10 Notable Points When Hiring in Singapore

With its rich culture, history, and thriving economy, Singapore stands as one of Southeast Asia's fastest-growing nations. If you're considering hiring employees in this dynamic city-state, there are essential factors to consider. This blog delves into 10 notable points when hiring in Singapore, providing valuable insights to ensure a successful and compliant hiring process. 

Here are the 10 key points that will help to ensure a successful hiring process in Singapore:

1. Compliance with Employer Cost You Must Follow

Typically, the employer cost is estimated to be around 17.25% of the employee's salary.

• Central Provident Fund - 17%
• Skill Development Fund - 0.25%

2. Vital Inclusions for Contracts

In Singapore, when hiring, contracts should be prepared in English or can be bilingual. They must be in written form and signed by both parties involved. A contract in Singapore should include the following elements:

• Name
• Start date
• Length of the employment
• Job description
• Termination conditions

3. Essential Documents for Onboarding in Singapore

• Passport / ID
• Identity card Residential address

After the signature of the MSA (Master Service Agreement) and deposit payment, the onboarding process typically spans two business days.

4. Mandatory Benefits for Employees in Singapore

In Singapore, both on-site and remote employees are entitled to receive mandatory benefits, which encompass:

• Pension Fund (CPF)
• Public Health Insurance
• Skill Development Levy
• Health and life benefits (optional)

5. Compulsory Paid Time Off & Public Holidays

When hiring full-time employees in Singapore, whether remote or on-site employees, it is important to note that they have the entitlement to seven days of paid time off (PTO) per year. PTO accrues at a rate of 0.58 days per month. Employees become eligible for annual leave after completing three months of work. Moreover, employees are granted an additional day of leave for each year of service, up to a maximum of 14 days.

Public Holidays

Singapore commemorates 10 national holidays, spanning a total of 11 days. The national public holidays observed in Singapore include:

6. Minimum Wage Requirements

In Singapore, there is no mandated minimum wage requirement.

7. Overtime Pay & Rules

In Singapore, overtime payment is not obligatory and is typically assumed to be included in the employee's salary. The standard working hours can be up to 9 hours per day or 44 hours per week. The standard workweek typically runs from Monday to Friday.

8. Individual Income Tax

In Singapore, individual income tax is levied based on progressive rates ranging from 0% to 22%. The calculation of income tax takes into account various factors, including household status and the number of children, which can impact the overall tax rates applied. The tax rate is determined based on the gross household income:

• Up to SGD 20,000 - 0%
• Up to SGD 30,000 - 2%
• Up to SGD 40,000 - 3.5%
• Up to SGD 80,000 - 7%
• Up to SGD 120,000 - 11.5%
• Up to SGD 160,000 - 15%
• Up to SGD 200,000 - 18%
• Up to SGD 240,000 - 19%

9. Leave Policies in Singapore

Maternity Leave

Pregnant employees in Singapore who have worked for three consecutive months are entitled to 16 weeks of paid maternity leave. Out of this period, four weeks must be taken before the child's birth, and eight weeks must be taken after the birth. The remaining four weeks can be utilized at the employee's discretion. During the maternity leave, the employee will receive 100% of their average salary. The employer is responsible for providing salary payment for the first eight weeks, while Social Security takes over the payment for the second eight weeks.

Paternity Leave

Employees in Singapore who have worked for at least three consecutive months are entitled to two weeks of paid paternity leave. This paternity leave can be taken continuously at any time within the 16 weeks of maternity leave. During the paternity leave, the employee will receive their normal salary, which is capped at $2500 per week. The responsibility for providing the salary payment during paternity leave lies with the employer, and it is facilitated through Social Security.

Parental Leave

Fathers have the entitlement to share four weeks of the mother's 16 weeks of maternity leave. During this shared parental leave, the employee will receive their normal salary, which is capped at $2500 per week.

Sick Leave

Employees in Singapore who have worked for at least three months are entitled to paid sick leave for up to 14 days. The number of sick days granted varies based on the length of service. 

Additionally, employees are entitled to paid hospitalization leave for up to 60 days, also contingent upon having worked for at least three months. The number of hospitalization leave days provided is dependent on the length of service as well. 

10. Procedures for Terminating Employees

Terminations in Singapore can involve complexities. Unlike the concept of "at-will" termination, employers in Singapore cannot terminate employees without cause. Terminations must be justified by just cause. Compliant terminations in Singapore may include:

• Voluntarily by the employee
• By mutual agreement
• By the expiration of the contract
• Unilaterally by the employer based on:
  • probation period
  • objective grounds
  • disciplinary dismissal
• performance due to unsuitability for the job

Notice Period

In Singapore, the minimum notice period for termination is one day, and it can be extended based on the length of the employee's employment.

Severance

In Singapore, there is no legal requirement to provide severance pay upon termination.