Gateway to Asia: Precision, Compliance, and Regional Expertise

Singapore is a regional hub for talent and innovation, supported by clear regulations and a competitive business landscape. Yet, for companies entering or expanding in Singapore, managing local HR requirements—such as compliance with employment laws, payroll, work pass applications, and public holiday entitlements—can be complex.

Social Insurances

All employees in Singapore are required to contribute to the Central Provident Fund (CPF), a mandatory savings scheme covering housing, healthcare, and retirement needs. CPF contribution rates vary based on age, employment type, and government guidelines.

Work Passes

Singapore offers various work passes for foreign employees, each governed by strict eligibility criteria, salary thresholds, and quota systems. Regulatory changes have reinforced the need for companies to maintain a local presence to sponsor foreign hires directly into Singapore.

While inbound hiring is more closely regulated, Singapore remains a strong strategic base for outbound expansion. Businesses headquartered here can compliantly manage talent across the region — without needing to set up local entities in every market.

Types of Employments

In Singapore, part-time and contract employees are generally protected under the same employment laws as permanent full-time staff.

However, it is commonly understood that they may not receive the full range of company-specific benefits — such as private health insurance or mobile phone allowances — unless the employer chooses to provide them.

Companies may also hire local students under various employment arrangements. Internships are a unique category, as employers are not required to contribute CPF for interns who are not considered employees under the Employment Act (typically students on training attachments).

Healthcare Benefits

While Singaporean employees benefit from public healthcare subsidies, private medical costs remain high. Employers offering comprehensive benefits including health screenings, dental, and optical care — gain a competitive edge in attracting top talent. As your EOR, we manage benefits setup and claims administration with trusted insurers to ensure a smooth experience for you and your employees.

Tax Filings

By 1 March each year, employers must file Form IR8A and relevant appendices (8A, 8B, or IR8S). Employers with five or more staff must do so electronically under the Auto-Inclusion Scheme.

Termination

In Singapore, termination requires prior notice, generally defined by the employment contract. For foreign workers, companies must withhold all payments and submit Form IR21 to the Inland Revenue Authority of Singapore (IRAS) at least 30 days before cessation of employment for tax clearance.

Employment Act Coverage

The Employment Act is Singapore’s main labour law, covering most employees — local and foreign — except for seafarers, domestic workers, and public servants. The Act applies differently depending on an employee’s role and salary level.

Workmen (manual labourers earning up to SGD 4,500/month) and non-workmen (clerical and administrative staff earning up to SGD 2,600/month) are covered under Part IV of the Employment Act. Part IV provides protection relating to:

• Working hours (up to 6 days per week)
• Overtime limits (maximum of 72 hours per month)
• Overtime pay (at least 1.5x the hourly basic rate)

Managerial and executive employees — typically those involved in decision-making or supervisory roles — are not covered under Part IV, regardless of salary. This means provisions such as limits on working hours, overtime pay, and rest days do not apply to them.

Employees earning above SGD 2,600/month are still covered under the general provisions of the Employment Act (e.g., salary payments, sick leave, annual leave), but not under Part IV.

Social Security in Singapore

Social security in Singapore is administered through the Central Provident Fund (CPF). Both employers and employees are required to make monthly contributions, with rates varying based on the employee’s age and Permanent Resident (PR) status.

For Singapore Citizens and established Permanent Residents aged 55 and below, the standard CPF contribution rates are:

• Employee: 20% of gross monthly wages
• Employer: 17% of gross monthly wages

For new Permanent Residents (within their first two years of PR status), graduated rates apply under the CPF contribution transition scheme.

In addition to CPF, employers must also contribute to the Skills Development Fund (SDF). The SDF levy is 0.25% of the first SGD 4,500 of each employee’s monthly gross salary. This fund supports workforce upgrading by providing grants to employers who invest in training their employees.

Foreign Employment

Singapore offers a range of work passes designed for foreign employees, broadly divided into two categories: professionals, and skilled or semi-skilled workers.

For foreign professionals, managers, and executives, the most common pass is the Employment Pass (EP). To qualify, applicants must have acceptable academic qualifications and earn a minimum fixed monthly salary. The salary criteria are being progressively raised:

• For new EP applications submitted from 1 January 2025, the minimum qualifying salary is SGD 5,600 per month for most sectors. This amount increases with age, up to SGD 10,700 for candidates aged 45 and above.
• For those in the financial services sector, the minimum is higher, starting at SGD 6,200 per month, increasing with age to SGD 11,800 for older applicants.
• For EP renewals where the pass expires between 1 January 2025 and 31 December 2025, the current minimum salaries remain at SGD 5,000 (or SGD 5,500 for financial services), with similar age-based increases.

Other types of professional-level passes include:

• EntrePass, for eligible foreign entrepreneurs wanting to start and operate a business in Singapore.
• Personalised Employment Pass (PEP), which is independent of a specific employer and targets high-earning professionals.

For skilled and semi-skilled workers, Singapore issues passes tailored to specific industries or skill levels:

• The S Pass is for mid-level skilled workers, with a minimum qualifying salary of SGD 3,000 per month. Higher salaries are required for older applicants.
• The Work Permit is typically issued to semi-skilled workers in sectors such as construction, manufacturing, marine, process, and domestic work. Each sector has its own eligibility criteria and quotas.

These passes are subject to additional requirements, such as employer quota limits and levies, depending on the sector.

Foreign Talent Quota

In Singapore, the number of foreign workers a company can hire is governed by a quota system tied to the size of its local workforce. This is to ensure a balanced and sustainable workforce composition.

The foreign worker quota is determined based on the company’s Central Provident Fund (CPF) contributions, which reflect the number of local employees hired. A local employee is defined as a Singapore Citizen or Permanent Resident employed under a contract of service (including directors receiving CPF contributions).

The calculation of local headcount is based on the Local Qualifying Salary (LQS):

• An employee earning at least SGD 1,300 per month counts as 1 local employee.
• An employee earning between SGD 650 and SGD 1,299 counts as 0.5 local employee.
• Two part-time employees earning at least SGD 650 each per month can be counted together as one local employee.

The maximum number of foreign workers a company may employ is determined by the following formula:

(DRC% × Local Manpower) / (100% – DRC%)

DRC stands for Dependency Ratio Ceiling—the maximum allowable proportion of foreign workers relative to the total workforce.

Payrolling Requirements (2025)

Issuance of Itemised Payslips
Under the Employment Act, all employers must issue itemised payslips (soft or hard copy) to employees covered by the Act, including foreign workers with S Passes and Work Permits.

Payslips must include:

• Date of payment
• Basic salary
• Allowances (fixed and variable)
• Overtime pay
• Salary period
• Deductions made (e.g. CPF, absence, unpaid leave)

Non-compliance can result in financial penalties of up to SGD 200 per occurrence, under the Employment Claims Act.

Personal Data Protection Act (PDPA)

Singapore has implemented the Personal Data Protection Act (PDPA), which sets out requirements for the collection, use, disclosure, and protection of personal data. This affects how employers and organisations must handle the personal data of current and potential employees. Failure to comply with the PDPA can result in financial penalties.

Here are some key guidelines employers should follow to ensure compliance with the PDPA:

• An individual’s NRIC (National Registration Identity Card) number should only be collected at the final stage of the recruitment process, such as when the candidate accepts the job offer.
• Resumes of unsuccessful applicants should only be retained for a limited period and must be disposed of securely to prevent any risk of data leakage.
• If an organisation wishes to share a candidate’s resume with other departments for consideration of alternative roles, explicit consent from the individual must be obtained. Employers may include a statement in the job listing indicating that applicants may be considered for other roles within the organisation, which serves as advance consent.

• If a public holiday falls on a rest day or non-working day, employers must provide either a substitute day off or additional pay.
• Employees required to work on a public holiday are entitled to an extra day’s salary—on top of their usual pay—or a substitute day off.
• Employers should refer to MOM’s official gazette for exact dates, as some holidays vary based on lunar or religious calendars.

Please find our Singapore office address below:

60 Paya Lebar Road,
#11-41, Paya Lebar Square,
Singapore 409051

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Email: at@linkcompliance.com