Singapore is the third most globalized economy of the world. The World Bank has ranked the country as the most business-friendly destination for 10 consecutive years. On top of it, the 2015 United Nations Conference on Trade and Development (UNCTAD) report listed Singapore as the country with fifth most inflow of foreign direct investments (FDIs).
The current GDP of Singapore is $303 billion, and the annual growth rate is 1.8%. The unemployment rate is 2.2%. The country is part of the 21 free trade agreements (FTAs) that have been put in place for regional and bilateral agreements. Setting up a business in Singapore is a three-step process and takes typically 2.5 days. The country offers incentives, tax exemptions, and low tax rates for newly setup companies.
It is not mandatory to have a written employment contract in Singapore. However, employers must provide employees hired on or after April 1, 2016 with a written document containing key employment terms within 14 days of joining. The document must include the following information:
- Employer's full name
- Employee's full name
- Employment commencement date
- Job title of the employee
- Job responsibilities of the employee
- The duration of the employment term, particularly if it is a fixed-term agreement
- The work schedule of the employee
- The probationary period, if any
- The base salary of the employee
- The payday
- Fixed allowances
- Bonuses, if any
- Benefits such as medical and dental insurance, and
- Holidays and annual leaves.
The standard work schedule in Singapore comprises 9 hours per day for a 5-day workweek. The standard workweek consists of 44 hours. Employees are not required to work more than 6 consecutive hours without a break. Employees are entitled to a day off every week without pay, which is either Sunday or any other day.
Employers must provide break times of at least 45 minutes every day after 6 to 8 consecutive hours of work along with a day off every week.
Employees working more than 8 hours per day or 44 hours per week must receive overtime at a rate of time-and-one-half. Employees must not work more than 72 hours as overtime in a month.
The Employment Act in Singapore lists the following 11 paid holidays:
- Jan. 1: New Year's Day
- The Chinese New Year: For 2 days
- Hari Raya Puasa
- Hari Raya Haji
- Good Friday
- May 1: Labor Day
- Vesak Day
- Aug. 9: National Day
- Dec. 25: Christmas
When holidays fall on a Sunday, the next day is observed as a holiday.
Employees, who earn less than SGD 2,000 per month get statutory annual leaves as stated in the Employment Act. To qualify for annual leave, employees must work for a minimum of 3 months. The number of annual leave that employees receive will depend on the contractual agreement between the employer and the employee.
For employees earning less than SGD 2,000 per month, the clauses related to statutory sick leave are different. For example, employees who have worked for a minimum of 6 months, are eligible to get 14 days of annual sick leave, and 60 days of hospitalization leave (including 14 days). Similarly, there are different clauses for the minimum employment period of 5 months, 4 months, and 3 months.
Female employees who work for more than 3 months may be eligible for paid maternity leave benefits. Eligible women employees are entitled to get total 16 weeks’ of leave. The law prevents employers from dismissing any female employee during maternity leave. Women employees are entitled to get full payment during maternity leave.
Employers need to enroll employees in retirement and savings plans covered under the Central Provident Fund (CPF). Citizens and foreign workers can also contribute to a Supplementary Retirement Scheme (SRS).
Providing health insurance to employees is not a statutory requirement in Singapore. However, working professionals who are local citizens or permanent residents are automatically eligible for a low-cost medical insurance called “Medishield” that offers basic insurance protection.
Accident and Hospitalization Benefits
Many organizations in Singapore offer medical insurance plans that provide extended benefits to dependents. These benefits typically cover personal accident and hospitalization.
Many organizations provide their employees a per-day allowance, transportation allowance or reimbursement of expenses for travel-related jobs. The per diem amount depends on the places employees are traveling for business purpose.
Most organizations in Singapore provide a relocation allowance to employees who need to move with their family from their country of origin to Singapore. An expatriate compensation package typically includes paid airfare, paid shipping of personal effects, free or subsidized accommodation, payment of utility bills, paid childcare, and school fees for children.
Employee Stock Option Plan (ESOP)
Many organizations provide employee stock purchase plans, especially to senior employees. There may be specific eligibility criteria for employees to receive stock option benefits.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Singapore and hire their employees without having to establish a branch office or subsidiary in Singapore.
- Your candidate is hired via our Singapore PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
- Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Singapore laws.
- Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
- With no contractor risks, pass on the compliance burden to Global PEO Services.
Spin Off/M&A Support
- Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.
24/7 Support in 100+ Countries
- Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
- We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.
Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.
Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.