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Employer of Record (EOR) in Singapore

Employer of Record in Singapore

Skuad’s Singapore Employer of Record (EOR) solutions assist in the smooth expansion of your business in Singapore. A favorable business environment for overseas investors, low tax rates, and an immensely skilled workforce make Singapore an apt choice for expanding your scale and reach. It comes as no surprise that it is one of the favorite destinations of entrepreneurs aiming to expand globally. Skuad as your EOR in Singapore adds to the charm as you would not require to set up a separate legal entity to do business in Singapore.

Hiring employees in another country can be time-consuming and arduous as it requires knowledge of the local laws and regulations. Skuad makes this task easier by offering customized solutions for your human resources needs. As a reputed and trusted EOR solutions company in Singapore, Skuad takes the responsibility of handling the on-boarding, taxes, and payroll of employees in Singapore in strict compliance with the local laws and regulations.

Singapore at a Glance

Population: 5.7 million people (2019 estimate)

Languages: English, Malay, Mandarin, and Tamil

National language: Malay

GDP: $600 billion (2021 estimate)

Currency: Singapore Dollar


Employment in Singapore

Singapore has a business-friendly environment, which makes it a lucrative destination to expand your business. Organizations planning to grow their business in Singapore must have in-depth knowledge about Singapore labor laws. A clear understanding of Singapore’s employment laws enables you to comply with the regulations and employ workers with ease.

There has been a drastic increase in the demand for knowledge workers in recent years. The other prominent sector is banking and finance.

The main tenets of Singapore’s Employment Act, 1968 are given in the following table.

The Employment Act, 1968

The Employment Act of Singapore outlines the terms and conditions of hiring employees and provisions that govern the employer-employee relationship. It covers all the employees, local and foreign, except,

  • Seafarers

  • Domestic workers

  • Civil servants

Coverage of the Employment Act

The Employment Act covers full-time, part-time, temporary, and under-contract employees. Part-time employees are those employees who work for less than 35 hours a week.

Working-age

In Singapore, you can employ people who are 17 years old and above. The age of retirement is 62 years. Both citizens and permanent residents of Singapore can be re-employed further till 65 years.

Salary

The employer must pay the employee’s salary within seven days after it is due.

Paid leave

An employee is entitled to paid leaves if they have completed three months working for an employer. The number of paid annual leaves depends on the number of years the employee has served the organization.

Number of paid leaves Number of years worked
7 days 1
8 days 2
9 days 3
10 days 4
11 days 5
12 days 6
13 days 7
14 days 8

Public holidays

According to the Employment Act, employees in Singapore are entitled to 11 public holidays in a year. If an employee works on a public holiday, they should be paid extra or get a compensatory off.

Working hours

The statutory working hours in Singapore are 44 hours a week.

Overtime payment

An employee working overtime is eligible to be paid at one and a half times their hourly salary. An employee is eligible for overtime if employed as a workman earning up to $4500, or employed as a non-workman earning up to $2600.

Medical leave

An employee is entitled to claim paid outpatient sick leaves and paid hospitalization leaves if they have worked for an organization for three months. An employee gets up to 14 days of paid outpatient sick leave and 60 days of paid hospitalization leave, which includes 14 days of paid outpatient sick leave. An employee will receive full entitlement if they have completed six months of service.

Maternity leave

Expecting mothers are allowed to avail of maternity leave in Singapore. The length of the maternity leave depends on the nationality of the child. If the child is a Singapore citizen, the mother is entitled to 16 weeks of maternity leave. In other cases, according to the Employment Act, working women can claim maternity leave of 12 weeks from their employer, provided they have completed three months of service.

Leave expiry

If an employee fails to use their leaves in a year, they are forfeited at the end of the year and not carried forward.

Leave cash out

An employee is entitled to receive the accrued leaves in cash at the time of termination of service.

Employee health benefits

Although it is not mandatory by law to provide employee health benefits, most employers in Singapore provide health insurance to their employees. This keeps the employees motivated and boosts performance.

Confidentiality of employees

The Personal Data Protection Act of Singapore states that the employer cannot use the employees’ personal information without their prior consent and knowledge.

The complex nature of employment laws and guidelines makes the services of professional EORs in Singapore indispensable. Skuad helps organizations manage a remote team in Singapore through its advanced global HR platform. Book a demo to learn more.

Contractors vs. Full-time Employees

Organizations can opt to hire full-time employees or contractors according to their business needs. An employment contract in Singapore states the terms of the relationship between an employer and an employee. It is essential to have an employment agreement in Singapore as it specifies the rights and obligations of the employer and employee. The main points of distinction between a full-time employee and an independent contractor are as follows.

  • A full-time employee is paid monthly. A contractor is a temporary employee and is paid for their services in a lump sum or commission.
  • Employers can exert complete control over full-time employees and direct them to work according to their business needs. However, an independent contractor uses their discretion to work independently.
  • An organization must contribute to the Singapore central provident fund (SCPF) for its full-time employees. The employer and the employees contribute to the SCPF monthly. An independent contractor is not entitled to this benefit.
  • An employee’s entire income is taxable, and personal expenses cannot be deducted from the income for tax computation. However, an independent contractor would deduct their business expenses from their income and compute the tax liability.
  • Full-time employees are entitled to receive all the benefits covered under the Employment Act. Contractors are not entitled to receive employee benefits.

Organizations should hire full-time employees for regular duties that are necessary for the long term. Contractors or freelancers should be hired for specific services that are required in the short term. Skuad helps organizations to find the right blend of full-time and contract-based employees, keeping in mind the diverse organizational requirements. Skuad ensures that your company complies with the Employment Contract Law, Singapore, and follows labor practices. Partner with Skuad to learn more and increase the scale and reach of your business.

Hiring in Singapore

Hiring in Singapore can be daunting for a firm that does not have a legal entity there. To hire employees in Singapore, one must be well aware of the employment regulations of Singapore. The popular route is to go through hiring platforms in Singapore such as Jobstreet, Gumtree, Beam,CareerBuilder, and Freelance Zone, which have skilled and adept talent willing to work for your organization. These platforms are advantageous as they help to find the right candidates and save you time and money. However, on the other hand, it entails having to screen several applications to find the right one.

Skuad simplifies the process of hiring in Singapore. After understanding the desired qualifications, responsibilities, duration of service, and salaries of the employees, Skuad drafts an agreement of employment that complies with the local laws. Thereafter, the new employee is registered for payroll. Skuad manages the payroll and prepares payslips every month.

A dedicated Account manager is appointed to each client and is responsible for tracking all the details and the payslips of the employees. Skuad assists with performance evaluation of employees and termination whenever required. Book a demo to learn more.

Probation & Termination

The probation period of employees in Singapore varies from three to six months in different organizations. An employee is treated as a permanent employee of an organization upon completing the probation period.

Termination

An employee can be terminated according to the terms of the employment contract. After giving them notice, you may terminate an employee from service if there is sufficient cause for termination.

Notice period

If the notice period is not mentioned in the contract, the employer must follow the notice period regulations outlined in the Employment Act. The notice period according to the Employment Act is,

  • One day for employees who have served less than two weeks

  • One week for employees who have served for 26 weeks to two years

  • Two weeks for employees who have served for two to five years

  • Four weeks for employees who have served for more than five years

Termination of employment in Singapore should be done with utmost care because it entails huge risks for employers. Taking the assistance of an established EOR solutions company in Singapore, such as Skuad, helps prevent any future litigation. Skuad offers complete guidance and support in the matters of probation and the termination of an employee.

EOR Solution

Skuad has a client-centric approach and delivers end-to-end EOR solutions to its diverse clients. The integration of different economies has increased the opportunities to expand your business globally. An EOR service organization plays a vital role in helping you to expand your business operations.

Employer of Record Service Terms in Singapore

Duration of service

The minimum duration is three months.

Taxes applied to invoices

Goods and services tax (GST) is applied at 7% on Singaporean entities and foreign companies are exempt from GST.

Acceptable currency

US Dollars (USD), euros (EUR), or pound sterling (GBP) are accepted in Singapore.

Required documents

For Singaporean citizens, the following documents are required:

  • Personal information

  • Copy of passport

  • Bank details

  • Copy of National Registration Identity Card (NRIC; for permanent residents)

  • Job description

For expatriates, the following documents are required.

  • Personal information

  • Job description

  • Educational qualifications

  • Technical qualifications

  • Curriculum vitae (CV)

  • Copy of passport

  • Copy of ID

  • Bank details

  • Photographs

  • Police verification

  • Medical exam results

Types of Visas in Singapore

Foreign workers must mandatorily possess proper visas as per the immigration laws of Singapore. Skuad helps you arrange Singapore work visas and permits for your employees. The major types of work visas are as follows.

Employment Pass

All foreign employees in Singapore earning SGD 3,300 or more per month should have an employment pass. This visa is sponsored by the concerned employer in Singapore. It is valid for two years and can be renewed for three years.

Entrepreneur Pass

Entrepreneur pass or Entre Pass is for business people who are willing to start a new venture in Singapore. Your company must be a private limited company with a paid-up capital of SGD 50,000 or more. The nature of your business should not be illegal in Singapore and must be allowed by the government. The applicant should own 30% of the total share capital of the company.

Personalized Employment Pass

The Personalized Employment Pass is for foreign workers or Employment Pass holders who are high-earning. You should earn SGD 18,000 or more if you are a foreign professional and make SGD 12,000 per month or more if you are an existing EP holder. This visa allows you to switch among different employers in Singapore. It is valid for three years but cannot be renewed. The employee should not be a freelancer or start a business activity with this visa. A sponsored EP holder cannot apply for this visa and should earn SGD 144,000 in a calendar year to hold this pass.

S Pass

This pass is for mid-level staff. It is sponsored by an employer registered in Singapore. An employer cannot have more than 20% of its workforce as S Pass holders. This pass is valid for two years and is eligible for renewal. An employee must earn SGD 2,200 per month or more to be eligible for this pass.

As an eminent EOR in Singapore, Skuad offers a hassle-free mechanism and takes the responsibility to arrange visas and sponsor them in Singapore in compliance with Singapore work visa requirements. Talk to us to find out more.

Work Permits

As an EOR, Skuad sponsors the work permits required by the employees in Singapore. Skuad arranges Singapore work permits for foreigners and without a job offer. It takes around seven to 14 days to process the work permits. Skuad’s local entity applies for the work permit and receives an in-principle approval (IPA) letter for the employee. The employee can enter Singapore with this letter. Skuad applies for a pass for the employee. The employee registers their fingerprints and a photograph with the Employment Pass Service Centre (EPSC) to receive their pass. The pass is valid for one year and can be renewed.

Sponsorship

Skuad can sponsor the Work Permit.

Processing time

The processing time is 14 days.

Process of Work Permit

  • Skuad files an application for an employee’s Employment Pass.

  • An IPA letter is received by the Ministry of Manpower.

  • The employee is allowed to enter Singapore on the presentation of the IPA letter.

  • The employee can start working in Singapore.

  • The employee then submits their biometrics at EPSC.

  • The employee receives their pass card.

Submission of passport

An employee’s passport is submitted.

Validity

The employment pass is valid for one year and can be renewed thereafter.

Work Permit criteria

The employee must have a salary of SGD 3,600 per month or more.

Business Visa cost

A Business Visa costs $400

Processing time for Business Visa

A Business Visa takes five to 10 days to be processed.

Switching from Work Permit to Business Visa

Employees are not allowed to switch from a Work Permit to Business Visa.

Work Permit termination

No notice period is required for the termination of a work permit. It has to be canceled within seven days of the last day of the notice period for employment termination, or it should be canceled after one day of expiry of the Employment Pass.

Payroll & Taxes in Singapore

Business organizations aiming to explore the potential of Singapore to grow their business must follow the payroll and taxation rules of Singapore. Partnering with an EOR solutions company in Singapore and outsourcing the payroll mechanism is a convenient and cost-effective method to follow the tax legislation on employees in Singapore.

The tax structure of Singapore is as follows:

Payroll tax

There is no payroll tax to be paid in Singapore.

Income tax

Income tax rates are as follows.

Gross total income Tax rate (%)

0–30,000

2

30,001–40,000

3.5

40,001–80,000

7

80,001–120,000

11.5

120,001–160,000

15

160,001–200,000

18

200001–240,000

19

240,001–280,000

19.5

280,001–320,000

20

320,001+

22

Corporate income tax

The corporate income is taxed at 17%.

Tax returns

Individuals are required to file tax returns.

Financial year

The financial year ends on December 31.

Tax documents

Form IR8A is the primary tax document.

Withholding tax

This tax applies to non-residents as follows.

  • Dividends: None

  • Interest: 15%

  • Royalties: 10%

  • Technical services: 17%

Sales tax

The government levies GST on all goods and services barring exports, financial services, sale or rental of residential properties, and import and supply of precious metals.

Social Security contribution by employers

Employers are required to contribute 17% of the salary to the Central Provident Fund (CPF).

Social Security contribution by employees

Employees are required to contribute 20% of their salary.

Medical insurance

Medical insurance is not mandatory.

Skuad has the required expertise to manage your payroll in Singapore and comply with the tax guidelines. By acting as your Singapore employer, it handles the payroll and related taxes. Book a demo to learn more.

Incorporation: How to Set Up a Subsidiary in Singapore

Singapore is a favorite business destination for all budding entrepreneurs because of its business friendliness. Business in Singapore can be very profitable as it offers tremendous opportunities for growth and expansion. You can start your business in Singapore by the following three methods.

  • Representative office
  • Branch office
  • Subsidiary company

To establish a subsidiary company in Singapore, you must follow the following process.

  1. Register your company’s name.
  2. File the Memorandum of Association, Articles of Association, Statutory Declaration Form 6, Identity Certificate, Notice of Registered Office, and Consent to Act as a Director.
  3. Appoint representatives such as Director, Agents, and Company Secretary.
  4. Get a company seal.
  5. Open a bank account.
  6. Provide for Employee Insurance via the CPF.

Skuad provides a holistic solution for incorporating a holding company in Singapore. Skuad is a one-stop destination to meet all HR requirements of a business as it handles the entire paperwork and formalities on your behalf. You can free up time and resources to explore the business opportunities in Singapore and magnify the scale of your business. Talk to us to resolve your doubts.

Professional Employer Organization (PEO)

A professional employer organization (PEO) renders similar services offered by EOR solutions company. The key difference is that a PEO acts as a co-employer of your remote team and manages all human resources activities while you remain the legal employer, whereas an EOR besides handling all human resources operations becomes the legal employer of your employees and the liability of employees lies with them.

Skuad offers EOR solutions. You may opt for a PEO or an EOR depending on the level of involvement you prefer in human resources operations. Book a demo for comprehensive support and guidance.

Conclusion: What Gives Skuad’s Singapore Solutions an Edge?

Skuad has carved a niche in the EOR solutions industry for itself with its highly professional and successful services. Skuad has the required expertise and experience to assist you in amplifying the scale of your business in Singapore. Learn more about Skuad’s synchronized approach to give an impetus to your business and widen its horizons.

Talk to us for enhanced support regarding HR management in Singapore with our holistic EOR solutions.

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