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What You Need to Know Before Hiring Employees in Singapore

Last modified: February 10, 2021
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What You Need to Know Before Hiring Employees in Singapore

After the successful Singapore company incorporation, your first thought would be to keep things simple for the time being. You want absolute control over your expenses. You have decided to multitask as much as possible. You intend to bring in extra hands after the business has taken root. Are you at this crossroad?

Employing Singaporeans and permanent residents poses no difficulty. They do not need any work pass or visa. However, if you need to employ foreigners for your Singapore company, you must know how to apply for their work visas or passes like employment pass Singapore, S pass, and etc.


Things You Must Know to Hire Employees for Your Singapore Company

Singapore Employment Act

Singapore Employment Act (Chapter 91) regulates the hiring, employing and firing of employees of a Singaporean company. It defines how the contract between the employer and employee works.

Both, employing companies and their employees can add or subtract clauses from the employment contract, the resulting employment agreement, appointment letter or offer letter ought to be within the framework of the statutory requirements defined by the Employment Act and common law.


Employment of Foreign Manpower Act (EFMA)

EFMA governs all the appointments of foreign employees of a Singapore company. The provisions like compensation for work-related injuries, maternity benefits, & childcare leaves for parents are actually defined by the Singapore employment Laws. However, these are also applicable to foreign employees.

  • Singapore Work Visa: If you are thinking of employing basic-skilled foreigners, you will need to apply to MOM get work visas for them.
  • S Pass: If you are thinking of appointing a bunch of technicians which considered as a job needing mid-level skills, you will need to get S passes for them.
  • Employment Pass Singapore: If you want to hire experienced and certified professionals, managers, or executives for your company in Singapore, you have to choose someone who will pass the employment pass eligibility requirements.

Read about:Guide for Employment Pass Singapore

Employment pass Singapore eligibility requirements include:

  • Manager, executive or socialist role
  • Earn at least $4,500 in a fixed monthly salary (higher for experienced foreign applicants)
  • Acceptable qualifications and certifications


Singapore Employment Contract/Agreement Or Appointment/Offer Letter

A generic Singapore employment agreement includes:

  • Date of commencement
  • Salary details including basic pay and allowances
  • Duties and job profile
  • Work hours and overtime provisions (if needed)
  • Annual leave details (Up to 14 statutory annual leave)
  • Sick leave details including minimum statutory sick leave, hospitalization leave, leave without pay
  • parental and childcare leave provisions of 8 weeks for foreign employees
  • Resignation, termination and notice period
  • Confidentiality clause


Statutory Filings

You need to know the mandatory statutory contributions like CPF and SDL that you have to pay per each employee.


CPF (Central Provident Fund)

As a Singapore employer, you need to pay CPF for your Singapore resident employees. Each month you must pay employer’s and employees share as per the CPF rates.


SDL (Skill Development Levy)

You need to pay your SDL contribution (between $2-$11.25) for all your employees. These contributions are used to fund workforce upgrading programs and training grants for employers.


Foreign Workers Levy

You need to pay foreign worker levy (between S$315-S$550) for each of your Work Permit and S Pass holding employee.


Other Key Points in Singapore Employment Contract

Your Singapore employment contract should also contain:

Changes in employment terms: You, as an employer, cannot change terms and conditions in the employment contract, if such a possibility is not specifically mentioned in it.

Confirmation of employment: Confirmation of employment depends on the specifics mentioned in the contract.

Accepting resignation letter: Singapore Employment Act permits employees to resign any time by serving their notice period or by buying it. If you do not permit them to leave, you may face S$1,000 or six-month imprisonment.

Tax clearance: As an employer, it is your duty to see to it that your non-resident foreign employees pay their tax dues before leaving your company or Singapore. You need to notify IRAS a month in advance and seek tax clearance for the agency.

SBS Consulting is a registered filing agent and is fully capable of assisting you in your Singapore company incorporation task. If you have any questions, call us on +65 6536 0036 or email us at info@sbsgroup.com.sg for answers.

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