Rivermate | Singapore flag


399 EUR per employee per month

Discover everything you need to know about Singapore

Hire in Singapore at a glance

Here ares some key facts regarding hiring in Singapore

Singapore Dollar
GDP growth
GDP world share
Payroll frequency
Working hours
44 hours/week

Overview in Singapore

Read more

Singapore is a densely populated island nation strategically located near major shipping lanes, which has helped it become a global trade hub. Originally a British trading post, it gained independence in 1965 and has since transformed into a high-income developed economy under the disciplined leadership of Lee Kuan Yew and the People's Action Party. The country's economy is service-driven with key sectors including finance, trade, and high-tech manufacturing. Singapore boasts a multicultural society with a strong emphasis on education, particularly in STEM fields, and a workforce that includes a significant number of foreign-born residents. The government promotes continuous upskilling and productivity to cope with an aging population and tight labor market. Work culture in Singapore values harmony and indirect communication, with a respect for hierarchy and seniority. The nation continues to attract global talent to maintain its competitive edge in innovation and technology.

Rivermate | bulb icon

Get a payroll calculation for Singapore

Understand what the employment costs are that you have to consider when hiring Singapore

Employer of Record in Singapore

Rivermate is a global Employer of Record company that helps you hire employees in Singapore without the need to set up a legal entity. We act as the Employer of Record for your employees in Singapore, taking care of all the legal and compliance aspects of employment, so you can focus on growing your business.

How does it work?

When you hire employees in Singapore through Rivermate, we become the legal employer of your staff. This means that we take on all the responsibilities of an employer, while you retain the day-to-day management of your employees.

You as the company maintain the direct relationshiop with the employee, you allocate them the work and manage their performance.
Rivermate takes care of the local payrolling of the employee, the contracts, HR, benefits and compliance.

Responsibilities of an Employer of Record

As an Employer of Record in Singapore, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Singapore

Read more

In Sint Maarten, employers are responsible for withholding income taxes based on employees' income brackets and contributing to social security programs, including Old Age Security, Widows and Orphans Insurance, Health Insurance, and Accident Insurance. Employers should consult with a tax advisor to ensure compliance with these obligations.

In Singapore, employee tax deductions include Central Provident Fund Contributions, which vary by age and salary, and Personal Income Tax, which applies to individuals earning above a certain threshold with a progressive rate up to 22%. Additional deductions may apply for donations and the Foreign Worker Levy.

Singapore businesses must register for GST if their taxable turnover exceeds SGD 1 million, with voluntary registration available for smaller businesses. They must file GST returns quarterly and can claim credits for GST paid on business-related purchases. The country offers various tax incentives to attract businesses, including competitive corporate income tax rates, investment allowances, and sector-specific benefits for maritime and financial activities. Special tax breaks are also available for startups and SMEs to support their growth and development.

Leave in Singapore

Read more

In Singapore, employees start with 7 days of paid annual leave in their first year, which can increase up to 14 days based on the length of service. Leave for those who haven't completed a year is prorated. Key considerations include continuous employment for eligibility, generally no carryover of unused leave unless specified by company policy, and employer-scheduled leave considering employee preferences and operational needs. Public holidays include secular and religious days, with dates for religious holidays varying annually according to different lunar calendars. Other types of leave include sick leave, maternity leave, paternity leave, childcare leave, and shared parental leave, each with specific entitlements under the Employment Act and related legislation. Employers may offer more generous leave provisions than those mandated by law.

Benefits in Singapore

Read more

Singapore's employment benefits system is designed to provide a secure work environment and attract a skilled workforce, as mandated by the Employment Act. Key aspects include:

  • Paid Leave: Employees are entitled to annual leave, sick leave, and paid public holidays.
  • Central Provident Fund (CPF) Contributions: Both employers and employees contribute to CPF, which includes accounts for housing, retirement savings, and medical expenses. Foreign employees are not required to contribute but may opt into voluntary schemes.
  • Paternity Leave: Fathers receive two weeks of paid paternity leave.
  • Workplace Safety and Health: Employers must ensure a safe working environment and comply with safety regulations.
  • Work Injury Compensation: Employers must insure employees under the Work Injury Compensation Act for work-related injuries or illnesses.

Additionally, employers may offer optional benefits such as private health insurance, wellness programs, flexible work arrangements, performance-based bonuses, and support for childcare and eldercare. These benefits are not mandatory but can help companies attract and retain talent.

The CPF system is central to retirement planning, with contributions split into accounts for different purposes and a gradual increase in the minimum retirement age. Employees can enhance their retirement savings through voluntary top-ups and government matching grants.

Workers Rights in Singapore

Read more

In Singapore, the Employment Act outlines the conditions for terminating employment, which can be initiated by either the employer or the employee. Lawful termination can occur through mutual agreement, employee resignation, the expiry of a fixed-term contract, retirement, redundancy, or misconduct. Notice periods vary based on the length of service, ranging from one day to four weeks, and severance pay is generally not mandatory unless specified by contract or in cases of redundancy.

The country's legal framework also addresses workplace discrimination, although it does not yet cover all forms of discrimination comprehensively. Protections exist against discrimination based on race, religion, gender, marital status, age, and disability, primarily enforced by the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP). Complaints can be addressed through TAFEP, the Employment Claims Tribunals, or legal action.

Employers are responsible for ensuring a discrimination-free workplace, promoting diversity, and providing training on anti-discrimination policies. Singapore plans to introduce broader anti-discrimination legislation by 2024.

Regarding work conditions, the standard workweek is 44 hours, with regulations allowing for flexible schedules and overtime pay. Employees are entitled to rest periods and annual leave, and ergonomic guidelines are promoted to prevent work-related injuries.

Employers must maintain a safe work environment, conduct risk assessments, provide necessary training and equipment, and report and investigate accidents. Employees have rights to a safe workplace, necessary safety information, and can refuse unsafe work. The Ministry of Manpower and the Workplace Safety and Health Council enforce these regulations, ensuring compliance and promoting safety practices.

Agreements in Singapore

Read more

In Singapore, employment agreements are divided into two primary types: Permanent Employment Contracts and Fixed-Term Employment Contracts, each serving different purposes.

Permanent Employment Contracts:

  • Indefinite term: No predefined end date, continues until terminated by either party.
  • Regulation: Adheres to the Employment Act, ensuring protection of fundamental employee rights.

Fixed-Term Employment Contracts:

  • Specified term: Clearly defined end date, used for temporary, seasonal, or project-based roles.
  • Termination: More complex to terminate before the end date compared to permanent contracts.

Key Clauses in Employment Agreements:

  • Identification of parties, job description, remuneration, benefits, working hours, and termination details.
  • Special clauses like confidentiality and intellectual property rights are crucial for protecting business interests.

Probation Periods:

  • Typically range from 3 to 6 months, allowing both employer and employee to assess suitability.
  • Terms should be clearly stated in the employment agreement, with usually shorter termination notice periods during probation.

Confidentiality and Non-Compete Clauses:

  • Aim to protect sensitive business information and prevent competition from former employees.
  • Enforceability depends on the reasonableness and necessity to protect legitimate business interests.

Legal Framework:

  • Singapore's legal system provides guidelines to ensure these clauses do not unfairly restrict an employee's future employment opportunities.
  • Upcoming guidelines from the Ministry of Manpower (expected in 2024) will likely refine the enforceability of non-compete clauses.

Remote Work in Singapore

Read more

Singapore has become a key center for remote work in Southeast Asia, with its legal and technological frameworks supporting this shift. The Employment Act, while not specifically addressing remote work, provides a foundation of rights and obligations that apply to remote workers. Employers are responsible for ensuring compliance with these laws, providing necessary technological infrastructure, and fostering a productive work environment. This includes addressing cybersecurity, ergonomic setups, and establishing clear remote work policies.

Singapore's flexible work options such as part-time work, flexitime, and job sharing are supported by the Employment Act, though specific implementation details are left to employer discretion. The Personal Data Protection Act (PDPA) plays a crucial role in ensuring data privacy for remote workers, mandating employers to adhere to strict data protection and privacy measures.

As remote work continues to evolve, maintaining robust data security, clear communication, and a culture of trust are essential for companies to attract and retain talent. Employers must stay updated on legal and technological changes to ensure both compliance and competitiveness in the remote work landscape.

Working Hours in Singapore

Read more

In Singapore, the Ministry of Manpower (MOM) regulates working hours through the Employment Act, which covers both standard contractual working hours and alternative work arrangements.

Contractual Working Hours

  • Employees typically work Monday to Friday, with daily hours capped at 8 for a five-day week and 9 for a six-day week.
  • Weekly working hours are limited to 44, excluding breaks.

Alternative Work Arrangements

  • Flexi-time allows for up to 48 hours in a week, not exceeding 88 hours over two weeks, with employee consent.
  • Shift work can extend up to 12 hours daily, averaging 44 hours over three weeks, with necessary written consent and clear communication.

Overtime and Pay

  • Overtime is any work beyond contracted hours, with a monthly cap of 72 overtime hours.
  • Eligible employees (non-managers earning below certain thresholds) receive overtime pay at 1.5 times their hourly rate, paid within 14 days post the salary period.
  • Working on rest days or public holidays entitles employees to double their daily pay rate, plus any overtime.

Rest Periods and Breaks

  • Employees must receive breaks after six consecutive hours of work, and meal breaks totaling at least 45 minutes for eight continuous hours of work.
  • Employees are entitled to one rest day per week, typically a 24-hour period on Sunday, and for shift workers, a continuous 30-hour rest period.

Night Shifts and Weekends

  • The same working hour limitations apply, with overtime paid at 1.5 times the hourly rate for extra hours.
  • Employers are advised to manage night shifts carefully to minimize health impacts and ensure adequate rest.

Overall, the Employment Act ensures that employees in Singapore have regulated working hours, overtime compensation, and adequate rest, with provisions for flexible arrangements as needed.

Salary in Singapore

Read more

Understanding a market competitive salary in Singapore involves considering various factors such as job responsibilities, industry standards, and location. Salaries vary across different sectors, with finance and technology generally offering higher wages compared to other industries. Reliable salary data can be sourced from the Ministry of Manpower and reputable recruitment agencies.

In addition to salary, other elements like benefits, company culture, and growth opportunities play a crucial role in the overall compensation package. Singapore does not have a universal minimum wage, but it regulates minimum salaries for foreign workers through work passes, ensuring fair compensation.

Performance-based incentives and allowances are also significant, with some companies offering bonuses, profit sharing, and allowances for housing and mobile phone expenses to offset the high cost of living in Singapore. Employers must adhere to the Employment Act, ensuring timely salary payments through preferred methods like electronic bank transfers and providing detailed payslips to maintain transparency.

Termination in Singapore

Read more

In Singapore, the Employment Act governs the notice periods required for employment termination, which should align with the terms set in the employment contract. If unspecified, statutory minimums range from 1 day for less than 26 weeks of service to 4 weeks for 5 years or more. Termination notices must be in writing to avoid disputes, and compensation equivalent to the notice period's salary is required if notice is not served. Probationary periods allow for shorter notices, and fixed-term contracts do not require notice upon expiry. Severance pay, while not mandated by law, is common after two years of service, with amounts varying by company policy and individual contracts. Misconduct can lead to immediate dismissal without notice, but a fair inquiry must precede such action. Retrenchment for business reasons must be reported to the Ministry of Manpower if it affects five or more employees within six months. Constructive dismissal claims require proof of intolerable work conditions forced by the employer. Overall, termination processes must adhere to contractual terms and be carried out fairly, with procedural guidelines followed closely.

Freelancing in Singapore

Read more

In Singapore, the distinction between employees and contractors is crucial as it affects their rights and obligations under employment law. The classification is based on factors such as the degree of control over work, the nature of the contract, integration into the business, and financial risk.

Legal Implications:

  • Employees are protected under the Employment Act, receiving benefits like minimum notice periods, CPF contributions, and protection from wrongful dismissal.
  • Contractors operate under specific contract terms without entitlement to Employment Act benefits but can deduct business expenses for tax purposes.

Contract Structures for Independent Contractors:

  • Fixed-Price Contracts: Payment for specific tasks with clear deliverables.
  • Time-Based Contracts: Payment based on time spent on the project.
  • Milestone-Based Contracts: Payments are made at predetermined project milestones.

Negotiation Practices:

  • Contractors should clearly define the scope of work, payment terms, and project deliverables to avoid misunderstandings.

Common Industries for Independent Contractors:

  • IT, creative industries, marketing, communications, and professional services like law and accounting.

Intellectual Property (IP) Rights:

  • Freelancers generally own the IP of their work but can transfer rights through specific contractual agreements.

Tax Obligations:

  • Freelancers must file income tax if annual profits exceed S$6,000 and register for GST if turnover exceeds S$1 million.

Insurance Options:

  • Freelancers can opt for private health insurance and are encouraged to contribute to their Medisave account for medical expenses. Additional insurance like professional indemnity may also be considered depending on the work nature.

Misclassification of employees as contractors can lead to legal and financial penalties, making it essential for both parties to understand and correctly establish their working relationship.

Health & Safety in Singapore

Read more

In Singapore, the Workplace Safety and Health (WSH) Act serves as the primary legislation for health and safety in workplaces, detailing responsibilities for employers, employees, suppliers, and other stakeholders. Employers are mandated to ensure a safe working environment through risk assessments, safety training, and compliance with safety management systems. Employees must adhere to safety procedures and use provided safety equipment. The WSH Act encompasses various safety areas including construction, noise control, and chemical safety.

The Ministry of Manpower (MOM) enforces these regulations through inspections and investigations, with penalties for non-compliance ranging from fines to imprisonment. Regular risk assessments, safe work procedures, and specific measures for high-risk activities like working at heights and handling hazardous chemicals are required. The Workplace Safety and Health Council (WSHC) aids in policy development and compliance enforcement, with initiatives like the BizSAFE Program to enhance workplace safety capabilities.

Workplace inspections are categorized into routine, complaint-based, and incident investigations, focusing on compliance and safety practices. Non-compliance can lead to fines, stop-work orders, or prosecution. In cases of workplace accidents, immediate reporting, thorough investigations, and corrective actions are required, with compensation claims handled on a no-fault basis for injured workers.

Dispute Resolution in Singapore

Read more

In Singapore, labor disputes are managed through the Employment Claims Tribunal (ECT) and the Industrial Arbitration Court (IAC). The ECT, under the Ministry of Manpower, handles individual employment disputes like unpaid salaries and wrongful deductions, offering a process that includes mediation and tribunal hearings. The IAC deals with collective labor disputes involving trade unions and employers, focusing on issues like collective bargaining and unfair dismissal, with a process that includes conciliation and arbitration.

Additionally, Singapore encourages arbitration through the Singapore International Arbitration Centre (SIAC) for its confidentiality and flexibility. Compliance audits and inspections are crucial for maintaining legal and ethical standards, conducted by internal or external auditors, and various government agencies. The frequency and nature of these audits depend on industry-specific regulations.

Non-compliance can lead to severe consequences including fines, loss of licenses, or criminal charges. Singapore provides several mechanisms for reporting violations, including internal whistleblowing policies and regulatory hotlines, although it lacks a comprehensive Whistleblower Protection Act. Protections do exist under specific acts like the Prevention of Corruption Act and the Workplace Safety and Health Act.

Singapore's adherence to international labor standards is selective, reflecting its economic goals and tripartite model. While not all core International Labour Organization (ILO) conventions are ratified, domestic laws like the Employment Act and the Industrial Relations Act align with many ILO principles, ensuring fair labor practices within the country.

Cultural Considerations in Singapore

Read more

Effective communication in Singaporean business environments emphasizes indirectness, formality, and nuanced non-verbal cues, reflecting cultural values of harmony and respect for hierarchy. Singaporeans prioritize efficiency and subtlety in communication, often using titles and structured meetings to convey respect. Non-verbal communication, such as body language, silence, and smiling, plays a crucial role, with each gesture carrying specific meanings.

In negotiations, Singaporeans combine a collaborative approach with competitive bargaining, focusing on long-term relationships and mutual benefits. Preparation, indirect communication, and respect for hierarchy are key strategies. Cultural norms, such as avoiding public humiliation and emphasizing data in decisions, significantly influence negotiation tactics.

Singaporean business culture also features hierarchical structures, deeply rooted in Confucian values, which affect leadership styles, decision-making, and team dynamics. While traditional hierarchies prevail, there is a shift towards flatter structures in newer companies, driven by globalization and changing workforce expectations.

Understanding Singapore's statutory holidays and cultural observances is essential for respecting local traditions and planning business operations effectively. Public holidays and regional observances impact business closures and productivity, necessitating careful scheduling and staffing adjustments.

Frequently Asked Questions for Employer of Record services in Singapore

What options are available for hiring a worker in Singapore?

In Singapore, employers have several options for hiring workers, each with its own set of regulations and requirements. Here are the primary methods:

  1. Direct Employment:

    • Local Employees: Hiring Singaporean citizens or Permanent Residents (PRs) involves standard employment contracts, adherence to the Employment Act, and contributions to the Central Provident Fund (CPF).
    • Foreign Employees: Employers can hire foreign workers through various work passes, such as the Employment Pass (EP), S Pass, and Work Permit. Each pass has specific eligibility criteria, including salary thresholds, educational qualifications, and job roles.
  2. Contractors and Freelancers:

    • Employers can engage independent contractors or freelancers for specific projects or tasks. This arrangement offers flexibility but requires clear contractual agreements to define the scope of work, payment terms, and other conditions. Note that contractors and freelancers are not entitled to employee benefits under the Employment Act.
  3. Temporary or Part-Time Workers:

    • Temporary or part-time employment is another option, especially for roles that do not require full-time commitment. These workers are still covered under the Employment Act, but the terms of employment, such as working hours and benefits, may differ from full-time employees.
  4. Interns and Trainees:

    • Companies can hire interns or trainees, often through structured internship programs or training schemes. These positions are typically short-term and aimed at providing practical experience to students or recent graduates.
  5. Employer of Record (EOR) Services:

    • Using an Employer of Record (EOR) like Rivermate can simplify the hiring process, especially for foreign companies looking to establish a presence in Singapore without setting up a legal entity. An EOR handles all employment-related responsibilities, including payroll, tax compliance, benefits administration, and adherence to local labor laws. This allows companies to focus on their core business activities while ensuring compliance with Singaporean regulations.

Benefits of Using an Employer of Record in Singapore:

  • Compliance: An EOR ensures that all employment practices comply with Singapore's labor laws, reducing the risk of legal issues and penalties.
  • Cost-Effective: Setting up a legal entity in Singapore can be costly and time-consuming. An EOR provides a cost-effective alternative by managing employment without the need for a local entity.
  • Speed and Efficiency: An EOR can expedite the hiring process, allowing companies to onboard employees quickly and efficiently.
  • Local Expertise: EORs possess in-depth knowledge of local employment laws, tax regulations, and market conditions, providing valuable insights and support.
  • Focus on Core Business: By outsourcing HR and administrative tasks to an EOR, companies can concentrate on their core business operations and strategic goals.

In summary, while there are multiple options for hiring workers in Singapore, using an Employer of Record like Rivermate offers significant advantages, particularly for foreign companies seeking to navigate the complexities of local employment laws and regulations.

Is it possible to hire independent contractors in Singapore?

Yes, it is possible to hire independent contractors in Singapore. However, there are several important considerations to keep in mind:

  1. Legal Classification: In Singapore, the distinction between an employee and an independent contractor is crucial. Independent contractors are not covered by the Employment Act, which means they do not receive statutory benefits such as paid leave, public holidays, and overtime pay. It is essential to clearly define the nature of the working relationship in the contract to avoid any misclassification issues.

  2. Contractual Agreement: A well-drafted contract is vital when hiring independent contractors. This contract should outline the scope of work, payment terms, duration of the contract, confidentiality clauses, and any other relevant terms. This helps in setting clear expectations and protecting both parties legally.

  3. Tax Implications: Independent contractors are responsible for their own tax obligations in Singapore. They must register as self-employed with the Inland Revenue Authority of Singapore (IRAS) and file their taxes accordingly. Employers do not need to withhold taxes for independent contractors, but they should ensure that contractors are aware of their tax responsibilities.

  4. Intellectual Property (IP) Rights: When engaging independent contractors, it is important to address IP rights in the contract. Typically, any IP created by the contractor during the course of their work should be assigned to the hiring company. This ensures that the company retains ownership of any proprietary information or creations.

  5. Compliance with Local Laws: While independent contractors are not covered by the Employment Act, they are still subject to other local laws and regulations. For instance, the Personal Data Protection Act (PDPA) governs the handling of personal data, and both parties must comply with its provisions.

  6. Risk Management: Hiring independent contractors can mitigate certain risks associated with full-time employment, such as long-term financial commitments and employee benefits. However, it also introduces risks related to control over the contractor's work and potential disputes over contract terms. Proper risk management strategies, including clear contracts and regular communication, are essential.

Using an Employer of Record (EOR) service like Rivermate can simplify the process of hiring independent contractors in Singapore. An EOR can handle the administrative and compliance aspects, ensuring that all legal requirements are met and reducing the burden on the hiring company. This allows businesses to focus on their core activities while leveraging the expertise of independent contractors.

What is the timeline for setting up a company in Singapore?

Setting up a company in Singapore is known for being a relatively quick and efficient process, thanks to the country's business-friendly environment and streamlined regulatory framework. Here is a detailed timeline for setting up a company in Singapore:

  1. Pre-Incorporation Preparation (1-2 days):

    • Choose a Company Name: Ensure the name is unique and adheres to the guidelines set by the Accounting and Corporate Regulatory Authority (ACRA). You can check the availability of the name on ACRA's online portal.
    • Prepare Required Documents: Gather necessary documents such as identification and proof of address for shareholders, directors, and the company secretary.
  2. Name Reservation (1 day):

    • Submit Name Application: Apply for the company name reservation through ACRA’s BizFile+ portal. The approval process typically takes less than an hour if the name does not contain restricted words or require additional approval from other government agencies.
  3. Incorporation Filing (1-2 days):

    • Submit Incorporation Documents: Once the name is approved, submit the incorporation documents through BizFile+. This includes the company constitution, details of shareholders, directors, and the company secretary, and the registered office address.
    • Pay Incorporation Fees: Pay the required fees for incorporation, which are SGD 15 for name application and SGD 300 for registration.
  4. Incorporation Approval (1 day):

    • Receive Certificate of Incorporation: Upon successful submission and payment, ACRA typically processes the incorporation within a few hours to a day. You will receive an email notification with the Certificate of Incorporation.
  5. Post-Incorporation Tasks (1-2 weeks):

    • Open a Corporate Bank Account: Approach a local or international bank in Singapore to open a corporate bank account. This process can take a few days to a couple of weeks, depending on the bank’s requirements.
    • Register for Goods and Services Tax (GST): If your company’s annual turnover exceeds SGD 1 million, you must register for GST with the Inland Revenue Authority of Singapore (IRAS).
    • Obtain Necessary Licenses and Permits: Depending on your business activities, you may need to apply for specific licenses or permits from relevant authorities.

Overall, the entire process of setting up a company in Singapore can be completed in as little as 1-2 weeks, assuming all documents are in order and there are no delays in approvals. This efficiency makes Singapore an attractive destination for entrepreneurs and businesses looking to establish a presence in Asia.

Using an Employer of Record (EOR) like Rivermate can further streamline this process, especially for foreign companies. An EOR can handle compliance, payroll, and other administrative tasks, allowing you to focus on growing your business without the need to navigate the complexities of local regulations.

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Singapore?

When using an Employer of Record (EOR) like Rivermate in Singapore, the EOR handles the filing and payment of employees' taxes and social insurance contributions. This includes the following responsibilities:

  1. Income Tax Filing and Payment: The EOR ensures that the employees' income taxes are accurately calculated, filed, and paid to the Inland Revenue Authority of Singapore (IRAS). They manage the monthly withholding tax obligations and the annual tax filing requirements, ensuring compliance with Singapore's tax regulations.

  2. Central Provident Fund (CPF) Contributions: The EOR is responsible for calculating and remitting the mandatory CPF contributions for both the employer and the employee. The CPF is a comprehensive social security savings plan that includes retirement, healthcare, and housing benefits. The EOR ensures that contributions are made accurately and on time to the CPF Board.

  3. Skills Development Levy (SDL): The EOR also handles the payment of the SDL, which is a levy imposed to fund workforce upgrading programs. The EOR calculates the levy based on the employees' wages and ensures timely payment to the SkillsFuture Singapore Agency.

  4. Foreign Worker Levy (FWL): If the employees are foreign workers, the EOR manages the payment of the FWL, which is a monthly levy imposed on employers of foreign workers. The EOR ensures compliance with the Ministry of Manpower's regulations regarding the employment of foreign workers.

By using an EOR like Rivermate in Singapore, companies can ensure that all tax and social insurance obligations are met accurately and efficiently, reducing the administrative burden and ensuring compliance with local laws.

What are the costs associated with employing someone in Singapore?

Employing someone in Singapore involves several costs that employers need to consider. These costs can be broadly categorized into direct and indirect expenses. Here’s a detailed breakdown:

Direct Costs:

  1. Salaries and Wages:

    • Basic Salary: The primary component of employment cost. Singapore has no minimum wage, but salaries must be competitive to attract talent.
    • Overtime Pay: For non-exempt employees, overtime pay is required for work beyond 44 hours a week, typically at 1.5 times the hourly rate.
  2. Bonuses and Incentives:

    • Annual Wage Supplement (AWS): Commonly known as the 13th-month bonus, it is not mandatory but widely practiced.
    • Performance Bonuses: Additional bonuses based on individual or company performance.
  3. Central Provident Fund (CPF) Contributions:

    • Employer Contribution: Employers must contribute to the CPF for Singaporean citizens and permanent residents. The rates vary by age but can be up to 17% of the employee’s wages.
    • Employee Contribution: Employees also contribute to their CPF, deducted from their salary, ranging up to 20%.
  4. Skills Development Levy (SDL):

    • Employers must pay SDL for all employees, including foreign workers, at 0.25% of the monthly remuneration, capped at SGD 11.25 per employee per month.
  5. Foreign Worker Levy (FWL):

    • For employing foreign workers, employers must pay a monthly levy, which varies based on the worker’s qualifications and the industry sector.

Indirect Costs:

  1. Recruitment and Onboarding:

    • Costs associated with advertising job vacancies, recruitment agency fees, and onboarding processes.
  2. Training and Development:

    • Investment in employee training programs to enhance skills and productivity.
  3. Employee Benefits:

    • Health Insurance: While not mandatory, many employers provide medical insurance as part of the benefits package.
    • Leave Entitlements: Paid leave, including annual leave, sick leave, maternity/paternity leave, and childcare leave.
  4. Workplace Safety and Health (WSH) Compliance:

    • Ensuring compliance with WSH regulations may involve costs for safety equipment, training, and audits.
  5. Administrative Costs:

    • Costs related to payroll processing, HR management systems, and compliance with employment laws.

Using an Employer of Record (EOR) like Rivermate:

An EOR can help manage these costs effectively by:

  • Streamlining Payroll and Compliance: Ensuring accurate payroll processing and compliance with local regulations, reducing the risk of penalties.
  • Managing Benefits: Handling employee benefits and statutory contributions efficiently.
  • Reducing Administrative Burden: Taking over HR administrative tasks, allowing the company to focus on core business activities.
  • Cost Predictability: Providing a clear and predictable cost structure, which can be beneficial for budgeting and financial planning.

By leveraging an EOR, companies can mitigate the complexities and hidden costs associated with employing staff in Singapore, ensuring compliance and operational efficiency.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Singapore?

When a company uses an Employer of Record (EOR) service like Rivermate in Singapore, the legal responsibilities of the company are significantly streamlined, but there are still important aspects to consider. Here are the key legal responsibilities and benefits:

  1. Compliance with Local Labor Laws:

    • Employment Contracts: The EOR ensures that employment contracts comply with Singapore's Employment Act, which governs the terms and conditions of employment.
    • Work Permits and Visas: The EOR handles the application and renewal of work permits and visas for foreign employees, ensuring compliance with the Ministry of Manpower (MOM) regulations.
  2. Payroll and Taxation:

    • Payroll Processing: The EOR manages payroll processing, ensuring that employees are paid accurately and on time, in compliance with Singapore's regulations.
    • Tax Withholding and Reporting: The EOR is responsible for withholding the appropriate amount of income tax from employees' salaries and ensuring timely submission to the Inland Revenue Authority of Singapore (IRAS).
  3. Statutory Contributions:

    • Central Provident Fund (CPF): The EOR handles the employer's contributions to the CPF, which is mandatory for Singaporean citizens and permanent residents.
    • Skills Development Levy (SDL): The EOR ensures that the SDL is paid, which funds the Skills Development Fund for workforce training.
  4. Employee Benefits and Welfare:

    • Leave Entitlements: The EOR ensures compliance with statutory leave entitlements, including annual leave, sick leave, maternity leave, and childcare leave.
    • Health and Safety: The EOR ensures that workplace health and safety standards are met, in accordance with the Workplace Safety and Health Act.
  5. Termination and Severance:

    • Fair Dismissal Practices: The EOR ensures that any termination of employment is conducted fairly and in compliance with the Employment Act, including proper notice periods and severance pay where applicable.
    • Dispute Resolution: The EOR handles any employment disputes, ensuring compliance with Singapore's dispute resolution mechanisms.
  6. Data Protection:

    • Personal Data Protection Act (PDPA): The EOR ensures that the handling of employee data complies with the PDPA, which governs the collection, use, and disclosure of personal data.
  7. Local Representation:

    • Legal Entity: The EOR acts as the legal employer in Singapore, which means the company does not need to establish a local entity. This simplifies market entry and reduces administrative burdens.

By using an EOR like Rivermate in Singapore, companies can focus on their core business activities while ensuring full compliance with local employment laws and regulations. The EOR takes on the administrative and legal responsibilities associated with employment, providing peace of mind and reducing the risk of legal issues.

How does Rivermate, as an Employer of Record in Singapore, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Singapore, ensures HR compliance through a comprehensive understanding and application of local employment laws and regulations. Here are several ways Rivermate achieves this:

  1. Adherence to Employment Act: Rivermate ensures that all employment contracts and practices comply with Singapore's Employment Act, which governs the basic terms and conditions of employment. This includes adherence to regulations on working hours, overtime, rest days, and public holidays.

  2. Accurate Payroll Management: Rivermate handles payroll processing in strict accordance with Singaporean laws. This includes accurate calculation of salaries, statutory contributions to the Central Provident Fund (CPF), and timely payment of wages. They also ensure compliance with the Inland Revenue Authority of Singapore (IRAS) for tax deductions and filings.

  3. Statutory Benefits Administration: Rivermate manages statutory benefits such as annual leave, sick leave, maternity and paternity leave, and childcare leave as mandated by Singaporean law. They ensure that employees receive their entitled benefits without any discrepancies.

  4. Work Pass and Visa Compliance: For foreign employees, Rivermate manages the application and renewal of work passes and visas, ensuring compliance with the Ministry of Manpower (MOM) regulations. This includes handling Employment Passes, S Passes, and other relevant permits.

  5. Employment Contracts and Documentation: Rivermate drafts and maintains employment contracts that are compliant with local laws. They ensure that all necessary documentation, such as employee handbooks and policy manuals, are up-to-date and legally sound.

  6. Health and Safety Regulations: Rivermate ensures that workplace health and safety standards are met in accordance with the Workplace Safety and Health Act. They implement necessary measures to create a safe working environment and conduct regular audits to ensure compliance.

  7. Employee Termination and Severance: Rivermate manages the termination process in compliance with Singaporean laws, ensuring that any terminations are handled fairly and legally. This includes calculating and providing any required severance pay and ensuring proper notice periods are observed.

  8. Data Protection Compliance: Rivermate ensures compliance with the Personal Data Protection Act (PDPA) of Singapore, safeguarding employee data and ensuring that all personal information is handled with the highest level of confidentiality and security.

  9. Regular Updates and Training: Rivermate stays updated with any changes in employment laws and regulations in Singapore. They provide regular training and updates to their HR team to ensure ongoing compliance and best practices.

By leveraging Rivermate's expertise as an Employer of Record in Singapore, companies can mitigate the risks associated with non-compliance and focus on their core business activities, knowing that their HR operations are in capable and compliant hands.

Do employees receive all their rights and benefits when employed through an Employer of Record in Singapore?

Yes, employees in Singapore receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. Here’s how an EOR ensures compliance with local employment laws and provides comprehensive benefits to employees:

  1. Compliance with Local Labor Laws: An EOR in Singapore ensures that all employment contracts and practices comply with the Employment Act, which governs most employment relationships in the country. This includes adherence to regulations regarding working hours, overtime pay, rest days, and public holidays.

  2. Statutory Benefits: Employees are entitled to statutory benefits such as Central Provident Fund (CPF) contributions, which are mandatory savings for retirement, healthcare, and housing. An EOR ensures that both employer and employee contributions to CPF are made accurately and on time.

  3. Leave Entitlements: The Employment Act mandates various types of leave, including annual leave, sick leave, maternity leave, paternity leave, and childcare leave. An EOR ensures that employees receive their full entitlements as per the law.

  4. Fair Compensation: An EOR ensures that employees are paid at least the minimum wage (if applicable) and receive their salaries on time. They also handle payroll processing, ensuring that all deductions and contributions are correctly calculated.

  5. Workplace Safety and Health: Singapore has strict regulations regarding workplace safety and health. An EOR ensures that employers comply with the Workplace Safety and Health Act, providing a safe working environment for employees.

  6. Dispute Resolution: In case of any employment disputes, an EOR can provide support and guidance to ensure that issues are resolved in accordance with Singaporean laws, protecting the rights of the employee.

  7. Additional Benefits: Beyond statutory requirements, an EOR can also facilitate additional benefits such as health insurance, performance bonuses, and professional development opportunities, depending on the employer’s policies.

By using an EOR like Rivermate, companies can ensure that their employees in Singapore receive all their legal rights and benefits, while also simplifying the complexities of local employment regulations. This allows businesses to focus on their core operations while maintaining a compliant and satisfied workforce.

What is HR compliance in Singapore, and why is it important?

HR compliance in Singapore refers to the adherence to the various employment laws, regulations, and guidelines set forth by the Singaporean government to ensure fair treatment, safety, and well-being of employees. This includes compliance with the Employment Act, the Workplace Safety and Health Act, the Central Provident Fund (CPF) Act, and other relevant legislation.

Key Components of HR Compliance in Singapore:

  1. Employment Act: This is the main labor law governing employment practices in Singapore. It covers areas such as working hours, overtime pay, rest days, annual leave, sick leave, and termination of employment. It applies to all employees except for seafarers, domestic workers, and statutory board employees or civil servants.

  2. Workplace Safety and Health Act (WSH Act): This act mandates that employers must ensure the safety, health, and welfare of their employees at work. It includes provisions for risk assessments, safety training, and the implementation of safety measures.

  3. Central Provident Fund (CPF) Act: Employers are required to make contributions to the CPF, a mandatory social security savings scheme, for their Singaporean and Permanent Resident employees. This fund covers retirement, healthcare, and housing needs.

  4. Fair Consideration Framework (FCF): This framework ensures that employers consider Singaporeans fairly for job opportunities before hiring foreign talent. It includes advertising job vacancies on the national Jobs Bank and adhering to fair hiring practices.

  5. Employment Pass (EP) and S Pass Regulations: These regulations govern the hiring of foreign professionals and mid-skilled workers. Employers must ensure that they meet the eligibility criteria and adhere to the stipulated salary and qualification requirements.

Importance of HR Compliance in Singapore:

  1. Legal Protection: Compliance with HR laws protects the company from legal disputes and penalties. Non-compliance can result in hefty fines, legal action, and damage to the company’s reputation.

  2. Employee Trust and Morale: Adhering to employment laws fosters a fair and safe working environment, which can enhance employee trust and morale. This, in turn, can lead to higher productivity and lower turnover rates.

  3. Reputation Management: Companies known for compliance with labor laws are more likely to attract top talent and maintain a positive reputation in the market. This can be a significant competitive advantage.

  4. Operational Efficiency: Understanding and implementing HR compliance measures can streamline HR processes, reduce administrative burdens, and ensure smooth operations. This allows the company to focus on core business activities.

  5. Risk Mitigation: Compliance helps in identifying and mitigating risks associated with employment practices. This includes avoiding discriminatory practices, ensuring workplace safety, and managing employee grievances effectively.

Role of an Employer of Record (EOR) like Rivermate:

Using an Employer of Record (EOR) service like Rivermate can significantly ease the burden of HR compliance in Singapore. An EOR takes on the legal responsibilities of employing staff, ensuring that all employment practices adhere to local laws and regulations. This includes:

  • Payroll Management: Ensuring accurate and timely payroll processing in compliance with Singaporean laws.
  • Tax Compliance: Handling tax filings and ensuring compliance with CPF contributions and other statutory requirements.
  • Employment Contracts: Drafting and managing employment contracts that comply with local labor laws.
  • Work Visa and Permits: Managing the application and renewal of work visas and permits for foreign employees.
  • Regulatory Updates: Keeping the company informed about changes in employment laws and regulations, ensuring ongoing compliance.

By leveraging the expertise of an EOR like Rivermate, companies can focus on their core business activities while ensuring full compliance with Singapore’s complex HR regulations.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.