Singapore

Currency CurrencySingapore Dollar (SGD) Working Time Work Week44 hours Employer Taxes Employer Taxes 7.5% - 17%

Hire in Singapore

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Singapore is an attractive destination for international companies looking to grow their remote teams. Not only has Singapore got relatively low tax rates but also the fact that English is one of the four official languages makes the country a great place for international recruiting. 

Furthermore, the Singapore Government has invested big sums in the country’s human capital in recent years in order to create a highly skilled workforce which can compete on the global market. According to the OECD, the country ranks top of the list when it comes to numeracy skills among young employees

Basic Facts about Singapore

  1. official state name Republic of Singapore
  2. capital Singapore
  3. population 5.85 million
  4. languages Malay, English, Mandarin, Tamil
  5. currency Singapore Dollar (SGD)
  6. time zone UTC +8
  1. Show public holidays
    01 Jan New Year
    12 Feb Chinese New Year
    13 Feb Second Day of Chinese New Year
    02 Apr Good Friday
    01 May Labour Day
    13 May Hari Raya Puasa
    26 May Vesak Day
    20 Jul 20 Jul
    09 Aug National Day
    04 Nov Deepavali (Festival of Lights)
    25 Dec Christmas Day

Employment Contract

Employment contracts in Singapore can have several forms and do not need to be in writing in order to be legally valid. However, it is best practice to provide employees in Singapore with a written employment contract stating at least the basic terms of employment such as:

  • Identification of both parties 
  • Date of commencement (and employment duration for temporary contracts) 
  • Workplace (optional)
  • Job description and duties 
  • Basic salary and overtime pay, as well as other forms of compensation or bonuses
  • Working hours and rest days
  • Allowances and deductions
  • Leave entitlements
  • Additional medical benefits
  • Probation period
  • Notice periods for employment termination

Probation Period

Probation periods in Singapore range from three to six months and must be defined in the employment contract.

Working time

The national Employment Act sets the rules for rest days, working hours, breaks, overtime and other aspects concerning employment. However, not all employees are covered by it: Managers and executives as well as workmen earning more than SGD 4,500 or employees earning more than SGD 2,600 per month are not included.

Working Hours and Breaks

A standard workweek in Singapore is 44 hours, usually spread over a five-day week with a normal daily working time of up to nine hours. For employees whose normal workweek comprises six days, daily working time is usually less than eight hours.

After six hours of consecutive work, employees have to take a break. During an eight-hour shift, employees should be granted a lunch break of at least 45 minutes. Employees must have at least one whole day of rest per week. 

Overtime

Employees who fall under Singapore’s Employment Act are to be remunerated at a rate of at least 150% of usual wages for every hour they work overtime. An employer is not allowed to require more than 72 hours of overtime work from an employee within one single month. Furthermore, the employee’s maximum daily working time must not exceed twelve hours.

Payroll

The national Employment Act rules that salaries in Singapore must be paid at least once a month and no later than seven days after the respective work period has ended. 

Minimum Wage

There is no minimum wage in Singapore.

Sick Pay

Employment law in Singapore distinguishes between two types of sick leave: so-called outpatient sick leave and paid hospitalisation leave. In order to claim either of them, employees must have worked for their current employer for more than three consecutive months and be covered by the regulations of the national Employment Act (see above). 

The number of paid sick days depends on the employee’s length of service:

  • 3 months of service = 5 days outpatient sick leave and 15 days paid hospitalisation leave
  • 4 months of service = 8 days outpatient sick leave and 30 days paid hospitalisation leave
  • 5 months of service = 11 days outpatient sick leave and 45 days paid hospitalisation leave
  • over 6 months of service = 14 days outpatient sick leave and 60 days paid hospitalisation leave

Every time an employee takes outpatient sick leave, they must inform their employer no later than 48 hours after the beginning of their absence from work and provide a medical certificate proving they are unfit for work. 

Employers are obligated to continue paying the employee’s normal wages throughout sick leave. They also have to reimburse the employee for their medical expenses if the consultation has been made with a registered doctor. 

Bonuses

Although not legally required, it is common practice for employers to pay their employees an annual bonus.

Taxes and Social Security Contribution

Employees and employers in Singapore are subject to the following tax and social security contribution rates:

taxes
employers

17% corporate tax rate

7% VAT (standard rate)

employees

Individual income tax rates range

from 0% to 22% *

social security
employers

7.5% – 17% of employee’s gross salary, depending on employee’s age

aged under 55: 17% to Central Provident Fund (CPF)

aged 55 – 60: 13% to Central Provident Fund (CPF)

aged 60 – 65: 9% to Central Provident Fund (CPF)

aged over 65: 7.5% to Central Provident Fund (CPF)

employees

5% – 20% of employee’s gross salary, depending on employee’s age:

aged under 55: 20% to Central Provident Fund (CPF)

aged 55 – 60: 13% to Central Provident Fund (CPF)

aged 60 – 65: 7.5% to Central Provident Fund (CPF)

aged over 65: 5% to Central Provident Fund (CPF)

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Individual income is taxed progressively based on the following tax brackets (percentage rates given only apply to income exceeding the respective tax bracket threshold):

– SGD 0 – SGD 20,000: 0%

– SGD 20,000 – SGD 30,000: 2% on excesses 

– SGD 30,000 – SGD 40,000: SGD 200 + 3.5% 

– SGD 40,000 – SGD 80,000: SGD 550 + 7%

– SGD 80,000 – SGD 120,000: SGD 3,350 + 11.5%

– SGD 120,000 – SGD 160,000: SGD 7,950 + 15%

– SGD 160,000 – SGD 200,000: SGD 13,950 + 18%

– SGD 200,000 – SGD 240,000: SGD 21,150 + 19%

– SGD 240,000 – SGD 280,000: SGD 28,750 + 19.5%

– SGD 280,000 – SGD 320,000: SGD 36,550 + 20%

– above SGD 320,000: SGD 44,550 + 22%

Employee Benefits

Annual Leave

The statutory minimum for annual leave in Singapore is seven days. With each year of employment, employees gain one extra paid day off until they reach a total of 14 days of annual leave. In practice, employers usually grant between 14 and 20 paid vacation days per year.

In addition, the country observes eleven public holidays. If a public holiday falls on a rest day, the next working day will automatically turn into a paid holiday. If a public holiday falls on an employee’s non-working day, the employee either receives an additional day off or an extra day’s pay. 

Maternity Leave and Paternity Leave

Female employees can claim either 12 or 16 weeks of paid maternity leave, depending on whether they fulfill the following conditions:

  • they have completed at least three months of consecutive service with their current employer
  • the child must be a Songaporean citizen
  • notice has been given to the employer at least one week before the start of maternity leave

If the employee fails to meet all of the above mentioned criteria, this may result in her maternity leave being reduced to twelve weeks. Maternity leave in Singapore is usually fully paid with the employer covering the first eight weeks of leave while pay for the last eight weeks is covered by the Government – after the second birth, maternity leave is entirely covered by the Singapore Government. 

Fathers of newborn children are allowed to take 14 days of government-paid paternity leave if

  • they have completed at least three months of consecutive service with their current employer
  • the child is a Songaporean citizen
  • they are married to the child’s mother (or at least have been married to her during the period between conception and birth)

Paternity leave must be taken within the first 16 weeks after the child’s birth. It is possible to either take two continuous weeks or to split paternity leave into several shorter periods. 

Parental Leave

It is possible that the mother allocates four weeks of her unused maternity leave to the child’s father – under the condition that both parents are married and the child is a lawful citizen of Singapore. During this shared parental leave, the father’s wages are paid by the Government up to a limit of SGD 2,5000 per week. As for paternity leave, shared parental leave can either be taken in one or several blocks.

Additional Leave and Benefits

In addition to the above mentioned leave entitlements, employees in Singapore have the right to request time off work for the following reasons:

  • six days of paid childcare leave per calendar year for children aged six years or younger – two days if the child is not a Singaporean citizen
  • six days of unpaid childcare leave per calendar year for children under two years – only if the child holds the Singaporean nationality
  • twelve weeks of paid adoption leave for female employees adopting a child of one year or younger

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Employment termination

In addition to employment termination by default – i.e. in case of a fixed-term contract – or voluntary termination by the employee, Singapore’s labour law provides for the following reasons for employee dismissal (non-exhaustive list):

  • gross misconduct such as theft, dishonesty etc. 
  • breach of employment contract by either employer or employee, e.g. employee’s absence from work without approval or notice
  • constant underperformance
  • long-term sickness
  • retrenchment

Depending on the reason, the employment may be terminated with or without prior notice. While termination due to a breach of the employment contract by either employee or employer or dismissal due to the employee’s misconduct do not require any prior notice, both employee and employer have to respect the following statutory notice periods in all other cases – unless specified otherwise in the employment contract:

Length of service Minimum notice period
< 26 weeks 1 day
< 2 years 1 week
< 5 years 2 weeks
> 5 years 4 weeks

 

Payment in lieu of notice is possible for both parties. Furthermore, employees who are covered under the Singapore Employment Act and who have been working for the employer for more than two years are entitled to severance pay if their employment is terminated due to redundancy. 

However, the Employment Act does not fix the amount to be paid. As a norm, employers should consider severance pay equal to two weeks’ or one month’s wages for each completed year of service.

Hiring in Singapore?

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