Payroll & Employment Guide: Singapore

Hiring in Singapore

When hiring employees in Singapore, employers must determine coverage under the Employment Act, issue written Key Employment Terms, and set up statutory contributions correctly.

Key steps when hiring in Singapore include:

• Determining whether the employee is covered under the Employment Act (and Part IV) or is a manager/executive — this affects overtime, rest days, and minimum protections.
• Issuing written Key Employment Terms (KET) within 14 days of employment start, including job scope, pay, hours, leave, and termination terms.
• Registering as an employer with the CPF Board and setting up payroll properly for Singapore Citizens and Permanent Residents.
• For foreign hires, ensuring compliance with work passes such as Employment Pass, S-Pass, or other work permits.

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Employee Benefits

Singapore requires specific statutory benefits under the Employment Act and social schemes like CPF. Many employers also provide additional benefits to compete for talent.

Mandatory / Statutory Benefits:

• Annual Leave: Starts at 7 days in the first year and increases by 1 day per year of service, up to 14 days.
• Sick Leave: 14 days of outpatient sick leave and 60 days of hospitalisation leave per year (hospitalisation days include the 14 outpatient days), subject to service length and certification.
• Public Holidays: 11 paid public holidays per year.
• Maternity Leave: Up to 16 weeks for Singapore citizen children, and 12 weeks for non-citizen children (meeting eligibility conditions).
• Paternity Leave: 2 weeks of government-paid paternity leave for eligible fathers of citizen children, plus shared parental and childcare leave provisions.
• Childcare Leave: Up to 6 days per year for citizen children (subject to age and service requirements), 2 days for non-citizen children.

Social Insurance / Retirement Savings:

• Central Provident Fund (CPF): Compulsory for Singapore citizens and permanent residents. For employees ≤ 55 years old, typical contribution rates are 17% by employer and 20% by employee (subject to wage ceilings and prevailing tables).
• Skills Development Levy (SDL): Employer pays 0.25% of monthly remuneration (capped) to fund training and upskilling programmes.
• Work Injury Compensation Insurance (WIC): Employers must insure eligible employees against work-related injuries and diseases.

Common Employer-Provided Benefits:

• Medical insurance and outpatient benefits.
• Performance bonuses and variable incentive plans.
• Flexible benefits, wellness programmes, and hybrid-work support.

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Taxes in Singapore

Singapore operates a low-rate personal income tax system, but unlike many countries, employers generally do not withhold monthly income tax from salaries. Instead, tax is assessed and collected directly from individuals by IRAS.

Income Tax:
Employees file annual tax returns and pay tax directly to IRAS based on progressive tax bands. Employers issue annual income statements (e.g., IR8A) to support employee tax filing and may participate in auto-inclusion schemes.

Employer Statutory Cost:

• CPF contributions for Singapore citizens and PRs (employer share, commonly 17% for those under 55, subject to changes and wage ceilings).
• Skills Development Levy (SDL) at 0.25% of monthly wages (subject to minimums and caps).
• Work Injury Compensation Insurance premiums and any other mandated coverage.

For foreign employees on Employment Pass or S-Pass, CPF is generally not applicable, but tax residency and income tax rules still apply at the individual level.

Payroll in Singapore

Singapore payroll focuses on timely salary payment, statutory contributions for local employees, and correct overtime calculations for eligible staff.

Payroll Currency & Cycle:
Salaries are typically paid monthly in SGD. Employers must pay wages at least once per month and generally within 7 days after the end of the salary period (and within 14 days for overtime pay).

Payslips:
Employers must issue itemised payslips that show:

• Basic salary and allowances.
• Any overtime, bonuses, or incentives.
• CPF, SDL, and other statutory contributions or deductions (for locals).
• Other deductions (where applicable and lawful).
• Net salary and pay date.

Overtime & Limits:
For eligible non-managerial/non-executive employees under Part IV of the Employment Act, overtime must be paid at 1.5× the hourly basic rate, with a statutory overtime cap of 72 hours per month.

Looking to set up compliant payroll, CPF/SDL, and overtime rules in Singapore?

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Legal Regulations

Singapore’s labour framework is built around the Employment Act, related regulations, and guidelines from the Ministry of Manpower (MOM) and CPF Board.

Key legal obligations:

• Comply with working-hour, overtime, and rest-day rules for covered employees.
• Provide statutory leave entitlements and observe public-holiday obligations.
• Pay CPF and SDL on time for Singapore citizens and PRs; maintain payroll and contribution records.
• Issue itemised payslips and KETs; keep proper employment documents and contracts.

Failure to comply can result in penalties, back-pay obligations, and restrictions imposed by MOM or CPF Board.

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Work Permits & Visas for Singapore

Foreign professionals working in Singapore typically require valid work passes. Employers are responsible for sponsoring and managing these passes.

Common work passes:

• Employment Pass (EP) — for professionals, managers, and executives meeting minimum salary and qualification criteria.
• S Pass — for mid-skilled staff who meet specified salary and qualification requirements.
• Work Permits — for semi-skilled or specific sectors (e.g., construction, marine, manufacturing, domestic workers).

From 2025 onwards, the minimum qualifying salary for new Employment Pass applicants has been raised to around SGD 5,600 per month, increasing hiring costs for foreign professionals.

Employers must ensure pass-holders comply with conditions (job scope, salary, role) and manage renewals or cancellations through MOM systems.

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EOR & PEO Services in Singapore

Employer of Record (EOR) and Professional Employer Organisation (PEO) services can help you hire and operate in Singapore without building a full in-house HR and payroll function.

Employer of Record (EOR) in Singapore:
An EOR can:

• Issue legally compliant employment contracts under Singapore labour law.
• Run monthly payroll, including CPF and SDL contributions and payslip issuance.
• Administer statutory benefits and leave in line with the Employment Act.
• Handle work-pass sponsorship and ongoing compliance for foreign employees.

PEO Services in Singapore:
For companies that already have a Singapore entity, PEOs provide:

• HR and payroll outsourcing.
• Contract and policy management aligned with local law.
• Leave administration and social-contribution handling.

EOR in Singapore

Payroll Calculator

Use Dhi ADT’s payroll calculator for Singapore to estimate gross-to-net pay for citizens and PRs (after CPF), employer contribution costs (CPF, SDL, work injury insurance), and overall payroll burden per hire.

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