In the fast-evolving landscape of today’s global workforce, hiring and managing remote workers has become not just a trend, but a strategic imperative for businesses seeking to expand their operations around the world. One location that has emerged as a particularly attractive destination for remote work is Singapore. The Lion City, nestled in the heart of the Asia-Pacific (APAC) region, offers a host of compelling advantages for employers and remote workers alike.
In this comprehensive guide, we will explore the advantages of hiring a remote worker in Singapore. From the unparalleled mobility that comes with a Singapore passport, allowing citizens to fly almost anywhere in the world without the hassle of obtaining a visa, to the allure of low income tax rates and the presence of a highly educated and English-proficient workforce, Singapore presents a unique proposition for businesses seeking to tap into the APAC region.
But this article goes beyond mere attraction – it delves deep into the practical aspects of hiring and paying remote workers in Singapore. We will discuss where and how to find remote candidates, the intricacies of the hiring and payment processes, and the critical considerations surrounding compensation, benefits, and income taxes in this vibrant city-state. Additionally, we will shed light on the specific labor law highlights that pertain to remote workers.
Advantages of hiring a remote worker in Singapore
APAC Region Mobility:
Singapore’s strategic location and the fact that Singaporean passport holders can travel to numerous countries without requiring a visa is a significant boon for businesses. Senior professionals often need to engage with various stakeholders and clients across the Asia-Pacific (APAC) region. Having a Singapore-based remote worker with easy access to other APAC countries ensures seamless communication and collaboration, reducing the logistical hurdles that can be associated with long-distance partnerships. This mobility can also facilitate in-person meetings and strengthen relationships with clients and partners in the region, which can be crucial for senior positions.
Low Income Tax:
Singapore is well-known for its favorable income tax rates, making it an attractive destination for senior talent. The city-state’s progressive tax system ensures that higher earners benefit from relatively low tax rates compared to many other countries. This means that senior professionals can enjoy a more significant share of their income, providing a financial incentive for companies to consider remote workers based in Singapore.
High Education & English Proficiency:
Singapore boasts a well-developed education system and a highly skilled workforce. When hiring senior remote workers, the advantage of a strong educational background is evident in their ability to adapt quickly, think critically, and provide innovative solutions. Furthermore, Singaporeans have a high level of English proficiency, which is a significant asset in today’s globalized business world. Effective communication in English is often essential, especially in senior roles that require leadership, strategic planning, and international collaboration. The combination of high-quality education and strong English language skills makes Singapore a prime source of senior talent for remote positions.
Where to Find Remote Candidates in Singapore
When it comes to finding remote candidates in Singapore, you have a range of options that cater to different levels of experience and expertise. Whether you’re looking for fresh graduates and interns or seasoned professionals, Singapore offers a diverse talent pool. Here are some reliable sources to consider:
Hiring Fresh Graduates & Interns in Singapore
Universities:
Singapore is home to world-renowned universities, such as the National University of Singapore (NUS), Nanyang Technological University (NTU), and Singapore Management University (SMU). These institutions are treasure troves of young, ambitious talent. These universities have career services departments that facilitate connections between students and potential employers, making it easier to find fresh graduates interested in remote work opportunities. Participating in campus career fairs and job posting platforms within these universities can be a productive way to identify young talents.
InternSG:
Platforms like InternSG specialize in connecting employers with interns. Posting your remote internship opportunities on such platforms can attract enthusiastic students eager to gain real-world experience while working from home. InternSG, in particular, is a dedicated platform in Singapore that caters to the internship needs of students and fresh graduates.
Hiring Experienced Talent
Popular Online Job Listings Sites/Apps in Singapore:
Singapore has a robust online job market with several well-established platforms. Websites like LinkedIn, JobsDB, and Indeed have extensive networks of professionals actively seeking remote job opportunities. Create detailed job listings and use targeted keywords to reach the right candidates.
Some of the most popular job listing platform in Singapore include:
Networking Events and Conferences:
Singapore hosts numerous networking events, conferences, and meetups throughout the year. While these events may have shifted to virtual formats in recent times, they still provide opportunities to connect with experienced professionals in your field.
Professional Associations:
Many industries in Singapore have professional associations or societies. Joining these organizations or attending their events can help you tap into a network of experienced individuals who may be open to remote work opportunities.
Remember, the key to finding the right remote candidates in Singapore is to tailor your approach to your specific needs and industry. Be clear about your job requirements, offer competitive compensation, and engage with potential candidates through personalized outreach.
Hiring Remote Workers in Singapore
Establishing an Entity in Singapore:
To hire employees in Singapore on a full-time basis, one common route is to set up a legal entity in the country. This typically involves registering a company, complying with local regulations, and adhering to tax requirements. This approach grants your organization full control over employment terms, benefits, and policies. However, it also comes with administrative responsibilities and may take time and resources to set up. Establishing a company in China to hire local talent comes with its unique set of advantages and disadvantages:
Pros:
Greater Control: Unlike other employment structures, companies have full control over their employees. This arrangement promotes company culture, loyalty, and operational alignment.
Cons:
Regulatory Complexity: The Chinese legal and business environment is known for its opacity, complexity, and frequent changes. Foreign companies often face bureaucratic hurdles, strict regulations, and compliance issues.
Expensive & slow: Establishing a legal entity in China takes 2-3 months and requires capital to set up and sustain.
Using an Employer of Record:
Alternatively, you can partner with an Employer of Record (EOR) service provider, such as NNRoad. An EOR acts as the legal employer for your remote workers in Singapore, handling payroll, taxes, compliance, and HR matters on your behalf. NNRoad and similar providers can simplify the hiring process and allow you to quickly onboard remote workers without the need to establish a legal entity in Singapore. Utilizing an Employer of Record (EoR) in China to hire employees offers several advantages and disadvantages:
Pros:
Regulatory Compliance: An EoR is well-versed in local labor laws, tax regulations, and employment rights, ensuring that the hiring process is compliant with Chinese regulations, reducing legal risks for foreign companies.
Speed and Efficiency: An EoR can expedite the hiring process, enabling companies to quickly establish a workforce in China without the need for setting up a legal entity, which can be time-consuming and complex.
Cost-Effectiveness: Companies can save on the substantial costs associated with establishing a foreign entity and managing a foreign workforce, including legal fees, office space, and administrative costs.
Localized HR Expertise: EoRs provide expertise in local human resource management practices, including payroll, benefits, and dispute resolution, which can be challenging due to cultural and language differences.
Cons:
Lesser Control: Companies might face limited control over their employees as the EoR technically employs the staff. This arrangement might affect company culture, loyalty, and operational alignment.
Hire Independent Contractors:
In China, independent contractors are professionals hired to perform specific tasks or projects without being considered employees of the hiring company. They offer operational flexibility and cost efficiencies to businesses, as they work on a contractual basis, often specializing in particular fields or industries. However, the regulatory environment in China imposes stringent rules on contract labor, and companies must be cautious to correctly classify such workers to avoid legal repercussions for misclassification. While independent contractors present a viable option for accessing skilled talent without the commitments of full-time employment, companies engaging with them also face challenges related to loyalty, control, and intellectual property protection.
Pros:
Cost Efficiency: Independent contractors eliminate the need for companies to pay for benefits, taxes, insurance, or other costs associated with full-time employees. This can significantly reduce labor costs.
Flexibility: Contractors can be hired on a project-to-project basis, offering companies the flexibility to scale their workforce up or down based on current business needs without the commitments associated with permanent staff.
Cons:
Lack of Loyalty and Control: Contractors may work for multiple clients and thus may not be as committed or loyal as full-time employees. Also, companies have less control over these workers as they cannot impose the same level of supervision or demand adherence to internal policies as they would with employees.
Intellectual Property Risks: Without the proper contracts in place, companies might face risks related to intellectual property rights since contractors could have the right to the work they produce, and it might not automatically belong to the hiring company.
Employee Misclassification: The Chinese government is increasingly scrutinizing contract labor. Misclassifying employees as contractors can lead to significant legal issues and penalties, including fines and legal backlash. Companies must be diligent in classifying workers correctly to avoid punitive measures.
What is an Employer of Record (EOR)?
An EOR or Employer of Record is a third-party organization that assumes the legal responsibilities of being an employer. They hire and manage employees on your behalf, handling payroll, tax withholdings, benefits, and compliance with local labor laws. Essentially, the EOR acts as the intermediary between your company and the remote workers, ensuring that all legal and administrative requirements are met.
Paying Remote Workers in Singapore
NNRoad takes care of the payment process for your employees in Singapore. They manage payroll and ensure that employees receive their salaries and benefits. This includes calculating income tax, social security contributions, and other deductions in accordance with local laws. Employers transfer funds to NNRoad, who then distribute payments to the employees as per their employment contracts.
Can remote employees in Singapore be paid in foreign currencies?
In most cases, Singaporean employees are required to be paid in Singaporean Dollars (SGD). However, if you are working with an EOR service provider like NNRoad, can facilitate the payment process in foreign currencies such as USD, EUR & CNY, simplifying the process for your organization.
NNRoad can facilitate the conversion and distribution of payments in foreign currencies, adhering to exchange rates and ensuring that all relevant taxes and deductions are correctly applied. This flexibility is often appreciated by employees who may have financial commitments or preferences in other currencies.
Salaries in Singapore:
Average salary
Singapore is known for its strong and stable economy, which is reflected in the salaries offered to its workforce. The average salary in Singapore varies widely depending on factors such as industry, job role, experience, and education. However, it’s generally higher than the global average.
The average salary in Singapore in 2023 is around S$70,000. Full-time workers in Singapore on average make S$5,783 a month, equating to S$69,396 a year. This figure is significantly influenced by the financial services, technology, and healthcare sectors, where salaries tend to be substantially higher than in other industries. For senior professionals, particularly in sectors such as finance and IT, six-figure salaries are not uncommon.
Singapore’s attractiveness to expatriate professionals also contributes to higher average salaries. The government has implemented policies to attract and retain top international talent, further driving up average compensation levels.
It’s worth noting that salaries in Singapore are typically structured to include bonuses, allowances, and benefits, which can significantly add to the overall compensation package. Additionally, the cost of living in Singapore is relatively high, and salary levels often reflect this.
Minimum wage
Because Singapore does not have a minimum wage, there is no mandatory minimum rate of pay for workers in Singapore. Pay rates must be agreed upon directly with the employer through collective bargaining or other means of negotiating a fair living wage.
What is the Singapore Minimum Wage?
Singapore’s Minimum Wage is the lowest amount a worker can be legally paid for his work. Most countries have a nation-wide minimum wage that all workers must be paid.
Singapore has no minimum wage laws or regulations. However,two exceptions were made recently: Cleaner jobs to have a minimum wage of $1,000 per month effective January 2014 and Security guards have a minimum wage of $1,100 per month effective September 2016. Singapore’s minimum wage was last changed on 1-Sep-2016.
The absence of a minimum wage policy is due to the country’s belief in maintaining flexibility in its labor market and allowing employers and employees to negotiate wages based on their skills, experience, and industry standards.
However, it’s important to note that the absence of a minimum wage does not mean that employees are left without protection. The Singaporean government has put in place various labor laws and regulations to ensure fair employment practices. For instance, the Ministry of Manpower (MOM) regularly reviews and revises the guidelines for salary levels, ensuring that they remain competitive and commensurate with the cost of living in the country.
Overall, while there isn’t a statutory minimum wage in Singapore, the combination of government regulations and strong economic conditions generally results in reasonable and competitive wage levels, especially in comparison to many other countries. It’s advisable for job seekers to research industry-specific wage standards and consider the overall compensation package, including benefits and bonuses, when evaluating job offers in Singapore.
Income taxes in Singapore
Singapore’s income tax system is known for its simplicity, progressive rates, and attractive tax incentives. As of my last knowledge update in September 2021, the country’s income tax system is structured based on individual tax residency status. Here’s an overview of the income tax framework:
Tax Residency:
Residents: Singaporean tax residents are individuals who are Singaporean citizens or permanent residents or foreigners who have lived or worked in the country for 183 days or more in a tax year. Residents are taxed on their Singaporean and overseas income, but they can benefit from various tax reliefs and credits.
Non-Residents: Non-residents are only taxed on income earned in Singapore. They do not receive the same tax benefits and reliefs as residents.
Progressive Tax Rates:
Singapore’s personal income tax rates are progressive, with higher income levels subject to higher tax rates. As of my last update, the tax rates for residents for the assessment year 2021 (income earned in 2020) were as follows:
0% on the first SGD 20,000 of chargeable income
2% on the next SGD 10,000
5% on the next SGD 10,000
7% on the next SGD 40,000
11.5% on the next SGD 40,000
15% on the next SGD 40,000
18% on the next SGD 40,000
19% on the next SGD 40,000
20% on the amount exceeding SGD 320,000
Taxable Components of Salary:
In Singapore, not all components of a salary are taxable. The taxable components typically include:
Employment income, which comprises wages, salaries, bonuses, and allowances.
Director’s fees.
Pension and other retirement income.
Rent or property income.
Gains from stock options or awards.
Non-taxable components include:
Gifts and inheritances. Capital gains. Income from investments, such as dividends and interest.
It’s important to note that the Singaporean government offers various tax incentives and deductions to encourage savings, investments, and donations. Residents can benefit from reliefs, such as the Earned Income Relief, Parent Relief, and Course Fees Relief, among others, to reduce their taxable income.
Please be aware that tax laws and rates can change over time, and it’s crucial to consult the latest information from the Inland Revenue Authority of Singapore (IRAS) or seek advice from a tax professional to ensure compliance with current tax regulations and to maximize available tax benefits.
Mandatory compensation & benefits in Singapore
Paid Leaves:
Annual Leave: In Singapore, employees are entitled to paid annual leave. The amount of annual leave an employee is eligible for can vary based on their length of service with the employer. As of my last knowledge update in September 2021, the entitlement typically starts at 7 days for the first year of service and increases progressively to a maximum of 14 days after completing 8 years of service. Many employers offer additional leave days beyond the statutory requirements to attract and retain talent.
Public Holidays: Singapore observes a list of public holidays, and employees are generally entitled to a paid day off on these holidays. If an employee is required to work on a public holiday, they may be entitled to extra pay or a day off in lieu.
Sick Leave: Employees are entitled to paid sick leave, which is provided under the Employment Act and applies to all employees. The exact amount of sick leave varies based on the employee’s length of service. Generally, employees can receive between 14 and 60 days of paid sick leave per year, depending on their service duration and the nature of the illness.
Maternity and Paternity Leave: Female employees in Singapore are entitled to maternity leave, while male employees can take paternity leave. As of my last update, the statutory maternity leave entitlement is 16 weeks, and paternity leave is up to two weeks. Employers often offer additional maternity and paternity leave benefits.
Insurance and social security (CPF Contributions)
Central Provident Fund (CPF): The Central Provident Fund is a mandatory social security savings scheme in Singapore. Both employees and employers are required to make CPF contributions, which are intended to fund retirement, healthcare, and housing needs. The contribution rates vary based on the employee’s age and wage level, with higher rates for older employees. These contributions are essential for long-term financial security, as they accumulate in individual accounts and can be used for various purposes, including housing purchases, medical expenses, and retirement.
Work Injury Compensation Insurance: Employers are obligated to provide work injury compensation insurance for their employees. This insurance covers employees in the event of work-related injuries or illnesses and provides compensation based on the severity of the injury or disability.
Medical Insurance: While not mandated by law, many employers offer medical insurance coverage as part of their employee benefits package. This typically includes coverage for outpatient medical expenses and hospitalization, ensuring that employees have access to quality healthcare.
Labor law in Singapore
Overtime
In Singapore, labor laws regarding overtime are generally governed by the Employment Act. The Act stipulates that overtime payment is mandatory for employees covered under its provisions, particularly non-managerial, non-executive employees. Employees who are not in managerial or executive positions are entitled to overtime pay for work beyond their regular hours. The rate for overtime pay is typically at 1.5 times the employee’s basic hourly rate. Employers must ensure that proper records are kept to accurately track and calculate overtime hours and payments.
Probation
Probation periods are common in employment contracts in Singapore. Employers often use probation to assess an employee’s performance, suitability for the role, and overall fit with the organization. The Employment Act does not specify a maximum probationary period, but it’s usually around three to six months. During this period, both the employer and employee have the flexibility to terminate the employment with a shorter notice period and without the need for a more extended notice. The terms and conditions of probation are typically outlined in the employment contract.
Work on Holidays
Singapore observes a list of public holidays, and employees are generally entitled to a paid day off on these holidays. However, if employees are required to work on a public holiday, they may be entitled to extra pay or a day off in lieu, as specified in the Employment Act and collective agreements.
Termination
Termination of employment in Singapore is subject to labor laws and the terms outlined in the employment contract. Employees who are covered under the Employment Act are generally entitled to notice periods for termination. The duration of the notice period depends on the employee’s length of service and the terms in the employment contract. For example, if the employment is terminated without cause, the notice period may range from one day to four weeks, depending on the length of service.
Employment Act
The Employment Act in Singapore is a fundamental piece of labor legislation that sets out the basic terms and conditions of employment for most employees in the country. While the Act primarily governs non-managerial, non-executive employees, it offers legal protections to ensure fair and just employment practices. The Act covers various aspects, including working hours, rest days, leave entitlements, public holiday pay, and termination of employment.
Temporary, Contract, Part-time, and Full-time Employment:
Singapore’s labor laws apply to various forms of employment. Temporary and contract employees are protected by the same basic labor laws as full-time employees, with variations depending on the terms of their contracts. Part-time employees have their employment terms, such as working hours and leave entitlements, prorated based on the number of hours worked compared to full-time employees. Employers must ensure that they adhere to labor laws when engaging employees on different types of employment contracts to avoid legal issues.
Hiring Foreign remote employees in Singapore
To bring foreign remote talent to Singapore, companies typically apply for Employment Passes (EPs) for their foreign employees. The EP is the primary work pass for professionals, managers, executives, and specialists.
Eligibility criteria include a job offer from a Singaporean employer and a competitive monthly salary. Employers or authorized agencies handle the application process, which usually takes around three weeks.
Singapore also offers other work passes, such as the S Pass and Dependant Pass. Remote work arrangements are permissible under EPs, allowing employees to work from anywhere, but compliance with Singapore’s employment and tax laws is crucial.
Maintaining compliance with work pass regulations, including adhering to terms and conditions, and ensuring employees don’t engage in unauthorized employment, is essential. Many employers seek professional assistance to navigate Singapore’s immigration and employment laws effectively.