June 24, 2022
Singapore
Employer of Record & PEO in Singapore
Hire & manage teams remotely in Singapore without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Native Language
Malay, English
Employee Protection
Medium
Payroll Frequency
Monthly
Capital city
Singapore
Termination
Easy
Internet
Fast
Currency
Singapore Dollar (SGD)
Immigration
Hard
English Speaking
>90%
Population
5.453 Million
Employment Cost
High
Cost of Living
High
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Singapore. Registering a legal entity in Singapore as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Singapore in full accordance with local labor laws in under a week.
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 in Singapore. Employment and full liability are outsourced to NNRoad.
➊ You interviews & select the candidates you want to hire in Singapore.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes payroll in Singapore in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Singapore while NNRoad manages payroll & HR liabilities.
- Recruiting process outsourcing – including but not limited to:
- Establishing a sourcing plan
- Project initiation
- Professional candidate search
- Screening and candidate selection by evaluation and pre-interview
- Interview process
- Offer, negotiation, and reference check
- Hiring of and termination of employees/local labor contracts
- On-boarding and off-boarding employees following local law practice
- Contingent workforce management
- Complete payroll solution and statutory 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 according to local laws, including:
- Central Provident Fund (CPF) pension contribution
- SDL (Skills and development levy) contribution
- WICA insurance (workers compensation)
- Employee tax management: submission of IRA8 or IR21 form to IRAS
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.
➊ You interviews & select the candidates you want to hire in Singapore.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Singapore while NNRoad manages payroll & HR compliance.
- Registration of the necessary company and personnel information for payroll calculation in the payroll software and system:
- Raw data collection and cleaning
- Employee data maintenance including new hire, resign, salary change, retire, etc.
- Local government bureau registration (i.e. social security bureau registration)
- Set up payroll policy, maintenance and update
- Maintain employee record accordingly to the requirements by local government
- Monthly payroll processing:
- Calculation of gross salary, salary deductions (i.e. social security insurance), and net salary based on information provided by the company including irregular payments such as incentive/bonus, commission, allowance, severance, retirement payment, etc.
- Pro-rata calculation for people who join/resign
- Providing a monthly payroll summary to the Company
- Payroll disbursement – Issuing payment notice to the Company for payroll distribution to employees and employee’s expense claim
- Employee’s enrollment and un-enrollment to the mandatory benefit plans
- Calculation and contribution of mandatory benefit plans
- Self Help Group contribution calculation according to ethic group.
- Year-end adjustment and annual declaration:
- Adjustment of taxes owed or to be refunded to the employee based on the cumulative income of the employee for the entire year
- Prepare annual payroll related reconciliation report
- Annual social security report filing and year end settlement
Advantages of NNRoad's Employment Services
- With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Singapore.
- Pay as you go
- Dedicated account manager – One point of contact for multiple locations
- Employment & termination processing
- Complete payroll solution and statutory benefit according to local laws
- With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Singapore.
- NNRoad only works with professional locally licensed partners
- GDPR compliant
- NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
- NNRoad provides foreigner VISA application services, if needed
Employment Compliance in Singapore
Taxes & Payroll in Singapore
Employee Income Taxes:
The taxable income of a resident individual in Singapore (after deducting personal allowances) is taxed at progressive rates. Current rates are (based on the annual taxable income):
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
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
Employer Costs in Singapore
Employer Contributions:
7.5% to 17% – Central Provident Fund (CPF)
Up to 0.25% – Skills Development Levy (SDL)
Employee Contributions:
5% to 20% – Central Provident Fund
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:
- More than 6 consecutive hours without a period of leisure (of at least 45 minutes break)
- More than 8 hours in one day or more than 44 hours in one week.
- Unless specially exempted, employees cannot work more than 12 hours per day or 72 hours of overtime in one month.
Overtime Laws & Regulations
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.
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.
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.
Termination notice:
It’s standard practice to give two weeks’ notice during the probationary term and one month’s notice after that.
Severance pay:
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.
Public Holidays in Singapore
Public Holidays in Singapore
New Year’s Day – 1 January 2022
Chinese New Year – 1-2 February 2022
Good Friday – 15 April 2022
Labour Day – 1 May 2022
Hari Raya Puasa – 3 May 2022
Vesak Day – 15 May 2022
Hari Raya Haji – 10 July 2022
National Day – 9 August 2022
Deepavali – 24 October 2022
Christmas Day – 25 December 2022
Paid Leave in Singapore
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.
Employment Contract in Singapore
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
- Contract
Probation Period
The Employment Act of Singapore does not require a probation period for an employee. In Singapore, it is common that employees are asked to serve a probation period ranging from 3 to 6 months.
Types of Leaves in Singapore
Sick Leave
In Singapore, 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 in Singapore, you are entitled to paid maternity leave if you meet the following criteria:
- The child is a Singaporean
- Mother had been working for her employer for at least three months prior to her confinement.
A total of 16 weeks of paid maternity leave is available to eligible female employees.
Female employees are entitled to 12 weeks of maternity leave if they meet the following requirements:
- They are covered by the Employment Act.
- They have served the employer for a continuous period of at least 3 months immediately before the birth of the child.
Paternity Leave:
In Singapore, fathers are entitled to two weeks of paid paternity leave if the following conditions are met:
Biological father:
- The child is a Singapore citizen at the time of birth or will become one during the next 12 months.
- The child’s mother was legally married to the child’s natural father at the time of conception, or legally married to the child’s natural father after conception but before birth, or legally married to the child’s natural father within 12 months of birth.
- Before the birth of the child, the male employee had worked for the company for at least three months.
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 Singapore 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.
Immigration Laws in Singapore
Before beginning employment in Singapore, all foreigners must have a valid pass (often referred to as a work visa).
There are different types of passes for professionals:
- Employment pass – For international executives, managers, and professionals. Candidates must earn at least $4,500 per month and meet other requirements.
- EntrePass – For qualifying international entrepreneurs who want to develop and run a venture-backed or creative technology-based business in Singapore.
- Personalized Employment Pass – For high-earning current Employment Pass holders or international professionals working overseas. The PEP gives you more flexibility than an Employment Pass.
- S Pass – For mid-level skilled staff. Candidates must have a monthly income of at least $2,500 and meet the assessment criteria.
Resources
June 24, 2022
