Employer of Record in Singapore
Skuad’s Singapore Employer of Record (EOR) solutions assist in the smooth expansion of your business in Singapore. A favorable business environment for overseas investors, low tax rates, and an immensely skilled workforce make Singapore an apt choice for expanding your scale and reach. It comes as no surprise that it is one of the favorite destinations of entrepreneurs aiming to expand globally. Skuad as your EOR in Singapore adds to the charm as you would not be required to set up a separate legal entity to do business in Singapore.
Hiring employees in another country can be time-consuming and arduous as it requires knowledge of the local laws and regulations. Skuad makes this task easier by offering customized solutions for your human resources needs. As a reputed and trusted EOR solutions company in Singapore, Skuad takes the responsibility of handling the onboarding, taxes, and payroll of employees in Singapore in strict compliance with local laws and regulations.
Singapore at a Glance
Population: 6.1 million
Languages: English, Malay, Mandarin, and Tamil
National language: Malay
GDP: USD 466.79 billion
Currency: Singapore Dollar
Employment in Singapore
Singapore has a business-friendly environment, which makes it a lucrative destination to expand your business. Organizations planning to grow their business in Singapore must have in-depth knowledge of Singapore labor laws. A clear understanding of Singapore’s employment laws enables you to comply with the regulations and employ workers with ease.
There has been a drastic increase in the demand for knowledge workers in recent years. The other prominent sector is banking and finance.
The main tenets of Singapore’s Employment Act, 1968 are given in the following table.
| The Employment Act, 1968 |
The Employment Act of Singapore outlines the terms and conditions of hiring employees and provisions that govern the employer-employee relationship. It covers all the employees, local and foreign except,
- Seafarers
- Domestic workers
- Civil servants
|
| Coverage of the Employment Act |
The Employment Act covers full-time, part-time, temporary, and under-contract employees. Part-time employees are those employees who work for less than 35 hours a week. |
| Working-age |
In Singapore, you can employ people who are 17 years old and above. The age of retirement is 62 years. Both citizens and permanent residents of Singapore can be re-employed further till 65 years of age. |
| Salary |
The employer must pay the employee’s salary within seven days after it is due. |
| Paid Leave |
An employee is entitled to paid leave if they have completed three months working for an employer. The number of paid annual leaves depends on the number of years the employee has served the organization.
| Number of paid leaves |
Number of years worked |
| 7 days |
1 |
| 8 days |
2 |
| 9 days |
3 |
| 10 days |
4 |
| 11 days |
5 |
| 12 days |
6 |
| 13 days |
7 |
| 14 days |
8 |
|
| Public holidays |
According to the Employment Act, employees in Singapore are entitled to 11 public holidays in a year. If an employee works on a public holiday, they should be paid extra or get a compensatory off. |
| Working hours |
The statutory working hours in Singapore are 44 hours a week. |
| Overtime payment |
An employee working overtime is eligible to be paid one and a half times their hourly salary. |
| Medical leave |
An employee is entitled to claim paid outpatient sick leaves and paid hospitalization leaves if they have worked for an organization for three months. An employee gets up to 14 days of paid outpatient sick leave and 60 days of paid hospitalization leave, which includes 14 days of paid outpatient sick leave. An employee will receive full entitlement if they have completed six months of service. |
| Maternity leave |
Expecting mothers are allowed to avail of maternity leave in Singapore. The length of the maternity leave depends on the nationality of the child. If the child is a Singapore citizen, the mother is entitled to 16 weeks of maternity leave. In other cases, according to the Employment Act, working women can claim maternity leave of 12 weeks from their employer, provided they have completed three months of service. |
| Leave expiry |
If an employee fails to use their leaves in a year, they are forfeited at the end of the year and not carried forward. |
| Leave cash out |
An employee is entitled to receive the accrued leaves in cash at the time of termination of service. |
| Employee health benefits |
Although it is not mandatory by law to provide employee health benefits, most employers in Singapore provide health insurance to their employees. This keeps the employees motivated and boosts performance. |
| Confidentiality of employees |
The Personal Data Protection Act of Singapore states that the employer cannot use the employees’ personal information without their prior consent and knowledge. |
The complex nature of employment laws and guidelines makes the services of professional EORs in Singapore indispensable. Skuad helps organizations manage a remote team in Singapore through its advanced global HR platform. Book a demo to learn more.
Contractors vs. Full-time Employees
Organizations can opt to hire full-time employees or contractors according to their business needs. An employment contract in Singapore states the terms of the relationship between an employer and an employee. It is essential to have an employment agreement in Singapore as it specifies the rights and obligations of the employer and employee. The main points of distinction between a full-time employee and an independent contractor are as follows.
- A full-time employee is paid monthly. A contractor is a temporary employee and is paid for their services in a lump sum or commission.
- Employers can exert complete control over full-time employees and direct them to work according to their business needs. However, an independent contractor uses their discretion to work independently.
- An organization must contribute to the Singapore Central Provident Fund (SCPF) for its full-time employees. The employer and the employees contribute to the SCPF monthly. An independent contractor is not entitled to this benefit.
- An employee’s entire income is taxable, and personal expenses cannot be deducted from the income for tax computation. However, an independent contractor would deduct their business expenses from their income and compute the tax liability.
- Full-time employees are entitled to receive all the benefits covered under the Employment Act. Contractors are not entitled to receive employee benefits.
Organizations should hire full-time employees for regular duties that are necessary for the long term. Contractors or freelancers should be hired for specific services that are required in the short term. Skuad helps organizations to find the right blend of full-time and contract-based employees, keeping in mind the diverse organizational requirements. Skuad ensures that your company complies with the Employment Contract Law, Singapore, and follows labor practices. Partner with Skuad to learn more and increase the scale and reach of your business.
Hiring in Singapore
Hiring in Singapore can be daunting for a firm that does not have a legal entity there. To hire employees in Singapore, one must be well aware of the employment regulations of Singapore. The popular route is to go through hiring platforms in Singapore such as Jobstreet, Gumtree, Beam, CareerBuilder, and Freelance Zone, which have skilled and adept talent willing to work for your organization. These platforms are advantageous as they help to find the right candidates and save you time and money. However, on the other hand, it entails having to screen several applications to find the right one.
Skuad simplifies the process of hiring in Singapore. After understanding the desired qualifications, responsibilities, duration of service, and salaries of the employees, Skuad drafts an agreement of employment that complies with the local laws. Thereafter, the new employee is registered for payroll. Skuad manages the payroll and prepares payslips every month.
A dedicated Account manager is appointed to each client and is responsible for tracking all the details and the payslips of the employees. Skuad assists with the performance evaluation of employees and termination whenever required. Book a demo to learn more.
Probation & Termination
The probation period for employees in Singapore varies from three to six months in different organizations. An employee is treated as a permanent employee of an organization upon completing the probation period.
| Termination |
An employee can be terminated according to the terms of the employment contract. After giving them notice, you may terminate an employee from service if there is sufficient cause for termination. |
| Notice period |
If the notice period is not mentioned in the contract, the employer must follow the notice period regulations outlined in the Employment Act.
The notice period according to the Employment Act is
- One day for employees who have served less than two weeks
- One week for employees who have served for 26 weeks to two years
- Two weeks for employees who have served for two to five years
- Four weeks for employees who have served for more than five years
|
Termination of employment in Singapore should be done with utmost care because it entails huge risks for employers. Taking the assistance of an established EOR solutions company in Singapore, such as Skuad, helps prevent any future litigation. Skuad offers complete guidance and support in the matters of probation and the termination of an employee.
Get in touch with Skuad experts to learn about the probation period and termination of employment in Singapore.
EOR Solution
Skuad has a client-centric approach and delivers end-to-end EOR solutions to its diverse clients. The integration of different economies has increased the opportunities to expand your business globally. An EOR service organization plays a vital role in helping you to expand your business operations.
Employer of Record Service Terms in Singapore
| Duration of service |
The minimum duration is three months. |
| Taxes applied to invoices |
Goods and services tax (GST) is applied at 7% on Singaporean entities and foreign companies are exempt from GST. |
| Acceptable currency |
US Dollars (USD), Euros (EUR), or Pound Sterling (GBP) are accepted in Singapore. |
| Required documents |
For Singaporean citizens, the following documents are required:
- Personal information
- Copy of passport
- Bank details
- Copy of National Registration Identity Card (NRIC; for permanent residents)
- Job description
For expatriates, the following documents are required.
- Personal information
- Job description
- Educational qualifications
- Technical qualifications
- Curriculum vitae (CV)
- Copy of passport
- Copy of ID
- Bank details
- Photographs
- Police verification
- Medical exam results
|
Types of Visas in Singapore
Foreign workers must mandatorily possess proper visas as per the immigration laws of Singapore. Skuad helps you arrange Singapore work visas and permits for your employees. The major types of work visas are as follows.
| Employment Pass |
All foreign employees in Singapore earning SGD 3,300 or more per month should have an employment pass. This visa is sponsored by the concerned employer in Singapore. It is valid for two years and can be renewed for three years. |
| Entrepreneur Pass |
Entrepreneur Pass or Entre Pass is for business people who are willing to start a new venture in Singapore. Your company must be a private limited company with a paid-up capital of SGD 50,000 or more. The nature of your business should not be illegal in Singapore and must be allowed by the government. The applicant should own 30% of the total share capital of the company. |
| Personalized Employment Pass |
The Personalized Employment Pass is for foreign workers or Employment Pass holders who are high-earning. You should earn SGD 18,000 or more if you are a foreign professional and make SGD 12,000 per month or more if you are an existing EP holder. This visa allows you to switch between different employers in Singapore. It is valid for three years but cannot be renewed. The employee should not be a freelancer or start a business activity with this visa. A sponsored EP holder cannot apply for this visa and should earn SGD 144,000 in a calendar year to hold this pass. |
| S Pass |
This pass is for mid-level staff. It is sponsored by an employer registered in Singapore. An employer cannot have more than 20% of its workforce as S Pass holders. This pass is valid for two years and is eligible for renewal. An employee must earn SGD 2,200 per month or more to be eligible for this pass. |
As a reputed EOR in Singapore, Skuad offers a hassle-free mechanism and takes responsibility for arranging visas and sponsoring them in Singapore in compliance with Singapore work visa requirements. Talk to us to find out more.
Work Permits
As an EOR, Skuad sponsors the work permits required by the employees in Singapore. Skuad arranges Singapore work permits for foreigners without a job offer. It takes around seven to 14 days to process the work permits. Skuad’s local entity applies for the work permit and receives an in-principle approval (IPA) letter for the employee. The employee can enter Singapore with this letter. Skuad applies for a pass for the employee. The employee registers their fingerprints and a photograph with the Employment Pass Service Centre (EPSC) to receive their pass. The pass is valid for one year and can be renewed.
| Sponsorship |
Skuad can sponsor the Work Permit. |
| Processing time |
The processing time is 14 days. |
| Process of Work Permit |
- Skuad files an application for an employee’s Employment Pass.
- An IPA letter is received by the Ministry of Manpower.
- The employee is allowed to enter Singapore on the presentation of the IPA letter.
- The employee then submits their biometrics at EPSC.
- The employee receives their pass card.
- The employee can start working in Singapore.
|
| Submission of passport |
An employee’s passport is submitted. |
| Validity |
The employment pass is valid for one year and can be renewed thereafter. |
| Work Permit criteria |
The employee must have a salary of SGD 3,600 per month or more. |
| Business Visa cost |
A Business Visa costs $400. |
| Processing time for Business Visa |
A Business Visa takes five to 10 days to be processed. |
| Switching from Work Permit to Business Visa |
Employees are not allowed to switch from a Work Permit to a Business Visa. |
| Work Permit termination |
No notice period is required for the termination of a work permit. It has to be canceled within seven days of the last day of the notice period for employment termination, or it should be canceled after one day of the expiry of the Employment Pass. |
Learn more about work permits in Singapore with Skuad’s global HR solutions.
Payroll & Taxes in Singapore
Business organizations aiming to explore the potential of Singapore to grow their business must follow the payroll and taxation rules of Singapore. Partnering with an EOR solutions company in Singapore and outsourcing the payroll mechanism is a convenient and cost-effective method to follow the tax legislation on employees in Singapore.
The tax structure of Singapore is as follows:
Employer Taxation
| Tax Explanation |
Employer Taxation |
| Payroll tax |
There is no payroll tax to be paid in Singapore. |
| Corporate income tax |
Corporate income is taxed at 17%. |
| Financial year |
The financial year ends on December 31. |
| Tax documents |
Form IR8A is the primary tax document. |
| Withholding tax |
Employers do not have to withhold income tax from employees’ salaries but are required to report employee earnings. Individuals are required to file a tax return by April 15 each year (or April 18 if electronically filed). After the return is filed, a Notice of Assessment will be issued. Payment is due 30 days after receipt of the Notice of Assessment. |
| Social Security contribution by employers |
Employers are required to contribute 17% of the salary to the Central Provident Fund (CPF). |
| Medical insurance |
Medical insurance is not mandatory. |
Employee Taxation
| Tax |
Explanation |
| Income tax |
Income tax rates are as follows.
| Gross total income |
Tax rate (%)
|
| 20,000 |
2 |
| 30,000 |
3.5 |
| 40,000 |
7 |
| 40,000 - 80,000 |
11.5 |
| 40,000 -120,000 |
15 |
| 40,000 -160,000 |
18 |
| 40,000 - 200,000 |
19 |
| 40,000 - 240,000 |
19.5 |
| 40,000 - 280,00 |
20 |
| 180,000 - 320,000 |
22 |
|
| Social Security contributions by employees |
Employees are required to contribute 20% of their salary. |
| Sales tax |
The government levies GST on all goods and services barring exports, financial services, sale or rental of residential properties, and import and supply of precious metals. |
| Tax returns |
Individuals are required to file tax returns. |
Skuad has the required expertise to manage your payroll in Singapore and comply with the tax guidelines. By acting as your Singapore employer, it handles the payroll and related taxes. Book a demo to learn more.
Incorporation: How to Set Up a Subsidiary in Singapore
Singapore is a favorite business destination for all budding entrepreneurs because of its business friendliness. Business in Singapore can be very profitable as it offers tremendous opportunities for growth and expansion. You can start your business in Singapore by the following three methods.
- Representative office
- Branch office
- Subsidiary company
To establish a subsidiary company in Singapore, you must follow the following process.
- Register your company’s name.
- File the Memorandum of Association, Articles of Association, Statutory Declaration Form 6, Identity Certificate, Notice of Registered Office, and Consent to Act as a Director.
- Appoint representatives such as the Director, Agents, and Company Secretary.
- Get a company seal.
- Open a bank account.
- Provide for Employee Insurance via the CPF.
Skuad provides a holistic solution for incorporating a holding company in Singapore. Skuad is a one-stop destination to meet all HR requirements of a business as it handles the entire paperwork and formalities on your behalf. You can free up time and resources to explore the business opportunities in Singapore and magnify the scale of your business. Talk to us to resolve your doubts.
Professional Employer Organization (PEO)
A professional employer organization (PEO) renders similar services offered by EOR solutions company. The key difference is that a PEO acts as a co-employer of your remote team and manages all human resources activities while you remain the legal employer, whereas an EOR besides handling all human resources operations becomes the legal employer of your employees and the liability of employees lies with them.
Skuad offers EOR solutions. You may opt for a PEO or an EOR depending on the level of involvement you prefer in human resources operations. Book a demo for comprehensive support and guidance.
Conclusion: What Gives Skuad’s Singapore Solutions an Edge?
Skuad has carved a niche in the EOR solutions industry for itself with its highly professional and successful services. Skuad has the required expertise and experience to assist you in amplifying the scale of your business in Singapore. Learn more about Skuad’s synchronized approach to give an impetus to your business and widen its horizons.
Talk to us for enhanced support regarding HR management in Singapore with our holistic EOR solutions.
FAQs for EOR in Singapore
1) What is an employer of record in Singapore?
Employer of Record (EOR) helps you legally hire Singaporean talent without setting up a local entity. An EOR, like Skuad, legally hires your employees and handles payroll, taxes, and mandatory contributions to Singapore's social security system (CPF). EORs in Singapore ensure compliance with labor laws, minimizing legal risks associated with international recruitment.
2) What is an EOR agreement?
An Employer of Record agreement formalizes the partnership between an EOR service provider and your company. The agreement states the the EOR's legal employment responsibilities for your global staff which include tasks like payroll processing, tax withholding, and benefits administration.
3) What is the employer of record for international employees?
Employer of Record services help companies seeking to leverage international talent pools. They take up legal employer responsibilities in your target market, eliminating the need for a local entity.
4) What is the difference between employer of record and PEO?
An employer of record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) merely co-employs staff, sharing responsibilities with the client company but demands the client to have a local entity.
6) Why use an EOR?
An EOR simplifies and speeds up global hiring in a cost-effective way without needing a local entity. They act as the legal employer for your international talent, handling HR complexities like payroll, taxes, and compliance.
7) Is employer of record legal in Singapore?
Yes, utilizing an Employer of Record (EOR) service is completely legal in Singapore. EOR services operate in compliance with local employment laws and regulations to provide businesses with a hassle-free way of employing staff in the country. It's a legitimate and widely recognized practice that ensures all legal and HR responsibilities are managed effectively.
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