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Looking to Hire an Employee in Singapore?

There are many things you will need to know before you hire in Singapore but here’re our top 3:

1.     Employment in Singapore

Employer and Employee Social Security in Singapore

The Central Provident Fund for social security contributions is only mandatory for citizens and residents of Singapore.  Therefore, work permit holders do not need to contribute or have the amount deducted from the payslip, and there is no employer contribution required.

2.     Tax in Singapore

Tax Rates in Singapore

Tax rates range from 0-22% in Singapore, depending on income and after deductions.

Corporate Tax in Singapore

The corporate tax rate in Singapore is 17% of taxable profit.

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3.     Payroll in Singapore

Social Security Registration

This is not required for expat workers, since they don’t have to make contributions.  However, if an expat were to work in Singapore more than 183 days per year, they could be considered permanent residents, and then both employer and employee registration and contributions would be required.

13th/14th month bonus

It is a common practice to give employees a 13th month bonus (or more) in Singapore each year.  However, it is discretionary and not required by statute.

It’s going to be hard to employ someone remotely. Here’s what else you should be worried about:

The risk of non-compliance is very high, especially when employing in a new country like Singapore

Employing in an unfamiliar country like Singapore can be overwhelming. The burden and risk of non-compliance is all on you and your company and you need to be careful when navigating the employment and tax laws of Singapore. The information you’re looking at may be inaccurate, outdated or in another language. The consequences of non-compliance in Singapore are far too high to not invest time and money in thoroughly understanding the Singapore jurisdiction.

Involving tax and immigration providers early is the number 1 most preferred method to manage compliance risks for companies, with 72% stating that they are focusing on outsourcing these services early on in the assignment.

There are many hidden costs that you may have overlooked

When employing in Singapore, it is highly like that you may fail to factor in some costs involved while estimating a budget for the assignment. Usually, these costs occur during the course of employment and tend to be country-specific. They are often unpredictable and unavoidable resulting in the assignment being far more expensive than the business intended it to be. Hiring just one employee in Singapore doesn’t justify the effort and cost it takes for a company to learn everything from scratch about employing in Singapore.

Outsourcing services is the most preferred way for global mobility professionals to contain costs with 71% stating that they have already made outsourcing changes in an effort to maximise cost savings. Unsurprisingly, outsourcing is preferred over reducing the number of assignments/transfers or improving in-house administrative processes as a method to save costs.

These considerations are common when hiring an employee in any new country. In our years of experience employing in Singapore we have helped our clients with several other problems specific to Singapore. Here’re a few examples:

Other Issues Our Clients Have Encountered When Employing in Singapore

Work Permits and Visas in Singapore

There are a number of different work visas available in Singapore and a full list of visa types and required documents can be found here

One of the core requirements now being enforced more strictly is the rule that an employer with more than 25 employees has to advertise the position to locals before applying for a visa for a foreign worker.

This increasing restriction of work visas has led to delays in processing times, as the immigration authorities have increased scrutiny while reviewing applications.  Online applications that used to take one week for the most popular work permit the Employment Pass, will now take up to three weeks.  In person applications can take longer than 5 weeks.

Paid Leave Time in Singapore

There is an array of statutory paid leave for all employees in Singapore including:

  • Seven days of annual leave per year, with an additional day for every year of service
  • All public holidays
  • Six days of paid childcare leave
  • Fourteen days of paid sick leave
  • Sixty days of paid hospitalization leave
  • Sixteen weeks of maternity leave, with a minimum of eight weeks paid

Even expats are entitled to these minimum leave periods, and more leave may be provided in the employment contract if desired.

No PAYE System for Payroll

Employees are responsible for their own tax payments, and the typical PAYE system is not required for tax deductions from the monthly pay check.  However, in the event of employee termination or resignation, the employer must file a tax clearance return to ensure full payment of taxes due to date.

Work Permit Exemptions for Short Visits

Work Pass Exemptions (WPE) are issued for certain activities that are short term and limited to less than 90 days per calendar year (30 days per stay).  For a full list of exempted activities, you can look at the Singapore immigration website. 

The Employer of Record Solution

As you can see from this overview, the process of hiring even one employee in Singapore can be a real challenge for any HR department.  This is why the Shield GEO Employer of Record (EOR) solution is a cost-effective and simple way to address your payroll, tax and immigration requirements.  The EOR becomes the legal employer of your worker in Singapore, with a registered entity that is already in place and prepared to take care of your employment needs.

Our team members can offer personal service, quick communication and the expertise of our regional partners to ensure that our EOR service is delivered seamlessly to support your staff assignments.  We do have account managers and a principal office in Asia-Pacific, giving your HR department regional support for Singapore employment.

Here is a quick summary of what you can expect from your Shield GEO regional account manager:

  • A single point of contact for all employee or HR issues and questions
  • Advice on changes in legislation
  • Assistance with meeting Singapore’s requirements for the employment contract
  • Obtaining visas and work permits sponsored by our Singapore EOR
  • Full compliance with Singapore payroll, immigration and employment laws
  • Monthly payroll and employment administration

For an HR department located in the home country, the Shield GEO team becomes a local, dedicated resource to handle every aspect of your employee assignments.  This allows you to focus on supporting your staff’s project and performance needs, while we take care of the multiple employment administration tasks for you.

Need help hiring an employee in Singapore? Get in touch! 

Considering employing workers in Asia?

 Need more information about employing in a new country? Learn more about:

Looking for a better way to employ someone in a new country? Get in touch.

The information in this article is subject to changes in local legislation.

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