Social security - 7.5% - 17%
Skills development fund: 0.25%
Social security: 5% - 20%
| GROSS INCOME | PROGRESSIVE TAX RATE |
|---|---|
| Below 20,000 | 0% |
| 20,001 - 30,000 | 2% |
| 30,001 - 40,000 | 3.5% |
| 40,001 - 80,000 | 7% |
| 80,001 - 120,000 | 11.5% |
| 120,001 - 160,000 | 15% |
| 160,001 - 200,000 | 18% |
| 200,001 - 240,000 | 19% |
| 240,001 - 280,000 | 19.5% |
| 280,001 - 320,000 | 20% |
| 320,000 - 500,000 | 22% |
| 500,000 - 1,000,000 | 23% |
| Over 1,000,000 | 24% |
Paid time off: 7-14 days (depending on tenure) + bank holidays
Paternity leave: 4 weeks
Paid sick leave: 5-60 days determined on tenure as well as need or not for hospitalisation
Parental leave: 42 days per parent
Maternity leave: 16 weeks
There is no statutory requirement for the length of probation periods. However, it is common to agree to a probation period of 3 to 6 months, during which the notice period is shorter.
According to the Singapore employment act, salaries are paid monthly within seven days of the end of the salary period (14 days for overtime payments).
Singapore has been moving away from at-will employment. Employers must have a just cause for termination, present the employee with a termination letter and act responsibly and fairly.
If the employee termination is due to misconduct, there needs to be an inquiry before taking any action. Misconduct includes employment contract breaches, gross misconduct and absence from work for more than two working days without approval.
Termination of foreign employees will result in cancellation of their Employment Pass/S Pass within seven days of the employment coming to an end.
Employers are prohibited from issuing a notice of dismissal to a female employee during her maternity leave, or a notice of dismissal which expires during her maternity leave.
While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Singapore, outlining the potential cons.
HQ country employment & payroll
While the person is in Singapore, they are employed and payrolled directly by the company’s HQ entity.
Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.
Independent contractor agreements
People are locally registered as sole traders or limited liability company owners in Singapore and invoice for their work. There is no direct employment relationship.
Cons: In Singapore, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.
Direct local employer setup
The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.
Partnering with an Employer of Record Singapore/full-service Professional Employer Organisation
Employment is handled by a platform that specialises in employing people on behalf of customer companies. The Employer of Record helps to hire and pay employees.
Cons: For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.
Setting up a local company in Singapore is relatively straightforward. However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed. Here is an overview of everything you will find yourself needing to do.
While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Singapore, treating them as an independent contractor is a likely breach of Singaporean employment laws and of those in your country.
When you hire employees in Singapore, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with local employment law in Singapore is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.
As with every other country, there are certain costs associated with employing a worker in Singapore that come on top of the gross salary you are offering. A Singapore employer must make monthly contributions to the Central Provident Fund and Skills development fund for all employees who are Singapore citizens or Permanent Residents. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.
It means that Boundless is the legal employer of the individual, as far as the Singapore government, tax, and employment authorities are concerned. We are responsible for:
Boundless as the Employer of Record Singapore files all pertinent taxes and other contributions as they relate to the compliant employment of an individual in Singapore.
We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Singapore. They ensure the Singapore employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Singapore, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.
The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.
Boundless ensures compliance with Singapore-specific procedures, practices and labour laws while employing people and teams on behalf of the company.
Any new employee that is locally employed through an Employer of Record gets full employment rights and benefits as specified in Singapore employment law. They get a locally compliant employment contract, statutory maternity leave, annual leave, illness benefits, any relevant tax credit, and many more.
In Singapore, both employers and employees have to pay taxes. Employers make contributions to the Central Provident Fund and Skills Development Fund for all employees who are Singapore citizens or Permanent Residents. Employees contribute to the Central Provident fund and pay personal income tax. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator, submit any additional data needed, and get a downloadable pdf like this one.
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