Singapore, a vibrant hub for global business, offers a fertile ground for companies keen on harnessing a diverse talent pool. The shift towards remote work and technological innovation has broadened access to skilled professionals, making adaptability and knowledge of local employment laws crucial. 

This guide aims to navigate you through Singapore's hiring landscape, ensuring you attract and retain the best by understanding tax laws, immigration policies, and creating a culturally resonant work environment, all with a personal, human touch.

What you need to know before hiring employees in Singapore

Job market in Singapore

Singapore's job market shines with its robust digital skill set, reflecting the nation's emphasis on technological innovation. This digital prowess makes Singapore a global hub for sectors like AI, cybersecurity, and machine learning, attracting companies eager to leverage such expertise.

However, the challenge of fostering gender diversity in leadership roles underscores the need for more inclusive workplace practices. This presents an opportunity for businesses to not only tap into Singapore's tech-savvy talent pool but also to lead by example in promoting diversity.

For those navigating Singapore's competitive job market, it's crucial to balance the drive for digital excellence with the commitment to inclusivity. This approach will not only harness the potential of Singapore's dynamic workforce but also contribute to a more equitable and innovative business landscape.

Singapore Hiring Trends

Singapore's 2024 hiring trends spotlight the burgeoning demand for digital skills, particularly in technology, cybersecurity, and financial services, reflecting the city-state's rapid stride towards a future shaped by digital innovation. Employers are responding to this shift by prioritizing workplace flexibility, enriching benefits packages, and fostering an environment conducive to continuous learning and skill development. These strategies aim not only to attract top-tier talent but also to prepare the workforce for the advanced roles necessitated by a digitally driven economy

As the landscape evolves, staying abreast of regulatory changes becomes crucial for businesses to integrate Singapore's tech-savvy professionals effectively. This approach will ensure that companies can leverage the full potential of Singapore’s dynamic talent pool to fuel growth and navigate the complexities of the modern digital marketplace.

How to hire employees from Singapore

1. Set up an entity in the country

For businesses targeting significant growth in Asia, Singapore offers a strategic advantage. Establishing a legal entity, like a Private Limited Company, is crucial for tapping into this potential. The process involves:

• Selecting the Right Business Structure: Whether it’s a subsidiary, branch office, or representative office, each serves different business needs.
• Registration and Compliance: Registering with the Accounting and Corporate Regulatory Authority (ACRA) and adhering to Singapore’s regulatory and tax environment are key steps.
• Navigating Legal and Tax Obligations: Understanding and complying with local laws ensures a smooth operation, positioning companies for sustainable growth in Singapore’s dynamic market

2. Hire independent contractors

Engaging independent contractors in Singapore offers flexibility and efficiency, fitting well within the city-state's vibrant business landscape. This arrangement allows:

• Operational Flexibility: Contractors provide services under specific terms, offering agility for project-based work.
• Legal Considerations: It’s essential to navigate contractual and tax obligations correctly, ensuring compliance with local regulations.
• Autonomy and Responsibility: While contractors bring specialized skills, they manage their tax filings and professional responsibilities, requiring clear agreements to ensure mutual understanding and compliance.

3. Partner with an EOR in the country

Leveraging an Employer of Record (EOR) service in Singapore simplifies the hiring process, allowing companies to focus on core operations without establishing a local entity. An EOR partnership offers:

• Compliance and Efficiency: EORs ensure adherence to Singapore's labor laws and manage administrative tasks like payroll, benefits, and tax filings.
• Strategic Flexibility: This approach enables businesses to quickly adapt to the Singapore market, reducing the legal complexities of direct hiring.
• Market Entry Support: By handling the intricacies of employment regulations, EORs provide a pathway for companies to engage with Singapore’s talent pool seamlessly, promoting growth and innovation.

Compliance risk while hiring in Singapore

Hiring in Singapore requires understanding its detailed Employment Act, covering employment contracts, worker classification, and rules for hiring foreign talent, to ensure legal compliance and reduce risks.

• Employment Act Compliance: Thorough knowledge of the Employment Act is essential for creating compliant employment contracts and understanding employer obligations.‍
• Worker Classification: Accurate classification of employees vs. independent contractors is critical to ensure compliance with benefits, tax obligations, and legal protections. Misclassification can lead to legal issues and fines.‍
• Employing Foreign Talent: Securing the correct work visas and permits for foreign professionals is mandatory, involving close cooperation with the Ministry of Manpower (MOM) to ensure smooth processing and compliance.
• ‍Social Security Contributions: Mandatory contributions to the Central Provident Fund (CPF) for Singaporean employees and permanent residents underscore the employer's role in employee welfare, covering aspects like health insurance and retirement savings.

Key Aspects of Singapore Labor Law

Employment Contract: 

While not legally mandated, formalizing employment contracts in writing is strongly recommended in Singapore. Doing so ensures clarity on terms and conditions, reducing the risk of disputes. These contracts delineate job roles, responsibilities, salary, work hours, and other essential employment details.

The Ministry of Manpower (MOM) suggests issuing written Key Employment Terms (KETs) to all relevant employees. These KETs cover critical aspects such as job scope, remuneration, and work arrangements, aligning with best practices and fostering transparency. Documenting these agreements is advised to safeguard the interests of both employers and employees effectively.

Working Hours:

In Singapore, the standard workweek is capped at 44 hours, aligning with Part IV of the Employment Act.

Overtime:

Overtime is remunerated at 1.5 times the usual hourly rate, with regulations stipulating that employees should not exceed 12 hours of work daily or 72 hours of overtime monthly. The distinction between white-collar and blue-collar workers dictates the maximum overtime pay, ensuring fair compensation within a timely 14-day period after a salary cycle ends.

Minimum Wage:

Singapore does not have a universal minimum wage, but sectors like cleaning, security, and landscaping have established their own minimum wage standards. Additionally, the Workfare scheme provides support to low-wage Singaporean workers aged 35 and over earning less than SGD 2,300 per month. This program aims to improve the financial well-being of eligible workers, reflecting Singapore's dedication to supporting its workforce.

Payroll laws in Singapore

Salaries are paid monthly, within seven days after the salary period ends. In cases of termination or resignation, the final payment is issued on the employee's last working day, ensuring a smooth and respectful transition.

Employment benefits in Singapore

Leave Policies in Singapore

1. Paid Time Off:

In Singapore, the law mandates at least seven days of annual leave, with employees earning an additional day off for each year of service, up to a maximum of 14 days. However, many companies go beyond the minimum, offering between 14 to 20 days of paid vacation annually, demonstrating a commitment to employee well-being.

2. Public Holidays:

Singapore recognizes eleven public holidays annually. If a public holiday falls on an employee's scheduled day off, the following working day is granted as a substitute day off. Additionally, when a public holiday occurs on a non-working day for an employee, they are entitled to either a day off in lieu or extra pay, depending on the company's policy, ensuring fair compensation for all employees.

3. Sick Days:

Employees earn 14 days of paid outpatient sick leave and up to 60 days for hospitalization after six months of service.

Sick leave entitlement for less than six months of service varies:

• Less than 3 months: 5 days (15 days with hospitalization).
• 3-4 months: 8 days (45 days for hospitalization).
• 4-5 months: 11 days (45 days for hospitalization).

Employees must inform their employer within 48 hours of their absence.

A medical certificate from a registered healthcare professional is required upon return.

4. Maternity Leave:

• Eligible expectant employees in Singapore receive 16 weeks of paid maternity leave if their child is a Singapore citizen, starting 3 months before the due date. This period is split, allowing up to 8 weeks before birth.
• For non-Singaporean children, maternity leave is 12 weeks. Employers cover the first 8 weeks' salary for the first two children, with the government reimbursing additional weeks up to S$20,000.
• From the third child onwards, the government covers all 16 weeks of maternity leave, offering up to S$20,000 in reimbursement, ensuring families are supported during these early stages

5. Paternity Leave:

Employees are entitled to two weeks of paid paternity leave, provided their child is a Singapore citizen, the marriage to the child's mother was valid from conception through birth, and they have been employed continuously for at least three months prior to taking leave. This policy supports fathers in balancing work and family commitments, aligning with the needs of modern families.

Public Health Insurance 

Singapore's healthcare financing model, known as the 3Ms, combines individual responsibility with societal support, ensuring universal access to healthcare:

• MediShield Life provides a universal safety net, covering all citizens and permanent residents against large medical bills throughout their lives, showcasing a commitment to lifelong health security since its introduction in 2015.
• MediSave allows individuals to directly manage their healthcare expenses through mandatory savings from their earnings, promoting a culture of financial prudence and personal accountability for healthcare costs.
• MediFund represents the nation's compassionate approach, offering financial assistance to those in need, ensuring that no one is denied necessary medical care due to financial limitations.

This succinct overview demonstrates Singapore's innovative approach to healthcare financing, tailored for an audience already familiar with the basics and seeking deeper insights into effective healthcare solutions.

Filing tax in Singapore

Income Tax:

Singapore's income tax structure is designed to be progressive, ensuring fairness and affordability for all. Here’s a simplified breakdown:

• No tax for incomes up to SGD 20,000, making the system approachable for those starting their careers.
• Marginal rates increase gently from 2% to 22% for incomes above SGD 320,000, reflecting a commitment to supporting individuals across different earning brackets.

This structure not only facilitates financial planning but also reinforces Singapore's dedication to equitable economic participation for its residents. Visit our comprehensive guide.

Other Tax and Social Security Contributions:

In Singapore, the financial contributions towards employees’ welfare and skill development are meticulously structured to ensure both growth and security. Here’s an overview:

Employer Contributions:

• The Central Provident Fund (CPF) sees employers contributing 17% for employees under 55, with a gradual decrease to 7.5% for older employees, ensuring a pension for their retirement.
• A Skills Development Levy (SDL) at 0.25% funds initiatives for enhancing workforce capabilities.
• Employing foreign workers incurs a surcharge of USD 350, with an additional SGD 450 for S PASS holders, aligning with Singapore’s focus on skill specialization. Overall, the total employment cost for employers varies between 17% to 17.25%, plus specific surcharges for foreign employees.

Employee Contributions:

Employees contribute 20% to their CPF if they are below 55 years, decreasing to 5% as they age, underlining the importance of self-sufficiency in retirement planning.

This results in a total employee cost of 20%, inclusive of CPF contributions and income tax, fostering a balanced investment in their future, please refer to our detailed guide.

Business culture in Singapore 

• Singapore is renowned for its highly competitive business environment, consistently ranking at the top in global indices.
• A collective approach is preferred, focusing on group harmony and consultation, reflecting the value placed on consensus over individual decision-making.
• Active engagement in business events and seminars is crucial for forging potential partnerships and client relationships, highlighting the significance of networking.
• The business culture respects hierarchy, with a clear reverence for seniority and authority in decision-making, indicating the importance of understanding and navigating corporate structures.
• While not common, gift-giving requires careful consideration to avoid misinterpretation, with a preference for showing appreciation through meals or non-material gestures.
• Singapore's status as a key international trade hub offers businesses a strategic advantage for expansion into the Asian markets, emphasizing its role in facilitating broader business opportunities.

Top sectors to hire from in Sinagpore 

Services Sector: 

Dominating employment with two million residents working within this sector as of 2022, especially in financial services, reflecting Singapore's strong service-oriented economy.

IT & Data: 

This sector is highlighted due to the challenges in finding skilled professionals, with 37% of employers noting difficulty in hiring for IT and Data skills. The emphasis on digital transformation and technological advancements makes it a key sector for recruitment.

Sustainability/Environmental and ESG:

With a combined 42% of employers finding it challenging to hire for Sustainability/Environmental skills and ESG Risk/Advisory/Governance skills, this area is rapidly growing in importance. The shift towards the green economy and sustainability practices positions it as a significant sector for future hiring.

Technology and AI: 

Despite a decrease in software development postings in 2023, the sector remains vibrant, with AI-related jobs seeing an increase, notably three times higher than in the US and over four times than in the UK, highlighting Singapore's leading role in AI development and application.

Top cities to hire from Singapore

Singapore, recognized for its strategic economic sectors and diverse talent pool, doesn't have separate cities but consists of various regions and planning areas, each serving as a hub for different industries.

The Central Business District (CBD), encompassing areas like Raffles Place, Marina Bay, and Tanjong Pagar, stands out as a prime location for financial services, legal firms, and corporate headquarters. This area attracts businesses looking for a prestigious address and proximity to like-minded corporations and financial institutions.

One-North is particularly designed to nurture businesses in Biotech, Information Technology, and Media, making it a go-to area for technology startups and research-driven enterprises. Its infrastructure and community support innovations and collaborations across these sectors.

Jurong East, evolving into a significant commercial hub, appeals to companies in manufacturing and engineering due to its closeness to industrial estates and plans for further commercial development, enhancing its attractiveness for business operations.

Changi, known globally for its efficient airport, is a pivotal center for logistics, aviation, and transport companies, benefiting from unparalleled connectivity and infrastructure that supports operations in these industries.

Woodlands, positioned strategically near Malaysia, is advantageous for businesses engaged in cross-border trade, offering unique opportunities for companies looking to tap into markets in both Singapore and Malaysia

Hire in Singapore compliantly with Gloroots

Gloroots offers a robust Employer of Record (EOR) service in Singapore, designed to streamline the hiring process for businesses. The platform enables quick candidate onboarding, ensuring companies can swiftly commence operations while adhering to both local and international regulatory standards. Ideal for any organization size, Gloroots simplifies payroll, benefits management, and tax commitments, removing the need for a local legal entity. 

This service model supports companies in effectively establishing a remote workforce within Singapore. For organizations, CEOs, and startups seeking efficient solutions for their Singaporean employment needs, Gloroots provides a comprehensive approach. For more information on how Gloroots can support your hiring objectives in Singapore, reaching out directly is encouraged.

Frequently Asked Questions 

1. What constitutes the primary foundations of employment law in Singapore?

The Employment Act 1968 is the cornerstone, supplemented by the Child Development Co-Savings Act, Employment of Foreign Manpower Act, Retirement and Re-employment Act, Work Injury Compensation Act, and Workplace Safety and Health Act. Guidelines from TAFEP also influence employment practices.

2. Are contracts of employment required to be in writing in Singapore?

While not mandatory, written contracts are recommended to minimize disputes. Employers must issue Key Employment Terms in writing to employees covered under the Employment Act who are employed for at least 14 days.

3. What types of workers are protected by employment law in Singapore?

Most employees are covered except for seafarers, domestic workers, statutory board employees, or civil servants. Part IV of the Employment Act, detailing work conditions, applies specifically to workmen with a basic monthly salary not exceeding S$4,500 and other employees with a salary not exceeding S$2,600.

4. How are different types of workers distinguished under Singapore law?

Workers are classified based on their employment contract terms, distinguishing between contracts of service (employees) and contracts for service (independent contractors).