Termination, notice periods and severance in Singapore 2026

Terminating employment in Singapore requires employers to follow the correct notice periods, dismissal procedures and final payment rules under the Employment Act. The requirements depend on the reason for termination, whether it involves misconduct, poor performance, redundancy or retirement, and the terms of the employment contract or collective agreement.

Where a contract does not specify notice, statutory periods range from one day to four weeks, depending on length of service. Singapore has no universal statutory severance formula, although retrenchment benefits may be required under contractual or collective agreements.

Employers must also account for final salary deadlines, tax clearance and work-pass cancellation where applicable. Understanding these requirements helps employers manage terminations lawfully and consistently.

The Employment Act, Singapore’s main employment statute, covers local and foreign employees under a contract of service, including managers and executives. The Act excludes seafarers, domestic workers, statutory-board employees and civil servants. Some protections apply only below certain salary thresholds; the Singapore employee rights guide has the current figures.

For a covered employee, the sources apply in this order. “Tripartite” means agreed between the government, unions and employer groups.

The Workplace Fairness Act 2025 and its companion dispute-resolution Act have passed but were not yet in force as at 28 September 2026, and MOM is aiming for end-2027. Until then, the Employment Act’s wrongful-dismissal protection remains the operative framework. On 5 August 2026 MOM said the tripartite partners were studying whether to strengthen TAMEM; as at 30 September 2026, no change had been announced.

The reason for the exit decides the route, and each route has its own process.

Calling a redundancy an ordinary termination leaves the retrenchment duties in place, because MOM presumes retrenchment where the employer has no plan to fill the vacancy soon. Poor performance alone is not misconduct, so a performance exit uses termination with notice.

Section 10 of the Employment Act makes the contract’s notice term the controlling rule. The statutory schedule is a default for contracts that say nothing about notice. Notice must be in writing and the same length for both parties.

The notice period includes the day notice is given, public holidays and rest days. MOM’s termination with notice page recommends recording any mutual waiver of notice in writing.

Either party can end employment immediately by paying salary in lieu of the unserved notice at the gross rate of pay. The gross rate generally includes contractual allowances. It leaves out overtime, bonuses, the annual wage supplement, productivity incentives, reimbursements, and travel, food and housing allowances.

Take an illustrative employee on one month’s notice paid a basic SGD 5,000, a contractual role allowance of SGD 400, SGD 300 overtime and an SGD 800 housing allowance. Overtime and housing fall outside the gross rate, so the gross rate is SGD 5,000 plus SGD 400, or SGD 5,400. Ending the employment immediately costs SGD 5,400 in lieu. Contributions to the Central Provident Fund (CPF), Singapore’s mandatory savings scheme, apply to notice actually worked, not to salary in lieu.

Summary dismissal ends employment without notice, and it depends on a proper inquiry. MOM’s guidance on termination for misconduct sets minimum fairness elements but no fixed format.

1. Tell the employee the specific allegation.
2. Give the employee a genuine opportunity to respond.
3. Appoint a decision-maker whose position does not suggest bias.
4. Suspend during the inquiry only if needed, for up to 1 week on at least half salary. Longer needs the Commissioner for Labour’s approval, requested at least 3 working days before the week ends.
5. Decide on the evidence. Established misconduct permits a downgrade, up to 1 week’s unpaid suspension, or dismissal without notice.
6. Restore all withheld suspension salary if misconduct is not established.

The employer must prove misconduct when it relies on that reason. Keep the allegation, evidence, interview notes, the employee’s response and the decision in one file.

Retrenchment is dismissal for redundancy or reorganisation, including term contracts ended early for redundancy. Steps 1 to 5 below reflect TAMEM’s expected practice; step 6 is a statutory duty.

1. Treat retrenchment as the last resort, after considering reskilling, redeployment and cost-saving alternatives.
2. Select on objective, consistently applied criteria such as ability, experience and skills. Selection should not discriminate on age, race, gender, religion, marital status, family responsibilities or disability, and should generally avoid reducing the proportion of local employees.
3. Notify the union early; where the collective agreement provides, the norm is 1 month before employees are told.
4. Explain the business situation and selection factors before individual notices and any public announcement.
5. Serve contractual or default notice, or pay salary in lieu. TAMEM encourages longer notice where possible.
6. File the Mandatory Retrenchment Notification with MOM within 5 working days after the employer notifies the affected employee.

The notification applies when all of these are true:

• the business is registered in Singapore;
• it has at least 10 employees;
• it retrenches any employee (a single retrenchment has been sufficient since 1 November 2021);
• the person is permanent, or on a contract of at least 6 months.

Failure to notify is a civil contravention that may attract administrative penalties. A voluntary early alert during planning does not replace the mandatory filing.

Singapore has no universal statutory severance formula. Section 45 of the Employment Act excludes employees with less than 2 years’ service from a retrenchment benefit, but sets no amount for anyone else. The employer legally owes a benefit where a contract or collective agreement requires it. Otherwise, the amount is negotiated, and the tripartite advisory supplies the norm.

For instance, with 6 full years’ service, SGD 7,000 a month and no contractual term. At the top of the range, one month for each of 6 years is 6 times SGD 7,000, or SGD 42,000. At the bottom, two weeks for each year is 12 weeks’ salary. If the salary had recently been cut to SGD 6,300, SGD 7,000 remains the base.

TAMEM does not define whether the salary base includes fixed allowances or variable pay, and sets no method for part-years. Agree these points and write them down. Neither side pays CPF on a retrenchment benefit. The employee can claim an unpaid contractual benefit within 6 months of the last day. Recheck the advisory before calculating, since it is under review.

Final salary deadlines depend on who ended the employment.

For a non-citizen who needs tax clearance, the employer must withhold all monies until the Inland Revenue Authority of Singapore (IRAS) releases them, which overrides these deadlines. Section 24 of the Employment Act limits that delay to 30 days after the employer notifies IRAS. The filing steps are in the Singapore tax guide.

Unused statutory annual leave is paid at the last-drawn gross rate unless the dismissal was for misconduct, when it may be forfeited. Deductions need an authorised basis, such as absence or recovery of advances, and are ordinarily capped at 50% of a salary period. On termination, total authorised deductions may exceed that cap.

Singapore’s main work passes are the Employment Pass, the S Pass and the Work Permit. The employer cancels the pass within 1 week after the last day of employment, or within 1 week of departure if the holder has already left permanently. Once cancelled, the holder can no longer work. If the person stays on, arrange a Short-Term Visit Pass for an Employment Pass or S Pass holder, or a Special Pass for a Work Permit holder. Dependant passes generally end with the Employment Pass.

Repatriation costs differ by pass:

• Work Permit: the employer bears repatriation, including an air ticket with checked baggage, however employment ends, and cannot deduct it from salary.
• Employment Pass and S Pass: MOM’s cancellation pages tell the employer to pay the ticket and transport to the port nearest the holder’s hometown, unless the holder agrees in writing to bear the cost.

A dismissal is wrongful when made without just or sufficient cause. Examples include discrimination, depriving an employee of an entitlement, retaliation, an unproven misconduct or performance reason, and a false stated reason. Genuine redundancy is a legitimate reason.

For dismissal without notice, the employer must show it was not wrongful. For dismissal with notice, the employee generally bears that burden, though the employer must substantiate any misconduct or performance reason it relies on.

1. The employee files for mediation with the Tripartite Alliance for Dispute Management (TADM), which handles employment disputes, within 1 month after the last day. A manager or executive dismissed with notice needs at least 6 months’ service.
2. A pregnant employee claiming wrongful dismissal and unpaid maternity benefits has until 2 months after the birth.
3. If compulsory mediation fails, TADM issues a Claim Referral Certificate.
4. The employee has 4 weeks from the certificate to file at the Employment Claims Tribunals (ECT).
5. The ECT hears claims up to SGD 20,000, or SGD 30,000 after union-assisted mediation, without lawyers representing parties.

If the ECT finds the dismissal wrongful, it may order reinstatement with lost wages, or compensation in wages it decides.

From 1 July 2026, the minimum retirement age is 64 and the re-employment age is 69. Employers cannot dismiss citizens and permanent residents on age grounds below their applicable retirement age, which depends on date of birth.

Employers must offer re-employment up to 69 to eligible workers: citizens and permanent residents with satisfactory performance and medical fitness. Someone first hired at 55 or older also needs 2 years’ service before turning 64. Start talks at least 6 months before retirement and make the offer at least 3 months before, for a contract of at least 1 year, renewable to 69.

If no suitable role exists after a genuine review, the employer can transfer the re-employment obligation to another employer with the employee’s agreement. Otherwise it offers a one-off Employment Assistance Payment of 3.5 months’ salary, minimum SGD 6,250 and maximum SGD 14,750. After at least 30 months of re-employment since 64, the employer may consider a lower payment of 2 months’ salary (minimum SGD 4,000, maximum SGD 8,500).

For an illustrative worker on SGD 3,000 a month, 3.5 times SGD 3,000 is SGD 10,500, inside the range, so that is the payment. On SGD 1,500, 3.5 times is SGD 5,250, below the minimum, so the payment rises to SGD 6,250.

Before any notice is served, work through these points in order.

1. Confirm the legal employer, contract, collective agreement and work-pass sponsor.
2. Classify the exit and check for pregnancy, age, discrimination and other protected-right risks.
3. Apply the contract’s notice term, or the default, in writing.
4. Complete any misconduct inquiry before deciding, within the suspension limits.
5. For retrenchment, keep the selection record and file the notification within 5 working days.
6. Pay final salary, leave and any benefit on time, subject to tax-clearance withholding.
7. Cancel the work pass within 1 week and keep the decision file.

In Singapore, the termination has to come from the employer named in the contract. For a worker employed through an employer of record (EOR), that is the EOR. MOM states that a worker under a contract of service with an EOR is the EOR’s employee, with Employment Act entitlements, while working for the EOR’s client. In practice, the EOR issues the notice, holds any inquiry, pays and files, and handles the work pass, while the client supplies the business rationale and evidence.

MOM’s guidance also states that Singapore EORs cannot obtain work passes merely to base foreign employees in Singapore for an overseas company. A foreign company should confirm the model’s work-pass position is lawful before an exit is planned. Contractors engaged through an agent of record (AOR) fall outside these routes. Their engagement ends on the service agreement’s terms.

Put these questions to any provider, Boundless, a Payoneer company, included:

• Who signs the notice and conducts any inquiry?
• How is a retrenchment benefit calculated and funded?
• Who files the retrenchment notification and tax clearance?
• When is the work pass cancelled?

The Singapore end-of-employment guide summarises the country rules. On an inherited exit, confirm the legal employer first, then draft the letter.