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Singapore is one of the most developed and innovative countries in Southeast Asia. For these reasons, it is a preferred location for global companies to expand their operations. It has a large, educated, and multilingual workforce with a particular strength in technology. This is supported by world-class universities and a government that is digital-friendly. Singapore has a good location, stable politics, and business-friendly laws.
However, for global companies hiring employees in Singapore, some challenges arise. The most challenging aspect is the country’s strict labor laws, which must be understood and adhered to.
Businesses are required to comply with the Employment Act, to pay the mandatory Central Provident Fund (CPF) contributions for their employees, and to adhere to the taxation policies of the Inland Revenue Authority of Singapore (IRAS). The taxation policies can be complicated and time-consuming, particularly for businesses new to Singapore.
An Employer of Record (EOR) makes hiring employees in Singapore seamless for foreign companies without a local entity. The EOR handles payroll, taxes, benefits, and HR compliance. It allows companies to hire fast and legally, while also tapping into Singapore’s highly skilled talent pool.
In Singapore, an Employer of Record (EOR) is a business that legally employs and pays workers on behalf of another company. The EOR handles all legal employer responsibilities mandated by Singapore’s laws and regulations. This typically involves drafting employment contracts, processing payroll, ensuring timely Central Provident Fund (CPF) contributions and tax withholdings, and managing employee benefits. It acts as the legal employer on official documents while the client company continues to oversee the employee’s work, objectives, and performance. This arrangement is suitable for companies looking to hire employees in Singapore without establishing a local legal entity.
It’s important to understand what distinguishes an EOR from a Professional Employer Organization (PEO). The primary difference between these services is the presence or absence of the client company’s legal entity in Singapore. An EOR service is designed for companies without a registered entity in Singapore. In that case, the EOR company becomes the full legal employer for the employees. A PEO, on the contrary, works with companies that already have a legal entity in Singapore. This service doesn’t assume the full legal employer responsibilities; instead, it operates as a co-employer, partnering with the client to share HR and compliance responsibilities. Therefore, for a foreign company that’s making its first hire in Singapore, an EOR is the correct service.
An EOR in Singapore will take care of local compliance with Singapore’s labour and employment laws. They are primarily under the Employment Act and the Central Provident Fund Act. This includes preparing employment contracts, onboarding employees, and managing payroll operations, as well as making CPF and Skills Development Levy (SDL) contributions, tax withholdings, and processing employee benefits. An EOR will ensure your client company’s compliance is 100% secured, as well as relieve legal risk.
Labor Laws in Singapore are based on the national law. The leading labor regulation in Singapore is the Employment Act. Employment law does not vary from one state to another, as in federal law systems. The laws in Singapore apply to all areas of the country. The Ministry of Manpower is the government agency responsible for managing the application and enforcement of employment laws and standards.
Employers have been required to provide written Key Employment Terms (KETs) for all employees who fall under the Employment Act since 1 April 2016. This applies to employees first hired from this date onwards and is to be provided within 14 days from their first day of work.
KETs provide clarity to the basic terms of the employment relationship. It is to include details such as the full names of the employer and employee, job title and main duties, start date, salary, job working hours and rest days, leave entitlements, and the notice period for termination.
The Employment Act sets out provisions for working hours to prevent overworking of employees. Under the Act, an employee is subject to the standard contractual working hours of no more than 8 hours per day or 44 hours per week if they are an employee for whom the Act applies.Â
An employee working 5 days a week or less can be made to work up to 9 hours a day, subject to the 44-hour weekly cap. Working beyond the standard working hours is overtime.
Hourly overtime payment is to be at least 1.5 times the employee’s hourly basic rate of pay. An employee is not allowed to work more than 72 hours of overtime in a calendar month.
After 3 months of working for a company, an employee is entitled to paid annual leave. This leave is a minimum of 7 days for the first year and increases by 1 day for every year of work (maximum of 14 days after eight years of work). Many companies offer 14 days or more from the beginning to better attract and retain good employees.
A person who is employed for three or more months is entitled to paid sick leave. They are entitled to 14 days of outpatient sick leave per year and up to 60 days of hospital leave, which includes the 14 days of outpatient leave. For instance, if a person takes 10 days of outpatient leave, they have 50 days of hospital leave remaining for the year. Employees who have worked six months or less are eligible for a reduced, pro-rated amount of sick leave.
Employees are entitled to 11 paid public holidays annually. When a public holiday falls on an employee’s day of rest, the following work day will be a paid holiday. If an employee works on a public holiday, they must be granted an additional day’s pay or another day off.
Singapore is one of the countries that offer great parental leave benefits to working families. Working mothers who are Singapore citizens and have a child are entitled to 16 weeks of paid maternity leave, provided they have been an employee of their company for at least three months prior to the day of birth. For the first 8 weeks, the employer pays for this leave (although it will later be reimbursed), while the last 8 weeks are covered by the government (up to a capped amount).
Eligible working fathers are also entitled to 2 weeks of Government-Paid Paternity Leave (GPPL).
Termination of employment in Singapore is subject to the Employment Act and the contract of employment. The law sets out minimum notice periods if it is not provided in the contract-
An employer can summarily dismiss an employee for grave misconduct, deliberate breach of contract, or gross misconduct. However, the employer must have documentary evidence and conduct an inquiry to allow the employee to state his case.
Employees who feel they were unfairly dismissed may make a claim to the Tripartite Alliance for Dispute Management (TADM) of the Ministry of Manpower, within one month of their last day of employment.
In Singapore, employers have legal responsibilities to fulfil beyond providing employees with their paychecks. An employer must contribute to the Central Provident Fund (CPF) of every Singapore Citizen and Permanent Resident employee. The employer contribution rate, which can be as high as 17%, is based on the employee’s monthly wages and applies to employees aged 55 and below. There are lower employer contribution rates for older employees. CPF is not mandatory for foreign employees on work passes.
Employers must also contribute to the Skills Development Levy (SDL) for every employee. The levy rate is 0.25% of the employee’s monthly wages. The minimum Skills Development Levy payment is S$2, with a maximum of S$11.25 each month. In addition, all employers who hire foreign employees on Work Permits or S Passes are required to pay a Foreign Worker Levy (FWL). The levy payable depends on the sector, type of pass, and the quota of foreign workers the company is allowed to hire.
Lastly, every employer is required to submit a report of their employees’ income to the Inland Revenue Authority of Singapore (IRAS) annually. This can be done by 1 March via the Auto-Inclusion Scheme (AIS) using the IR8A form, so that the employees’ income and tax records can be submitted to the tax authorities.
One of the primary advantages of working with an EOR in Singapore is quick access to the market. Establishing a Singapore company requires time and effort, weeks of administrative tasks, hiring of local directors, and government registrations with ACRA, CPF Board, IRAS, and the Ministry of Manpower. By partnering with an EOR, companies can hire employees in a matter of days, rather than several months.
An EOR also makes sure that your business is fully compliant with Singapore’s employment laws, such as the Employment Act, CPF rules, tax obligations, and work pass requirements. Employment and immigration laws in Singapore are strict, and errors or non-compliance can result in large fines or even work pass cancellations. EORs are specialists in these laws and help your business remain fully compliant at all times.
An EOR also helps you avoid misclassification risks. In Singapore, there are legal issues, unpaid CPF, and tax penalties for classifying an employee as an independent contractor, or vice versa. An EOR ensures that all of your workers are properly classified and employed on the correct terms.
Aside from compliance and cost benefits, EORs have local HR and cultural insights. Singapore is a melting pot of cultures, and being aware of these differences can be the difference between failing and flourishing when managing a team in the country. EORs can provide HR professionals with local work culture insights and can assist companies in building good relationships with employees.
Finally, EORs provide flexibility. Companies can upsize or downsize teams at will without the financial and administrative burden of sustaining a local entity, making it much easier for businesses to test the market, handle short-term projects, or scale strategically.
Remote People is a popular top choice EOR services provider for its technology-driven platform and focus on employee experience. It offers a seamless and transparent service for global hiring.
| Key Features | Remote People provides a straightforward platform for onboarding, payroll, and benefits administration. Known for its comprehensive benefits packages, which can be customized to be competitive in the Singaporean market, and exceptional customer support, it also offers robust intellectual property protection and transparent flat-rate pricing. |
| Pros | Their platform is intuitive for both employers and employees, offering strong legal and HR support, including assurance of full compliance with Singapore’s Employment Act and CPF requirements, with a transparent pricing model with no hidden fees. |
| Cons | Limited public information is available about onboarding time or cost breakdown; it’s best to reach out and obtain a direct quote. |
Deel is another global EOR service provider, and their platform is also very fast. This tech-powered platform will help you with hiring, payroll, and HR, all in one, for a global workforce.
| Key Features | The Deel platform is highly automated and geared towards extremely fast turnaround for onboarding, sometimes in minutes. They offer a range of flexible contract options and can handle multi-currency payments. They have invested significantly in onboarding compliance checks into the system itself. |
| Pros | A large global network suited for firms recruiting in multiple countries; a seamless platform with a focus on user experience; quick setup time and onboarding; transparent pricing. |
| Cons | Variable service quality depending on the country; less personalised service than some boutique players; costs higher than some local Singapore-centric alternatives. |
Papaya Global is known for its emphasis on the total workforce management solution, considering itself an end-to-end global payroll and payments platform with EOR as one of its services.
| Key Features | Experience in managing data from multiple sources into a single view of global payroll. Provides robust compliance controls and has an in-country network of partners in Singapore for local expertise. |
| Pros | Highly advanced technical platform with deep analytic and reporting abilities; excellent for businesses with workforces in multiple countries; automation in workflows streamlines administrative processes; transparent and predictable pricing. |
| Cons | Might involve more extensive setup and configuration time; potential learning curve to fully leverage platform features; customer support might not be as personalized. |
HelloPebl is a solid option and a particularly attractive one for startups and tech companies that prioritise simplicity, speed, and transparent pricing.
| Key Features | HelloPebl provides a streamlined and modern platform that can handle fast onboarding (as quick as 24 hours), compliant payroll, and benefits administration. The service is centred around their flat-pricing model, with no hidden fees to give you complete transparency and predictability on costs when budgeting. |
| Pros | HelloPebl’s focus on simplicity and speed is a strong fit for fast-paced companies. Their pricing is transparent, all-inclusive, and highly competitive, which makes them very attractive for startups. They also provide dedicated support to ensure a smooth experience for their clients. |
| Cons | Being a newer provider compared to some larger, more established ones, their global coverage and range of supplementary HR services may not be as extensive. |
EOR fees vary by provider and service levels. Most global providers charge a flat monthly fee per employee, typically $300 to $700 per month. However, a few charge a percentage of the employee’s salary, typically 8-20%.
Employers also fund the employee’s legally required contributions in Singapore. Employers pay 17% of an employee’s ordinary wages (up to a monthly cap) and the Skills Development Levy (SDL), which is 0.25% of the gross monthly salary, for Singapore Citizens and Permanent Residents aged 55 or below.
These fees cover the employee’s salary, required social contributions, and the EOR’s payroll and compliance services. It provides businesses with a predictable cost for each hire in Singapore each month.
Registering a private limited company with the Accounting and Corporate Regulatory Authority (ACRA) allows full control and direct hiring capabilities. This entity type requires selecting a company name, appointing one local director, registering a local address, and submitting the incorporation documents. The approval process takes about 1-2 days.Â
However, fully setting up the company, including opening a bank account, can take 4-8 weeks. Government fees are approximately SGD 315, while professional company setup services range from SGD 500 to SGD 1,500. Annual running costs, including ACRA filings, secretarial, and accounting fees, start at SGD 3,000.Â
The company option is ideal for long-term operations with bigger teams. However, for smaller-scale projects or short-term work, it can be costly and time-consuming.
This is the easiest way to engage local talent for flexible hours. A contractor/freelancer is self-employed and signed under a service contract. There is no employment relationship, so CPF, SDL, and employment benefits don’t need to be paid.
There is a risk of misclassification under Singapore law. Ministry of Manpower and IRAS take a look at the substance of the relationship, and may rule that the worker is an employee if the company provides control over how, when, and where they do their work, or pays them a fixed salary. In this case, they would have to pay penalties and may be liable for CPF contributions for the period in arrears with accrued interest.
Staffing agencies, also known as recruitment agencies, provide temporary or contract workers to complete short-term projects or handle temporary work overload. The staffing agency is the official employer of the worker, and the worker comes into your company to do the work for you. Staffing is suitable if the employer needs a temporary solution to fill a gap or wants to trial a worker before making a permanent hire.
Staffing is not well-suited for longer-term or core team positions. The cost is also higher than most other options, with most agencies adding markups of 30-50% or more to salaries. Also, contract workers don’t usually feel a sense of belonging to your company because their employer is the staffing agency. For companies that are a longer-term investment in Singapore, an EOR or direct hire may be a more appropriate fit.
Singapore has a highly skilled labor force, robust infrastructure, and a pro-business environment. Employers must also follow Singapore’s labor laws, CPF contributions, and work pass regulations when hiring in Singapore.
An EOR can streamline the hiring process in Singapore by handling payroll, compliance, and HR functions, letting businesses concentrate on growth initiatives without establishing a local presence.
Remote People is an excellent choice when hiring in Singapore. In addition to offering competitive prices, this EOR is known for its local expertise, efficiency, and streamlined service. There are many other dependable EORs that also fit different businesses’ needs, including Deel, Velocity Global, Papaya Global, and Hello Pebl. Companies can select the best EOR for their specific needs by considering factors such as corporate objectives, budget, and expansion plans.
