Singapore PEO Employment Services

Velocity Global’s Singapore PEO (Professional Employer Organization) solution expedites and simplifies your company’s expansion into Singapore—bypassing the need for entity setup. We provide accelerated international employee onboarding to offer a streamlined global expansion process up to 90% faster than traditional entity establishment.

Through International PEO, Velocity Global becomes your Employer of Record. We rely on our international network to compliantly hire and onboard your global team members on your behalf while you retain complete employee oversight. Our experts take care of all payroll, compliance, and risk mitigation to provide a streamlined and elevated Singapore expansion experience.

Table of Contents

Singapore Fast Facts

Currency: Singapore Dollar (SGD)
Capital: Singapore
Population: 5.84 million
Economy: $324 billion
Top Sectors: Manufacturing, wholesale and retail trade, business services, finance and insurance, and other services
National Holidays:

  • New Year’s Day
  • Chinese New Year
  • Good Friday
  • Labour Day
  • Vesak Day
  • Hari Raya Puasa
  • Hari Raya Haji
  • National Day
  • Deepavali
  • Christmas Day

Hiring Considerations in Singapore

Expanding into any foreign market requires research and due diligence to understand the country’s unique traits. Singapore is no different. With one of the world’s top economies, business-friendly regulations, and a culturally and ethnically diverse population, Singapore offers tech firms an expansive market for growth.

Benefits of hiring in Singapore:

  • Singapore is the top market for growing tech companies, according to the 2020 State of Global Expansion Report™: Technology Industry. It is one of the world’s easiest markets in which to do business, offers a wide talent pool, and is among the most innovative markets in terms of tech talent.
  • Singapore’s geography makes it a strategic entry point for further expansion into the Asia-Pacific (APAC) region, especially for breaking into neighboring regions. Additionally, trade deals between Singapore and other Asian markets create a streamlined environment for exporting and importing goods.
  • Leading most other countries in internet user rates, Singapore offers a vast online market place when it comes to consumers per capita. Tech companies also benefit from Singapore’s high-ranking position in terms of secure servers, with one of the safest connectivity systems in the world.
  • Singapore has a region-leading English-speaking population, with proficiency levels surpassing China, Japan, and other Asian markets. English is the primary business language in Singapore.

Challenges when expanding into Singapore:

  • Although Singapore is among the most business-friendly countries in the world, challenges remain. Paying taxes, for example, varies from other countries. The Inland Revenue Authority of Singapore (IRAS) administers some forms of taxes and requires companies register with a CorpPass or SingPass to access Singapore’s Central Provident Board portals to pay relevant taxes.
  • The Foreign Account Tax Compliance Act (FATCA) requires that American companies’ corporate bank accounts in Singapore undergo heightened scrutiny in regards to compliance with banking regulations. Business leaders must anticipate shareholder and beneficial owner information, among potential additional information.
  • Non-nationals must hold a valid work permit, which is a time-consuming process in some cases. Singapore’s Ministry of Manpower increased provisions to obtain a work permit, assessing all applications on a case-by-case basis, including professional experience, academic qualifications, and fit for the role and sector in question.

Cultural nuances and must-knows for doing business in Singapore:

  • Greet all members by their names and titles. This varies between Chinese, Malay, and Indians; some Singaporeans use the Anglicized version of their names.
  • Avoid business meetings on Fridays or during Ramadan when engaging with Malay associates who are Muslim, and do not serve alcohol or pork. Consider serving a beef alternative for Indian guests.
  • Receive and give business cards with both hands. Treat cards with respect; do not fold or write on business cards.
  • Dress professionally like in most business settings. “Western” business attire is common, though other Chinese, Indian, and Malay professional attire are also common.
  • Build trust and socialize. Much like other Asian markets, a relationship built on trust is important before finalizing any deals.
  • Be punctual for meetings. If running behind schedule, call attendees and let them know an anticipated arrival time.

Employment Contracts in Singapore

Minimum wages and salaries:
There is no minimum wage for either local or foreign employees in Singapore.

Probation periods:
There are no direct laws outlining probation periods in Singapore. However, probation periods are allowed and a common practice in the country. Most probation periods last between three and six months.

Bonuses:
There are no requirements stipulating bonuses. However, employers may provide a few types of bonuses if they choose.

  • Annual Wage Supplement (AWS): Also referred to as 13th-month payment, this is a single, annual payment in addition to an employee’s salary. The amount paid depends on the salary outlined in employment contracts or collective agreements. While not compulsory, Singapore’s Ministry of Manpower encourages employers to include 13th-month pay. Employers may negotiate with employees for lower AWS bonus if the company’s annual financial performance is exceptionally poor.
  • Variable Payment: This is an incentive bonus intended to increase productivity or acknowledge and reward an employee’s contributions and is not compulsory.
  • Bonus: This is a one-time payment rewarding employee contributions, and is most often paid at year’s end. These bonuses are not compulsory, unless explicitly mentioned in employment contracts or collective agreements.

Termination and Severance Considerations:

  • Without Notice: Employers and employees can terminate employment without notice under certain situations, such as break in employment contract terms, failure to pay salary, absence without cause, and other situations. However, the terminating party must pay the other compensation in lieu of notice, known as notice pay, and is equivalent to salary earned during the required notice period.
  • With Notice: Employers and employees must honor the notice period outlined in the employment contract. If one party terminates employment, they must serve the notice period, or pay compensation in lieu of notice. If a contract does not specify a notice period, the proper notice period depends on an employee’s time with the company:
    • Fewer than 26 weeks: one day’s notice
    • 26 weeks but less than two years: one week’s notice
    • Two years but less than five years: two weeks’ notice
    • Five years or longer: four weeks’ notice

Paid Time Off & Benefits

Maternity leave:
Expectant mothers may take between 12 and 16 weeks’ paid maternity leave in Singapore. The length of leave depends on a number of factors:

16 weeks’ leave criteria:

  • The child is a Singapore citizen
  • The mother worked for her employer for a minimum, continuous three-month period prior to the child’s birth
  • The mother notifies her employer at least one week before taking maternity leave. If the mother fails to notify her company, she is only entitled to half of her payment during leave. However, if the mother gives her employer an excuse deemed acceptable, she receives full payment
  • For a mother’s first and second children, her employer pays eight weeks’ salary, and Singapore’s government reimburses her employer for the second eight weeks’ pay
  • Singapore’s government pays all 16 weeks for a mother’s third and subsequent children

12 weeks’ leave criteria:

  • The child is not a Singapore citizen.
  • Singapore’s Employment Act (the main labor law that provides basic terms and working conditions for all employees) applies to the mother.
  • The mother worked for her employer for a minimum, continuous three-month period prior to the child’s birth.
  • The mother’s employer pays the standard monthly salary for the first eight weeks of leave if she has fewer than two living children at the time of delivery, and gave at least one week’s notice.
  • The final four weeks is unpaid unless otherwise outlined in the employment contract.

Paternity leave:
Paternity leave in Singapore grants fathers two weeks’ Government-Paid Paternity Leave (GPPL) if they meet the following:

  • The child is a Singapore citizen.
  • The father was or is married to the child’s mother in the time between conception and birth.
  • The father worked for his employer for a minimum, continuous three-month period prior to the child’s birth.

Vacation and annual leave:

  • Employees may only apply for annual leave after they’ve reached three months of employment.
  • The amount of paid leave depends on an employees’ time with their employer; after one year, employees earn seven days’ paid leave. Each year adds an additional day of paid leave.

Sick leave:

  • Employment Act-covered employees and those working under their employer for a minimum of three months receive both outpatient leave and paid hospitalization leave. Workers must inform their employer within 48 hours of their absence to remain eligible.

Paid outpatient leave:

  • Workers must be certified unfit to work by a medical practitioner registered under Singapore’s Medical Registration Act or Dental Registration Act.

Paid hospitalization leave:

  • Workers admitted or undergoing procedures requiring day surgery or bed rest are eligible; hospitalization leave does not qualify as part of extended paid outpatient leave.
  • Special circumstances, like those under Quarantine Orders, apply.
  • Workers’ procedures must take place in once of Singapore’s approved hospitals, national specialty centers, or ambulatory surgical centers.
  • Qualified workers receive up to 14 days’ paid outpatient leave, and up to 60 days’ hospitalization leave; the employee’s time with their employer determines the number of paid days they receive. If an employee takes the full 14 days’ paid outpatient leave but requires hospitalization leave after, the 14 days applies to the 60-day limit of paid hospitalization leave.
  • Workers without three months’ time with their employer are not eligible for either type of leave.
  • Employees with three to six months’ service with their employer receive prorated paid leave.
  • Special sick leave situations also apply.

Payroll

Taxes

Event Due Date
e-Donation January 31, 2020
e-Submission of Employment Income March 1, 2020
e-Submission of Commission March 1, 2020
e-Submission of Certificate of Residence for Withholding Tax March 31, 2020
File Estimated Chargeable Income March 31, 2020
Apply CRS Registration March 31, 2020
File GST return (Jan. 1 – March 31) May 11, 2020
File Individual Income Tax May 31, 2020
Submit CRS return May 31, 2020
Submit FACTA return May 31, 2020
File Estimated Chargeable Income (Jan., Feb., and March year-end 2020) June 30, 2020
File GST return (April 1 – June 30) July 31, 2020
File Estimated Chargeable Income (June year-end) July 30, 2020
File GST return (July 1 – Sept. 30) October 31, 2020
File Corporate Income tax return (Form C-S/C) November 30, 2020
e-File Corporate Income Tax return (C-S/C) December 15, 2020
File Estimated Chargeable Income (Sept. year-end) December 31, 2020

Average workweek hours:

Part IV of Singapore’s Employment Act covers regulated work hours, rest days, and other considerations for employees; it does not apply to managers and executives.

An individual’s working hours are outlined in the employment contract. However, common working hours include:

  • Five work days or less per week: up to nine hours daily, or 44 hours weekly
  • More than five work days per week: up to eight hours daily, or 44 hours weekly
  • Employees cannot work more than 12 hours per day, except in the event of:
    • Accidents or threats of accidents
    • Work essential to community life, national defense, or security
    • Immediate work applied to machinery or plant
    • Interrupted work impossible to predict
  • Workers cannot work more than 12 days between rest days

Overtime considerations:

  • Overtime pay in Singapore applies only to non-workman (white-collar workers in non-managerial roles) earning up to SGD $2,600 and workman earning up to SGD $4,500, and capped at SGD $2,600 salary level and SGD $13.50 hourly rate.
  • Overtime hours cap at 72 hours per week; public holidays and rest days do not count towards the limit except in cases exceeding usual working hours on those days.

Taxes

Employer contributions include up to 17% for the Central Provident Fund (social security), 0.25% the Skills Development Levy, 3.20% for Workers’ Insurance, and a fixed amount for Singapore’s Cultural Fund, totaling 17.25% + fixed costs for local nationals.

Taxable Income Income Tax Rate (%) Gross Tax Payable ($)
First $20,000

Next $10,000

0

2%

$0

$200

First $30,000

Next $10,000

3.50%

$200

$350

First $40,000

Next $40,000

7%

$550

$2,800

First $80,000

Next $40,000

11.5%

$3,350

$4,600

First $120,000

Next $40,000

15%

$7,950

$6,000

First $160,000

Next $40,000

18%

$13,950

$7,200

First $200,000

Next $40,000

19%

$21,150

$7,600

First $240,000

Next $40,000

19.5%

$28,750

$7,800

First $280,000

Next $40,000

20%

$36,550

$8,000

First $320,000

Excess of $320,000

22%

$44,550

Choose Velocity Global

Taking your business operations overseas is a monumental endeavor but partnering with an experienced expansion organization creates a smoother process. Velocity Global’s International PEO solution provides a quick, compliant expansion into Singapore. As your Employer of Record, we manage all risk mitigation, payroll, and compliance, while you remain focused on what matters most: moving your business forward.

Whether you hire a single team member, capitalize on a short-term project, or establish your presence in Singapore with an entire team, International PEO provides the agile expansion solution needed to grow on your terms. At up to 60% more cost-effective than entity establishment, choosing International PEO means you are able to allocate more financial resources to other essential endeavors—at home or abroad.

Want to learn more about how Velocity Global’s International PEO solution changed the way companies expand overseas?