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Employing in Singapore

At a glance

Employment in Singapore

Foreign companies that employ workers in Singapore face several challenges and must adhere to the legal and regulatory framework that is in place. Some regulations only apply to local employees and not foreigners, such as social security fund contributions. In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well. Our guide explains Singapore policies on leave, termination and payment of benefits.

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Payroll & Tax in Singapore

Complying with local payroll and tax requirements is essential for a company doing business in Singapore. Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation. Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

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Immigration / Work Permits in Singapore

Foreign workers are required to have the proper visas and work permits in Singapore, as established by immigration laws. This often requires incorporation and licensing prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly. The most common business visa is Entrepreneur Pass for new businesses.

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Incorporation

There are several business structures available for incorporation in Singapore, and each has advantages and disadvantages. In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity. Our guide has a comparison of the time and cost for incorporating standard company structures including Rep Office, Branch Office and Subsidiary Company.

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GEO Solutions or DIY Employment in Singapore?

Companies entering Singapore must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Singapore Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a registered Singapore entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated Branch Office or Subsidiary ready to run payroll and will include the cost of registered capital. The Shield GEO Solution is already properly incorporated in Singapore, it has an active payroll and it is setup to sponsor work permits. This greatly reduces deployment times. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in Singapore. Companies expanding into Singapore can contract with Shield GEO to employ and payroll their staff on their behalf in Singapore. Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Using Shield GEO Employer of Record Services in Singapore

Payroll Singapore
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO, as the Employer of Record, will pay the employee on a monthly basis. Shield will deduct social security  – where employers contribute 16% of gross salary and employees contribute 20% of gross salary (up to the relevant caps) into the CPF. They also deduct income tax – which is progressive and varies from 0-20% (Non-residents pay 15% on employment income and 20% on director’s fees, consulting fees and other income) pendant on salary level. These deductions are made at source and paid to the Singapore tax authorities. Candidates are able to offset their taxable income with relevant business expenses. The World Bank estimates it takes employers in Singapore 10 man days to ensure compliance with payroll and labour taxes each year.

 
Grossed income Tax Rate (%)
0-$20,000 0
$20,000-$30,000 2
$30,000-$40,000 3.50
$40,000-$80,000 7
$80,000-$120,000 11.50
$120,000-$160,00 15
$160,000-$200,000 17
$200,000-$320,000 18
$320,000+ 20
Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

N/A for expatriates. 16% for Singaporean nationals and Singapore permanent residents. Note this is capped at $800 SGD per month. As of 1st Jan 2016 the ceiling will increase to $960 per month.

Employees Social Security and statutory contributions

N/A for expatriates. 20% for Singaporean nationals and Singapore permanent residents. Capped at $1000 per month. Note that as of 1st Jan 2016 this will increase to $1200 a month.

Insurance requirements

Medical Insurance is not compulsory but recommended.

Corporate Income Tax Rate

17%

Payroll Tax

N/A

Sales Tax

7%

Withholding Tax

N/A for resident companies

Work Permits
Can Sponsor Work

Yes, Shield GEO’s local Singapore entity is able to sponsor foreign workers on Work Permits (Employment Passes) which allow them to work in Singapore. As the Employer of Record, Shield GEO handles all of the formalities and employment requirements in Singapore. The client maintains responsibility for day to day employee management.

Work Permit cost

$2000 USD

Work Permit processing time

1-2 weeks

Work Permit process

Shield GEO’s local Singapore entity applies for the Employment Pass. The Singapore Ministry of Labour issues an In-Principle Approval (IPA), then the Issuance of Notification Letter is issued on arrival in Singapore online. The employee then registers their Biometric Data (in country) and then a Long Term Pass is issued.

Documentation required: CV, passport photos, copy of the personal page of the passport, copies of degree certificates, employment contract.

Can Work Permit be processed in country

No

Switch Business Visa to Work Permit?

No

Can Spouse work on dependent visa?

Yes

Business Visas
Can do Business Visa

Yes

Business Visa Cost

USD $400

Business Visa processing time

5-10 days Consulate Dependent

Others
Can supply private health care

Yes

Can assist opening bank accounts

Yes

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5 Changes in Immigration Policies for Workers on Assignment
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