Employer of record in Singapore

Singapore is a challenging job market to break into. Hiring is fiercely competitive, and highly skilled workers are in high demand. However, there are ways for companies to improve their chances of finding the right candidate in Singapore, which ranks high as a hub of digital talent expertise.

Partnering with an employer of record (EOR) service provider in Singapore can make the hiring process easier. EORs handle all the HR responsibilities, including payroll, taxes, benefits administration, and compliance with local labor laws, allowing you to focus on growing your business and finding top talent in the country.

Singapore at a glance

1. Population: 5.9 million people.
2. Major business sectors: Technology, finance, healthcare, logistics.
3. Business language: English (widely used in business).
4. Key economic position: Asia-Pacific business hub.

An EOR in Singapore helps international companies access this strategic market without the complexity of establishing a local entity or dealing with competitive hiring challenges.

Key considerations for hiring in Singapore

When expanding, companies face several unique challenges that make partnering with an EOR in Singapore essential for success.

Fair consideration framework

Singapore's Fair Consideration Framework reflects a commitment to equitable employment practices. Mandating fair hiring practices ensures a level playing field for all job seekers, fostering diversity and meritocracy in the workforce.

This contributes to the overall competitiveness and resilience of the economy and strengthens Singapore's position as a hub for talent and business excellence.

An EOR in Singapore ensures your hiring practices adhere strictly to the Fair Consideration Framework, reducing compliance risks and helping you build a diverse, merit-based workforce that meets Singapore's employment standards.

Advanced technology and skilled workforce

Singapore stands out to international businesses for its advanced technology, one of Asia's highest English proficiency levels, and a highly educated workforce. Companies, particularly in the technology, finance, and healthcare sectors, are drawn to Singapore for its stable economy and easy hiring of software engineers, financial analysts, and medical practitioners.

Singapore has a highly educated STEM-focused workforce, with world-class universities producing skilled finance, IT, and engineering professionals.

An EOR in Singapore provides access to this highly skilled talent pool through established recruitment networks and deep market knowledge. They help you position your company competitively against other employers seeking the same top-tier professionals in Singapore's demanding job market.

Complex hiring laws

Employers must work through the comprehensive legal framework governing employment practices, including the Employment Act, Central Provident Fund (CPF) Act, and Work Injury Compensation Act (WICA), to ensure compliance and avoid legal liabilities.

Working through Singapore's complex legal framework, including the Employment Act, CPF Act, and WICA, becomes much easier when partnering with an EOR in Singapore, as they assume full responsibility for compliance with all employment regulations.

Singapore employer of record (EOR) vs. entity

Employer of record

An EOR in Singapore handles payroll, taxes, benefits administration, and other HR tasks. It has full employer responsibilities, including payroll processing, tax filing, managing employee benefits, and adhering to labor laws.

Pros

• You get a quick and easy setup.
• There is compliance with laws and regulations handled for you.
• You have reduced employer responsibilities.
• There is flexibility and scalability.
• You can test the market or hire a small team easily.

Cons

• There are higher ongoing costs.
• You have less direct control over HR.
• There are potential limitations on branding and culture.

Legal entity

A legal entity in Singapore is any business structure recognized by law as separate from its owners. This means you have complete control over your business operations in Singapore.

Pros

• You have greater control over HR and employee management.
• There is a more substantial local presence and company culture.
• You get potential for lower long-term costs with a large team.

Cons

• Setting up is complex and time-consuming.
• You have full responsibility for compliance.
• There are increased employer liabilities.
• You face higher upfront and maintenance costs.
• It may not be cost-effective for short-term or small-scale hiring.

Work permits in Singapore

If you're looking to hire a foreign national to work in Singapore, you must apply through the Ministry of Manpower. This government agency is responsible for administering work passes in Singapore.

The Immigration and Checkpoints Authority handles the actual issuance of work visas once the MOM approves the work pass application.

The most common types of work permits include:

• Employment pass (EP): For professionals with at least a university degree and a minimum monthly salary of S$4,500.
• S pass: For skilled workers with relevant qualifications and work experience, with a minimum monthly salary of around $2,500.
• Work permit: For foreign workers in manual or semi-skilled labor occupations, typically sponsored by the employer.
• EntrePass: This is for foreign entrepreneurs looking to establish a business in Singapore.

Processing requirements:

• Valid employment contract with a Singapore company.
• Minimum salary thresholds based on pass type.
• Educational qualifications and professional credentials.
• Health certificates and background checks.
• Employer sponsorship and quota allocations.

An EOR in Singapore can make the complex work permit application process easier, assisting with documentation and liaison with the Ministry of Manpower to secure the necessary passes for your foreign hires quickly and efficiently.

Using an EOR for payroll and taxes in Singapore

Payroll cycle: Monthly

13th salary: Yes

• Income tax rates: Progressive from 0% to 24% (for high earners).
• CPF contributions: Employer 17%, Employee varies by age.
• Foreign Worker Levy: Varies by nationality and sector.

Tax breakdown:

1. Individual income tax: Progressive rates up to 24%.
2. Central Provident Fund (CPF): Mandatory social security contributions.
3. Skills Development Levy: 0.25% of payroll (for companies with monthly payroll exceeding $750,000).
4. Foreign Worker Levy: Additional cost for hiring foreign workers.

Unique payroll considerations:

Using foreign workers might require companies to pay the government a Foreign Worker Levy (FWL). The amount depends on the worker's nationality, salary, and sector. Companies need to factor this levy into their payroll as it adds to the cost of hiring foreign workers.

An EOR in Singapore handles all payroll calculations, CPF contributions, tax withholdings, and Foreign Worker Levy payments, ensuring accurate and timely processing while maintaining full compliance with Singapore's tax authorities.

» Learn more about payroll in Singapore

Minimum wage

Instead of a national minimum wage policy, Singapore offers a program known as Workfare. It aids low-income workers (Singapore citizens) aged 35 and above, earning a gross monthly income of no more than 2,300.00 SGD.

Market considerations

1. A highly competitive job market requires attractive packages.
2. English proficiency commands premium salaries.
3. The technology and finance sectors offer the highest compensation.
4. Foreign talent often commands higher salaries due to competition.

An EOR in Singapore provides current market salary data and helps you create competitive offers that attract top talent while managing costs effectively in Singapore's competitive employment market.

EOR employment contract/agreement

When drafting an employment agreement, EORs in Singapore include the following essential items:

• Employee and employer information
• Job title, department, and reporting structure
• Compensation and benefits, including base salary and bonus structure
• Start date and probation period
• Working hours and overtime expectations
• Leave entitlements, considering Singapore's generous leave allowances
• The notice period for termination
• Confidentiality and intellectual property rights clauses
• Dispute resolution procedures and governing law (Singaporean law)

Employment contract requirements:

• A written contract must be issued within 14 days of employment start.
• Must include key employment terms as specified by the Employment Act.
• Probation periods typically last 3-6 months (not legally required but common).
• Working hours not exceeding 8 hours daily or 44 hours weekly.
• Clear termination notice periods based on length of service.

An EOR in Singapore ensures all employment contracts meet local legal requirements while protecting your company's interests through proper IP clauses and confidentiality agreements that comply with Singapore's business practices.

Mandatory employee benefits

• Central Provident Fund (CPF) contributions.
• MediSave (a component of CPF for healthcare needs).
• Work Injury Compensation Insurance.

Leave entitlements:

• Paid annual leave: Minimum of 7 working days after completing one year of service.
• Paid sick leave: Reasonable duration based on doctor's recommendation.
• Maternity leave: At least 60 days for female employees.
• Paternity leave: 2 days for fathers.

Additional entitlements:

• Study leave for approved training programs.
• Public holiday compensation when working.

Additional leave entitlements, such as compassionate leave or childcare leave, may be provided based on company policies.

The Singaporean EOR ensures all employees receive mandatory benefits while managing CPF enrollments, MediSave contributions, and compliance with Singapore's generous leave policies.

Non-disclosure agreements

Although Singapore lacks a law dedicated to non-disclosure agreements (NDAs), entities can enforce confidentiality obligations through contractual clauses within broader agreements, such as employment or service agreements. These clauses must be clear, specific, and reasonable in scope to be enforceable.

Singapore NDA considerations:

1. Must be reasonable in scope and duration.
2. Should protect legitimate business interests.
3. Cannot prevent employees from earning a livelihood.
4. Must be clearly defined and specific.
5. Enforceable through contract law principles.

Public holidays

• New Year's Day – January 1
• Chinese New Year – February 10
• Chinese New Year – February 11
• Good Friday – March 29
• Hari Raya Puasa – April 10
• Labor Day – May 1
• Vesak Day – May 22
• Hari Raya Haji – June 17
•  National Day – August 9
• Deepavali – October 31
• Christmas Day – December 25

Using an EOR to onboard employees in Singapore

Before the first day

• The EOR in Singapore handles pre-employment tasks, such as collecting new hire information, verifying references, and assisting with work visas.
• They ensure the employment contract complies with Singaporean labor laws and includes mandatory benefits.
• The EOR drafts or reviews the offer letter.
• They'll centralize onboarding documentation and compliance requirements using an HR integration system.

The first day

• EOR facilitates a smooth arrival process, including introductions, IT setup, and workspace familiarization.
• The EOR in Singapore provides compliance training on company policies, safety regulations, and Singaporean labor laws.

The first week

• The EOR is the initial point of contact for questions about benefits, payroll, and company policies.
• The EOR HR system may provide essential tools for goal-setting and performance management.

Beyond the first week

• The Singaporean EOR continues to be a resource for employees regarding HR-related inquiries.
• The EOR HR system may provide access to basic company-specific training modules or resources.

How EORs protect companies' IP in Singapore

An EOR in Singapore safeguards your intellectual property by:

• Including confidentiality and non-disclosure clauses in employment contracts.
• Providing employee training on IP protection and maintaining confidentiality.
• Implementing strict data security protocols to prevent unauthorized access or disclosure of sensitive information.
• Ensuring compliance with Singapore's IP protection laws, such as the Patents Act, Trade Marks Act, and Copyright Act.
• Taking prompt action on any suspected or actual IP violations, including disciplinary measures or legal action.

Singapore IP protection framework:

• Strong intellectual property laws and enforcement.
• The Patents Act protects inventions and innovations.
• The Trade Marks Act covers brand protection.
• The Copyright Act safeguards creative works.
• Trade secrets protection through employment contracts.

The EOR in Singapore ensures all employment contracts include comprehensive IP protection clauses, manages confidentiality agreements, and works with local legal experts to safeguard your intellectual property under Singapore's robust legal framework.

» Shield your company and master payroll risk management

How EORs comply with local labor laws in Singapore

EORs in Singapore must adhere to the Employment Act provisions on working hours, overtime pay, leave entitlements, and termination notice periods. In Singapore, it's essential to plan employee contributions like the CPF and WICA.

The EOR will also implement measures to protect employees' data in compliance with the Personal Data Protection Act (PDPA). They'll also adhere to tripartite guidelines on fair employment practices and handling workplace harassment.

Employment law compliance areas

• Employment Act provisions on working conditions.
• Central Provident Fund (CPF) contributions and management.
• Work Injury Compensation Act (WICA) requirements.
• Personal Data Protection Act (PDPA) compliance.
• Fair Consideration Framework adherence.
• Tripartite guidelines on employment practices.

The EOR in Singapore maintains expertise in all compliance areas, monitors regulatory changes, and ensures your company meets all legal obligations while building positive employee relationships in Singapore's regulated environment.

» Reach out to a country expert to learn more about hiring in Singapore

Offboarding employees in Singapore

Terminating employees through an EOR in Singapore means following careful steps to ensure the process is fair.

• Providing the minimum notice period as specified in the Employment Act based on the employee's length of service.
• Paying severance to eligible employees who have been employed for at least two years, unless termination is due to misconduct.
• Offering retrenchment benefits, such as wage supplements or employment assistance payments, in cases of redundancy.
• Ensuring that terminations are based on valid grounds and not for discriminatory reasons.
• Following fair and proper procedures, including providing opportunities for the employee to respond to allegations and conducting investigations if necessary.
• Completing exit formalities, such as recovering company property, settling outstanding payments, and issuing relevant documents for a compliant termination process.

Notice period requirements:

• 1 day to 4 weeks based on length of service.
• Payment in lieu of notice is permissible.
• The same notice period applies to both the employer and the employee.
• Immediate termination is allowed for willful breach of contract.

Severance considerations:

• No statutory severance pay requirements.
• Severance must be specified in the employment contract.
• Retrenchment benefits may apply in redundancy cases.
• Fair termination procedures must be followed.

The EOR in Singapore manages all termination procedures compliantly, ensures proper notice periods, handles final payments, and maintains documentation to minimize legal risks while protecting your company's reputation.

Use an EOR to start hiring in Singapore today

Singapore offers exciting opportunities as Asia's leading business hub, but the competitive job market and complex employment laws create challenges. You can work through these effectively by partnering with Papaya Global's EOR in Singapore.

You get essential market expertise through our in-country professionals who understand Singapore's competitive landscape and regulatory requirements. With Papaya Global's EOR solution, you can access top talent quickly, while our platform provides real-time compliance monitoring and transparent cost management.

You can confidently expand into Singapore using Papaya Global's EOR solution without establishing a local entity. Focus on growing your business while we handle the complex regulations, competitive hiring strategies, and ongoing compliance requirements that make Singapore successful.

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