Payments are made by bank transfer to the employee’s designated account in Singapore Dollars (SGD). An EOR manages all payroll processing, ensuring accurate CPF calculations, tax withholding, and timely payments.

The payslip provided to each employee must itemize gross salary, CPF contributions (employer and employee), income tax withheld, any allowances or deductions, and net pay. Employers retain payroll records for at least 3 years to support tax audits and CPF verification. If an employee leaves mid-month, final pay including any accrued leave must be processed within 7 days of departure.

13th Month Salary and Bonus Pay

Singapore does not mandate a 13th month salary by law. However, the Annual Wage Supplement (AWS) or year-end bonus is customary practice, with approximately 86% of Singapore firms offering AWS or equivalent variable pay. When included in an employment contract or company policy, the AWS becomes a binding obligation subject to the same CPF contribution limits and income tax treatment as regular salary.

The AWS is typically paid once annually, usually in December, and is calculated as a percentage of salary or a fixed amount as specified in the contract. The AWS counts toward the annual CPF contribution ceiling of SGD 102,000 and the maximum annual CPF contribution of SGD 37,740. If employment ends before the AWS is paid, the accrued amount must be included in the final paycheck.

Cost of Hiring Through an EOR in Singapore

EOR Service Fees

Employer of record service fees in Singapore typically range from SGD 500 to SGD 1,200 per employee per month (approximately USD 370-890), depending on the provider’s service level and the complexity of payroll administration. These fees cover CPF administration, tax compliance, payroll processing, benefits administration, and regulatory filings, eliminating the need for a local HR department. The exact fee structure varies by provider but is generally charged as a flat monthly cost rather than a percentage of salary.

Total Employment Cost Breakdown

The total cost of hiring through an EOR includes the gross salary, mandatory CPF contributions, Skills Development Levy, and the EOR service fee. Understanding this breakdown helps organizations budget accurately for remote hiring in Singapore.

Ready to simplify your hiring costs in Singapore? Contact our team to receive a custom pricing proposal based on your team size and needs at https://remotepeople.com/contact/.

Benefits of Using an EOR in Singapore

Hiring through an employer of record eliminates the complexity of establishing a local legal entity while maintaining full employment compliance. Your organization gains immediate access to vetted talent without navigating Singapore’s multi-layered CPF system, income tax requirements, work pass regulations, or ongoing administrative overhead.

An employer of record provider handles all CPF calculations across multiple age bands, tax filings with IRAS, work pass applications with MOM, and benefits administration, reducing your operational burden and allowing your internal team to focus on core business activities. You retain full control over hiring decisions, work assignments, and team management while the EOR manages the legal employment relationship and regulatory obligations.

The flexibility to scale your team up or down without long-term financial commitments provides significant competitive advantage in the Asia-Pacific region. You can test the Singapore market, hire specialized talent for project work, or adjust headcount based on business needs without the time and expense required to close a local office. The rapid deployment (1-2 weeks) enables you to move quickly in a competitive talent market.

Termination and Offboarding in Singapore

Notice Periods

Singapore’s Employment Act specifies different notice periods depending on length of service. For employees with less than 26 weeks of service, either party must provide 1 day’s notice. For service of 26 weeks to 2 years, notice increases to 1 week. For service of 2 to 5 years, notice is 2 weeks, and for service exceeding 5 years, notice is 4 weeks.

The notice period begins from the date the employer or employee receives written notice and continues through the last working day of employment. During the notice period, the employee remains employed and entitled to full wages and benefits. Early termination (payment in lieu of notice) is permitted if both parties agree, but statutory notice periods cannot be waived unilaterally.

Severance Pay

Calculation Method

Singapore law does not mandate statutory severance pay for terminations. However, the Tripartite Advisory on Managing Excess Manpower establishes a guideline norm of approximately 2 weeks to 1 month of salary per year of service, typically applied in retrenchment situations. The calculation uses the employee’s last gross monthly salary at the time of termination and applies to employees with at least 2 years of service.

Caps and Exceptions

No severance is required for termination during probation periods or for dismissal on disciplinary grounds. Employees who voluntarily resign are not entitled to severance pay unless the company provides it as part of its exit policy. Termination due to the employee’s own gross negligence may result in reduced or forfeited severance benefits. Payments are typically made on the final paycheck after deducting CPF contributions and income tax as required.

Grounds for Termination

Employers may terminate employees for just cause, including failure to meet job requirements despite warnings, serious violations of work rules, theft or fraud, or insubordination. Without-cause terminations are permitted but trigger notice period requirements and potential severance obligations. Singapore law prohibits termination based on the 11 protected characteristics under the Workplace Fairness Act 2025, including age, nationality, sex, marital status, pregnancy, caregiving responsibilities, race, religion, language ability, disability, and mental health condition. Violations can result in penalties up to SGD 250,000 for serious cases.

EOR vs. Other Hiring Models in Singapore

EOR vs. Setting Up a Local Entity

The EOR model delivers substantial advantages for organizations testing the Singapore market or maintaining small to mid-sized remote teams. Setup occurs within 1-2 weeks compared to 4-8 weeks for entity registration, and requires zero upfront capital investment, making this approach significantly more accessible than establishing a legal subsidiary.

Ongoing operational costs through an EOR remain predictable and per-employee, whereas a local entity requires hiring an accountant, HR manager, and legal advisor, typically totaling SGD 4,000 to SGD 10,000 monthly in overhead. For teams of 20 or fewer employees, the EOR cost advantage becomes even more compelling.

The flexibility to exit the market without lengthy wind-down periods, entity dissolution, or asset liquidation processes provides substantial risk mitigation. However, organizations anticipating rapid growth beyond 20 employees or requiring government contract eligibility may eventually benefit from transitioning to a local entity structure.

EOR vs. Hiring Independent Contractors

The choice between EOR employment and independent contractor engagement hinges on control level, duration, and compliance tolerance. EOR provides the strongest legal foundation for ongoing work relationships where you direct daily activities and expect results within your organization’s processes. Contractors suit discrete projects, specialized expertise, and situations where the individual maintains their own client base.

Misclassification represents a significant compliance risk in Singapore. Regulators scrutinize contractor arrangements where the individual works exclusively for one client, maintains set hours, or receives benefits typical of employment, potentially resulting in reclassification and back-pay liability. The EOR model eliminates this exposure entirely by establishing proper employment relationships from the start.

For teams requiring long-term talent with investment in training and development, EOR employment delivers superior cost efficiency and reduces turnover risk. Contractor arrangements work best for specialized or project-based engagements where fixed deliverables replace ongoing management.

EOR vs. PEO

Singapore has PEO services available, primarily for organizations expanding existing local operations. The distinction becomes important when you’re managing mixed local and remote teams where co-employment could theoretically simplify administrative management.

For foreign organizations initiating Singapore hiring, the EOR model provides superior speed, cost efficiency, and compliance certainty. EOR assumes full legal employer liability, eliminating shared responsibility concerns and establishing clear accountability for regulatory compliance. You retain complete control over hiring policies, compensation, and work arrangements without PEO-imposed standardized policies.

The EOR’s rapid deployment (1-2 weeks) and absence of local entity requirements make it the practical default for cross-border Singapore hiring. PEO benefits would theoretically emerge only for organizations with existing Singapore subsidiaries seeking to professionalize their HR operations, a scenario uncommon among early-stage remote hiring initiatives.

Public Holidays in Singapore

Singapore observes 11 public holidays annually, requiring employers to pay employees their normal wage for work performed on these dates or provide compensatory days off. Holiday pay factors directly into payroll calculations and affects project timelines, particularly during the Chinese New Year period in February. Your EOR provider automatically adjusts payroll to comply with these statutory requirements.

How to Get Started with an EOR in Singapore

• First: Define your hiring needs by identifying the role, required skills, and desired start date. Clarify team size, expected growth, whether employees are Singapore citizens or require work passes, and any specialized talent requirements to help your EOR provider prepare accurate pricing and compliance documentation.
• Second: Partner with an EOR provider by reviewing capabilities, pricing structures, and Singapore-specific expertise. Confirm they handle CPF administration across all age bands, IRAS tax compliance, MOM work pass applications, and have established relationships with local agencies for visa processing if international relocation is involved.
• Third: Complete your provider’s client onboarding, which typically involves KYC verification, providing job descriptions, and setting compensation ranges. This process usually completes within 1-2 weeks and requires minimal back-and-forth documentation.
• Fourth: Begin recruitment either through your own networks or your EOR provider’s talent marketplace. Your EOR handles all employment contract creation with proper Key Employment Terms, ensures compliance with Singapore’s Employment Act, and establishes payroll processing from day one.
• Fifth: Onboard your first employee by providing work assignments, access credentials, and company policies. Your EOR provider manages the administrative setup including CPF registration, IRAS tax filing, and work pass sponsorship if needed, allowing the employee to begin work immediately.

Ready to hire your first team member in Singapore? Our EOR experts guide you through every step of the hiring and onboarding process. Schedule a consultation today at https://remotepeople.com/contact/ to receive customized guidance for your Singapore hiring strategy.

Where companies hiring in Singapore expand next

Teams hiring in Singapore typically expand across ASEAN, where cross-border mobility and diverse multilingual talent make regional coverage natural. After building a team in Singapore, employers often look to a team in Malaysia for ASEAN integration and cross-border mobility, then operations in Indonesia for the ASEAN single-market trade framework. Thailand follows with overlapping ASEAN labor and mobility rules, and hiring in Vietnam typically closes the regional footprint via ASEAN-wide talent flows and shared hiring norms.