Singapore Foreign Worker Quota: A Comprehensive Guide & Analysis
September 10, 2023
Hire in Singapore
Singapore PEO &
Employer of Record
Hire & manage teams remotely in Singapore without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
English
Salary Currency
Singaporean Dollar (SGD)
Payroll tax
17.00% - 17.25%
Payroll Cycle
Monthly
Time zone
UTC +8
Capital city
Singapore
Hire Employees in Singapore
NNRoad provides employer of record (EOR) & professional employment organization (PEO) services to ensure that your business in Singapore complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.
The NNRoad Advantage ☺
Pay as you go
No set-up or overhead costs to global expansion.
Global account manager
One point of contact for all of our 50+ serviced countries and regions.
Compliance
Ensured compliant contracts and operations.
Fast Onboarding
Start working with your remote employees/contractors within a week.
Foreigner Visas
NNRoad assists with overseas foreign hires visa needs.
Platform
Access your payroll reports and employee pay stubs on our portal.
Employer of Record in Singapore
Employer of Record (EOR) services are for companies who do not have a legal entity in Singapore, but who want to hire localy. Employment and full liability are outsourced to NNRoad.
01.
Candidate Selection
You interviews & select the candidates you want to hire in Singapore.
02.
Employee Onboarding
We sign a local labor contract with your employees based in Singapore.
03.
Compliance & Payroll
We manage monthly payroll, mandatory benefits & all HR compliance in Singapore.
04.
Payroll Reporting
See all payroll reports on our platform & focus on your business in Singapore.
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Singapore
Professional Employment Organization (PEO) services are for companies who have a legal entity in Singapore, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
01.
Compliance & Payroll
We manage monthly payroll, mandatory benefits & all HR compliance in Singapore.
02.
Payroll Reporting
See all payroll reports on our platform & focus on your business in Singapore.
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Singapore
Employee Income Taxes:
Individual income tax rates in Singapore are based on progressive tax brackets.
There are a number of deductions and exemptions that can reduce your taxable income. These include deductions for contributions to approved charities, as well as exemptions for certain types of income such as investment income and foreign-sourced income. Employers will deduct income tax from employee salaries at the prevailing rates.
Tax Brackets
0%: 0 to 20,000 SGD
2%: 20,000-30,000 SGD
3.5%: 30,000-40,000 SGD
7%: 40,000-80,000 SGD
11.5%: 80,000-120,000 SGD
15%: 120,000-160,000 SGD
18%: 160,000-200,000 SGD
19%: 200,000-240,000 SGD
19.5%: 240,000-280,000 SGD
20%: 280,000-320,000 SGD
22%: above 320,000 SGD
2%: 20,000-30,000 SGD
3.5%: 30,000-40,000 SGD
7%: 40,000-80,000 SGD
11.5%: 80,000-120,000 SGD
15%: 120,000-160,000 SGD
18%: 160,000-200,000 SGD
19%: 200,000-240,000 SGD
19.5%: 240,000-280,000 SGD
20%: 280,000-320,000 SGD
22%: above 320,000 SGD
Sample Calculation
Yearly income = 100,000 SGD
11.5% * 20,000 = 2,300
7% * 40,000 = 2,800
3.5% * 10,000 = 350
2% * 10,000 = 200
0% * 20,000 = 0
2,300+2,800+350+200 = 5,650
Yearly income tax = 5,650 SGD
11.5% * 20,000 = 2,300
7% * 40,000 = 2,800
3.5% * 10,000 = 350
2% * 10,000 = 200
0% * 20,000 = 0
2,300+2,800+350+200 = 5,650
Yearly income tax = 5,650 SGD
Employer Costs in Singapore
In Singapore, the government requires employers to make contributions to their employees’ pension funds. The amount of the contribution is a percentage of the employee’s salary, and is typically matched by the employer.
The government has set a minimum contribution rate of 3% for both employers and employees, but many companies choose to contribute more than this. For example, some companies may offer an additional 1% or 2% matching contribution from the employer.
The pension fund is used to provide income for retirees. Employees can start withdrawing from their pension fund when they reach the age of 55.
There are a few different types of pension schemes in Singapore. The most common type is the Central Provident Fund (CPF), which is managed by the government. Other types of pension schemes include private sector schemes and those set up by specific industries.
The amount of money that an employee can receive from their pension fund depends on a number of factors, such as how long they have been contributing, their age, and the type of scheme.
Employer contributions to pension funds are tax-deductible, and employees do not pay taxes on the contributions or on the interest that accrues on the fund.
Employer Contribution
7.5% to 17% – Central Provident Fund (CPF)
Up to 0.25% – Skills Development Levy (SDL)
Employee Contribution
5% to 20% – Central Provident Fund
Benefits & Insurance in Singapore
The Central Provident Fund (CPF) is a comprehensive social security savings program that has created a sense of security and confidence for many working Singaporeans throughout their retirement years.
If the employee earns more than $50 per month, the employer is expected to pay both the employer’s and employee’s share of CPF payments every month. Foreigners are not eligible for the CPF.
Another mandatory benefit is the Skills Development Levy. The SDL is a compulsory levy that you have to pay for all your employees, including foreign employees, working in Singapore. It is used to support workforce upgrading.
Working Hours in Singapore
Working Hours Per Week
The typical work week consists of 44 hours.
An employee shall not be required under his contract of service to work:
Overtime
Overtime work is any work performed outside of usual working hours (excluding breaks).
Non-workers who earn up to $2,600 per month or workers who earn up to $4,500 a month can claim overtime compensation. The employer must pay employees at least 1.5 times the hourly basic rate for overtime labor. Payment must be received within 14 days of the salary period’s end.
Termination Laws in Singapore
An employment contract can be canceled by either the employer or the employee by giving notice or paying a salary in place of notice, or by terminating it without giving notice or paying a salary in lieu of notice. Employment contracts come to a natural end in some instances, and notice periods are not required.
Severance
Retrenchment benefits are available to employees who have worked for the organization for at least two years. Those who have served for less than two years may be eligible for an ex-gratia payment as a gesture of goodwill. The MOM (Ministry of Manpower) recommends that employees be provided a retrenchment benefit of 2 weeks to 1 month’s income per year of service, depending on the industry standard and the company’s financial situation.
Notice Period
It’s standard practice to give two weeks’ notice during the probationary term and one month’s notice after that.
Employment Contract in Singapore
Employment Contract
It is recommended to have a written employment contract in Singapore. Best practices include spelling out an employee’s compensation, benefits, and termination requirements.
Always include the employee’s salary and compensation amounts in Singapore currency. An employee can be employed in the following terms: Full-time, Part-time, Temporary and Contract.
Probation Period
The Employment Act of Singapore does not require a probation period for an employee. However, it is common that employees are asked to serve a probation period ranging from 3 to 6 months.
Types of Leaves in Singapore
Annual Leave
The length of annual leave will be determined by a number of factors, including the employee’s length of service with the company and the employee’s professional category. However, it is standard practice to take 14-20 days of annual leave each year.
Sick Leave
Employees are entitled to paid sick leave. It lasts 5-14 days if no hospitalization is required and 15-60 days if hospitalization is required, depending on the employee’s length of service and occupational category. A medical certificate from the business doctor (if one is assigned), a government doctor, or a doctor from an accredited hospital must be shown by the employee.
Maternity Leave
If you are a woman working, you are entitled to paid maternity leave if you meet the following criteria:
Female employees are entitled to 12 weeks of maternity leave if they meet the following requirements:
Paternity Leave
Fathers are entitled to two weeks of paid paternity leave if the following conditions are met:
Biological father:
Adoptive fathers may be eligible for paternity benefits provided they meet certain criteria.
Childcare Leave
If the youngest child is under the age of seven, is a citizen, and the parent has worked for the company for at least three months, they are eligible to six days of paid childcare leave every year. The employer will cover the first three days. The government will cover the remaining three days.
Adoption Leave
Adoptive moms who are eligible, even self-employed mothers, are entitled to 12 weeks of paid adoption leave to bond with and care for their adopted children.
Public Holidays in Singapore
There are a number of public holidays that are celebrated throughout the year. These holidays provide citizens with days off from work. Some of the most popular holidays in Singapore include Chinese New Year, National Day, and Deepavali.
During Chinese New Year, homes are decorated with lights and lanterns, and families gather together to enjoy feasts and traditional performances. On National Day, people come together to celebrate the country’s independence with parades, fireworks, and other festivities. Deepavali is a festival of lights that is observed by Hindus around the world; in Singapore, Hindus decorate their homes with oil lamps and partake in special prayers and celebrations.
Public Holidays
Resources
Comprehensive Guide to Singapore CPF Contributions 2023
July 31, 2023
A Complete Guide for Payroll in Singapore
June 19, 2023
Individual Income Tax In Singapore: The Essentials
June 12, 2023
Work Culture in Singapore: Best Practices For Businesses
June 12, 2023
Work Benefits In Singapore: A Comprehensive Overview
March 31, 2023
Payroll outsourcing services in Singapore in 2023
November 24, 2022
Guide to Hiring Employees in Singapore 2022
June 24, 2022