Key features of our Singapore employment solutions :
- Fast market entry (onboard staff within days, guided by experienced professionals ) ,
- Compliance ( avoid local foreign exposure, services provided by local experts )
- Holistic Solution ( End to end support, benefitting your company and your staff )
- Streamlined Process ( reduces the cost, resources required to maintain a presence )
- Scalable ( from a single employee to large teams, with fixed, easily forecast fees )
So who uses our PEO / EOR solutions in Singapore ?
They may be companies who are:
- Testing the market
- Moving independent contractors to more compliant solutions
- Post-merger restructuring
- Hiring staff for short or fixed term
- Streamlining operations across multiple countries
- Fast-tracking market entry
- Making the first step before entity establishment
- Seeking to reduce overheads
- Dispatching staff to their client’s location
Our Services
- Structuring Advisory
- Human Capital Management
- Accounting and Payroll
- Tax Compliance Services
- Establishment of Local Entities
- Ad Hoc Consulting
Income Tax in Singapore
In Singapore, there are no monthly employee or employer withholding tax contributions remitted to any Government authority. The individual tax must be submitted by March 30th each year and report the employee’s income from the previous calendar year to the Inland Revenue Department (IRD). It is the employee’s responsibility to file the annual tax declaration and remit necessary taxes to the IRD.
Income Tax Rate
| Taxable Income S$ |
Income Tax Rate |
Gross Tax Payable S$ |
|
|
|
| First 20,000 |
0% |
0 |
| Next 10,000 (up to 30,000) |
2% |
200 |
| Next 10,000 (up to 40,000) |
3.5% |
550 |
| Next 40,000 (up to 80,000) |
7% |
3,350 |
| Next 40,000 (up to 120,000) |
11.5% |
7,950 |
| Next 40,000 (up to 160,000) |
15% |
13,950 |
| Next 40,000 (up to 200,000) |
18% |
21,150 |
| Next 40,000 (up to 240,000) |
19% |
28,750 |
| Next 40,000 (up to 280,000) |
19.5% |
36,550 |
| Next 40,000 (up to 320,000) |
20% |
44,500 |
| Above 320,000 |
22% |
44,500 + 22% each dollar above 320,001 |
|
|
|
Current at January 2021. This for information purposes only.
It should be noted that for foreign employees despite their being no withholding tax obligations, employees are required to withhold one month of the employee’s salary and seek tax clearance for its foreign employees by submitting IR21 Form to the IRS with a notice period of one month in the following circumstances:
- An employee stops working in Singapore
- An employee leaves Singapore for a period longer than three months
- An employee has accepted an overseas posting
Tip!
The Inland Revenue Department and the Singapore immigration authority, the Ministry of Manpower, are closely linked and share data. It is a common practice for expatriates ending an assignment in Singapore to be required to evidence to airport immigration officials that all outstanding taxes have been settled with the IRS before departure is cleared.
The Eos tax team is pleased to discuss Singapore tax matters and assist with your Singaporean tax obligations.
Social Insurance in Singapore
Singaporean citizens and permanent residents and their employers are required to contribute to the Central Provident Fund (CPF) calculated on a monthly salary. Most individuals contribute 20% of their salary with a maximum contribution of SGD 1,200. The employer contributes 17% of an employee’s salary with a maximum contribution of SGD1,020. The contribution rates are subject to change.
Foreign nationals are not permitted to be part of the CPF. The employer is required to pay both the employee and employer contributions to the CPF on a monthly basis. It is permitted for the employer to recover the employee’s share directly from salary through payroll.
CPF is a comprehensive social security savings plan that provides working Singaporeans citizens and permanent residence with security in retirement. The CPF encompass the following:
- Retirement
- Healthcare
- Home Ownership
- Family Protection
- Asset Enhancement
The employer is required to remit funds monthly into three separate CPF accounts:
- Ordinary Account: Funds to buy a home, CPF insurance, and investment
- Special Account: For older age and retirement investment
- Medisave Account: Hospitalization and approved medical insurance residency status, and type of earnings.
Eos is pleased to manage your payroll for you and to make necessary remittances to the CPF. We would be pleased to further discuss.
Hiring foreigners – Immigration in Singapore
All foreigners working in Singapore must have appropriate approvals from the Singapore immigration authorities – the Ministry of Manpower. In some instances, it may be possible to enter the country under a visa waiver program or visitor visa to participate in business meetings and preliminary research activities but these do not constitute permission to work.
Foreign nationals intending to engage in productive work activities in Singapore will require work authorization. The standard work authorization categories include the Employment Pass, S Pass, and Personalized Employment Pass, depending on the earnings, skills, relevant work experience, and educational qualifications of the applicant. Employment Pass and S Pass applicants in Singapore must be sponsored by an actively operating Singapore-based entity.
The S Pass is granted to foreign nationals in a mid-level, skilled profession (e.g., construction, manufacturing, healthcare, finance, etc.) earning a fixed monthly salary of at least SGD2,500 as at December 2020. Please refer to the Singapore Government’s Ministry of Manpower website at https://www.mom.gov.sg/passes-and-permits/s-pass/eligibility for confirmation of current salary and other details.
The Employment Pass (EP) is granted to foreign nationals working in managerial, executive, or specialized jobs. Applicants earning a fixed monthly salary of at least SGD4,500 as of December 2020 and possessing recognized qualifications are eligible to apply for the EP. Please refer to the Singapore Government’s Ministry of Manpower website at Employment Pass – Before you apply for confirmation of your current salary and other details.
The Personalized Employment Pass (PEP) is granted to highly qualified foreign nationals. The PEP is not linked to a specific employer. Foreign nationals who hold a PEP can switch jobs without re-applying for a visa as long as they are not unemployed for more than six months. Qualifying applicants must meet specific minimum salary requirements based on the location of their current/last payroll in order to be considered for the PEP. As at December 2020, PEP applicants converting from a current Employment Pass (EP) in Singapore must earn a monthly salary of at least SGD12,000. As at December 2020, PEP applicants who do not hold a current EP must prove income outside of Singapore equivalent to a minimum of SGD 18,000 per month for the six months immediately prior to the application date. Please refer to the Singapore Government’s Ministry of Manpower website at https://www.mom.gov.sg/passes-and-permits/personalised-employment-pass/key-facts for confirmation of current salary and other details.
The applications for the Employment Pass and S Pass are filed online with the Ministry of Manpower (MOM). The Personalized Employment Pass application is submitted manually to the MOM. Upon approval of the application, foreign nationals will be issued an In-Principle Approval Letter (IPA) with a limited validity period. If the foreign national is in Singapore on a Short Term Visit Pass (SVP) while the Pass application is pending and that SVP expires prior to Pass approval, MOM will not approve an SVP extension. If the foreign national is not in Singapore, he/she may enter the country using the IPA as a single-entry visa. After arrival in Singapore, some applicants may be required to complete a medical examination. All foreign nationals that have been granted an IPA will need to obtain a work pass identification card from MOM by making an e-appointment for registration formalities (fingerprinting and photo-imaging). In order to schedule the biometric appointment, the employer (or the employee in the case of PEP) must first request the issuance of the work pass. Employers should also note that the issuance request must be completed in order for the foreign employee to commence work. The physical card will be available four to five days after the completion of the biometrics appointment.
Payroll/Contract Requirements
|
S Pass |
Employment Pass |
Personalized Employment
Pass |
| Payroll Requirement |
Local or Foreign |
Local or Foreign |
Local or Foreign |
| Contract Requirement |
Local or Foreign |
Local or Foreign |
Local or Foreign |
| 3rd Party Client Site
Allowed |
Yes; worksite must be indicated on the application. |
Yes; worksite must be
Indicated on the application. |
Yes; worksite must be
indicated on the application. |
For most occupations, a bachelor’s degree or higher will be required. Anyone who does not have a bachelor’s degree should have multiple years of relevant work experience. Any substitution of work experience for education will be assessed at the discretion of the reviewing officer.
Work Permit Duration and Maximum Authorized Period of Stay
Both Employment Passes and S Passes are issued for multiple entries and are generally valid from 12-24 months. Both the Employment Pass and the S Pass may subsequently be extended in-country for up to 36 months at MOM’s discretion. Currently, no limits exist on the number of extensions that may be granted.
Exit Requirements
The Employment Pass and S Pass must be canceled upon termination of employment. The employer must cancel the pass electronically within seven days of termination. The actual EP card must be returned to the MOM within seven days of cancellation. Once canceled, a 30-day Short Term Visit Pass will be issued to the foreign national, which must be presented to the Immigration Checkpoint Officer at the point of departure.
A financial penalty of SGD 10,000 is detailed in the Employment of Foreign Manpower Act for not complying with the cancelation requirements.
Processing Time and Location
Employment Pass and S Pass applications are filed online with MOM in Singapore. Processing times at MOM vary but generally take up to 15 working days from the date of submission for approval. Foreign nationals may be in-country or overseas at the time of filing the work pass application, but they must be in the country for the issuance of the pass and completion of the registration formalities.
Employer Compliance
Upon arrival in Singapore, the Employee may legally start working when the work pass issuance process has been completed and the Notification Letter is available. Owing to the tightening of regulations, the MOM may audit academic records and claimed salary declarations for both Employment Pass and S Pass applications. The government will prosecute foreign nationals for submitting false information. Penalties may include prison terms of up to 24 months or fines up to SGD 20,000 for both employees and employers if the employer or its agent is found complicit in the submission of forged documentation.
Foreign nationals found violating other Singapore labor laws will be subject to fines, terms of imprisonment, an entry bar or punishment by caning, as determined by MOM.
In January 2020, MOM strengthened its Fair Consideration Framework for greater deterrence against workplace discrimination. MOM has raised the administrative penalties across the board for all discrimination cases:
- The minimum period for work pass debarment has increased from 6 months to 12 months. For extremely serious breaches, the debarment period can be up to a maximum of 24 months’
- The debarment scope has expanded to include work pass renewals in addition to new work pass applications.
In addition, MOM will prosecute key company personnel who make false declarations that they have considered all candidates fairly. Key personal convicted of a false declaration under the Employment of Foreign Manpower Act will face imprisonment of up to 2 years or a fine of up to SGD20,000 or both.
EOS is able to provide an end-to-end immigration solution. We have a team of immigration experts that is able to arrange the appropriate employment visa. As identified staff are considered our employees under an EOR agreement we are permitted to sponsor the selected individuals (and accompanying family members). We manage the entire process and are responsible for ensuring immigration compliance is maintained with the various government entities at all times.
After visa approval, the individual can perform their designated duties to your business and is able to assist your company to expand operations and increase profitability in Singapore.
Tip!
Newly established companies may find visa applications take longer to process and have a higher chance of rejection. This is one advantage of using a PEO/EOR/GOE outsourced employment solution.
Hiring and Termination of Staff in Singapore
Singapore has a modern industrial relations system regulated by the Employment Act through the Ministry of Manpower. The Employment Act covers Singapore citizens, Singapore permanent residents, and foreign nationals working in Singapore under a contract with an employer.
The Act specifies:
- An employee can be employed on a full-time basis, part-time basis (less than 35 hours per week), temporary basis or contractual basis
- An employee may be paid hourly, daily, monthly or pro-rated
- Specifies working hours for manual workers and lowly paid professional workers
Employment Contracts: It is usual for an employer and employee to have a signed, written contract in place that specifies the employee’s compensation, benefits, duration of employment (if fixed term), working arrangements and termination processes.
There is no minimum salary in Singapore, however, the Ministry of Manpower will expect the salary offered is at a market rate for that particular occupation.
Eos will provide a standard template, compliant under local labor law. We can revise this to include certain terms and conditions at your request, as long as they are acceptable under Singapore law
Probation Periods: Probation is not regulated. It is common practice for an employment contract to have a probation period of 3-6 months during which time termination is more straightforward.
Working Hours: The maximum working week for individuals covered under the Employer Act is 44 hours per week. Professionals not covered by the Act do not have defined working hours.
Overtime: For individuals covered under the Employer Act overtime is payable. Please refer to the Singapore Government’s Ministry of Manpower for further details at https://www.mom.gov.sg/employment-practices/salary/calculate-overtime-pay.
Notice Period: The notice period must be the same for the employer and employee. It is best practice for the notice period to be specified in the employment contract with the usual period being 1 month. It is possible to waive the notice by mutual consent.
Tip!
It is common practice in Singapore to pay a bonus in December often referred to as the ’13 Month Payment’. Whilst the payment is not compulsory many employees provide this as an annual bonus to employees.
Other Notes:
- Public holidays – 12 days
- Annual leave – 7 days for the 1st year and add one day for each additional year of service capped at 14 days. For senior appointees, it is common to negotiate additional annual leave days.
- Maternity leave – Eligible mothers are entitled to 16 weeks of paid maternity leave funded jointly by the Singapore Government and the employer
- Paternity leave – Eligible fathers are entitled to 2 weeks of paid paternity leave funded by the Singapore Government
- Sick leave – After 6 months of employment, 14 days of paid non-hospitalized sick leave, and 60 days of paid hospitalized sick leave
- Average working week – 44 hours
- There is no minimum wage, however, the salary must be at the market rate
- Payroll – salary must be paid at least once a month
- Payslip – must be provided online, PDF or paper formats
Are you ready to take your next step in expansion into Singapore?
The Eos team will discuss your goals with your management team and help you define your strategy in a local context. We can then provide a PEO/GOE proposal with bespoke services aimed at getting you where you want to be.
Once you`re ready, your staff will be onboarded with locally compliant employment contracts customized with your preferred terms and conditions. Any visa issues for your ex-pats and their dependents will be managed by Eos immigration professionals to ensure a smooth start to their new deployment.
From there, we will manage the payroll, tax, and benefits like any employer, based on a monthly consolidated invoice for salaries, expenses, and services, so you can get on with your primary goal – growing your business !
Please note that the information provided is for your general guidance only, and Eos accepts no liability for its contents. It is important to seek professional advice for specific questions that affect your individual situation
