Expanding Your Business: Payroll in Singapore

Payroll in Singapore

Singapore is a unique independent city-state with low tax rates, high incomes, and very low unemployment. Singapore has very few barriers to entry, and attracts companies from all over the world looking to expand. As with any expansion, there are several challenges to managing payroll and operations in Singapore. Trading across borders and costs associated with exports, as well as registering property, setting up mandatory employee funds and procuring worker’s compensation insurance can be challenging.

Singapore Labor Laws

Singapore has made it more difficult for employers to hire foreign workers in order to encourage hiring more Singaporean citizens. Companies offering a monthly salary below 20,000 SGD and employing 10 or more full-time employees must post the position on the National Jobs Bank for a 14 day minimum, giving citizens a chance to apply for the position.

Payroll and Tax Considerations in Singapore

What is the Minimum Wage in Singapore?

There is no set minimum wage for workers. The law states employers should pay their employees based on their skills and capabilities.

Overtime Policies

Employers must pay 1.5 times the hourly rate for overtime work, and payment must be provided within 14 days after the last day of the salary period.

Severance Policies

Employers are not required to pay severance, but must give eligible employees notice or payment in lieu of notice and pay all unused annual leave on the last day of work.

Payroll Tax

Resident tax rates range from 2-24%, while non-residents pay flat tax rates which vary based on type of income.

Singapore’s Central Provident Fund (CPF) is a mandatory social security savings scheme where both employee and employer contribute. By contributing to the CPF employees can meet their retirement, housing, and healthcare needs. The funding goes into three accounts.

Singapore Leave Requirements

Employees are entitled to paid leave if they have worked for at least three months.

The length of annual leave depends on employee years of service, ranging from 7 days in the first year to 14 days in the 8th year.

Sick Time

Employers are entitled to sick leave if they have worked at least three months for a specific employer and the sick leave has been certified by the company’s doctor.

The amount of sick leave depends on the employee length of service.

Maternity and Paternity Leave

Every employee is entitled to take maternity leave four weeks prior to the birth of the child and 8 weeks after. The 12-week minimum must be paid by the employer.

A working father is entitled to two weeks of paternity leave for all births if the child is a Singaporean citizen, the employee is or has been married to the child’s mother, and the employee has worked for at least three continuous months.

Holidays in Singapore

When planning to hire in Singapore, it's crucial to be aware of the official holidays when employees may not be available for work.

• January 1 – New Year’s Day
• February 1 – Chinese Lunar New Year’s Day
• February 2 – Second Day of Chinese Lunar New Year
• March 29 – Good Friday
• May 1 – Labour Day
• May 3 – Hari Raya Puasa
• May 3 – Day off for Labour Day
• May 15 – Vesak Day
• May 16 – Day off for Vesak Day
• July 9 – Hari Raya Haji
• August 9 – National Day
• October 24 – Diwali/Deepavali
• December 25 – Christmas Day
• December 26 – Day off for Christmas Day

Easily Hire and Pay Employees in Singapore

Is Singapore in your hiring or expansion plans? Paylocity can help. Our cloud-based platform helps you navigate the waters of international payroll.

And don’t sweat complicated compliance — our hybrid service model includes a U.S.-based team and in-country experts in Singapore to help when you have questions.

Want to learn more? Request a demo today!