Hire employees in Singapore
What a foreign company needs to know before employing people in Singapore: whether you need an entity, what an employee really costs once the Central Provident Fund is counted, how payroll and IRAS filings work, what leave is mandatory, and why work passes and tax clearance drive your timeline.
Quick answers
The questions leadership teams ask first. Detail follows further down the page.
Do I need a local Singapore entity to hire?
No. Foreign companies can hire in Singapore through three routes:
- Employer of Record. Dryft Global employs the person through our Singapore entity and handles the contract, the mandatory Key Employment Terms (KETs), Central Provident Fund (CPF) contributions, the Skills Development Levy, payslips and annual tax filing. You direct the work.
- Direct local entity. You incorporate a private company limited by shares (Pte. Ltd.) or register a foreign branch with the Accounting and Corporate Regulatory Authority (ACRA). That needs a resident director, a registered office, a corporate secretary and a local bank account.
- Independent contractor. A genuine Self-Employed Person (SEP) engaged on a business to business agreement. Lawful, but tightly policed. See the contractor section below.
When should I use an EOR instead of incorporating a Pte. Ltd.?
An EOR makes sense when you are:
- Onboarding in 3 to 5 business days rather than the 4 to 8 weeks incorporation plus a corporate bank account takes.
- Building a team of 1 to 15 without entity setup, corporate secretarial fees, statutory audit and a resident director.
- Testing Singapore as a regional hub before committing paid-up capital.
- Limiting permanent establishment exposure for roles that close no contracts locally.
A Pte. Ltd. becomes the right answer once headcount passes roughly 15 to 20, when you need a Monetary Authority of Singapore licence, when you want your own work pass quota, or when you bid on government contracts.
What does an employee actually cost beyond salary?
Less than almost anywhere else, and it depends on who you hire. For a citizen or permanent resident the statutory load is roughly 17% to 17.5%: employer CPF of up to 17.00% of ordinary wages, capped at the monthly Ordinary Wage ceiling of S$6,800 moving toward S$8,000, plus the Skills Development Levy at 0.25%. A foreign national on an Employment Pass attracts no CPF, so the statutory cost is under 0.1% plus private medical cover. S Pass and Work Permit holders pay a Foreign Worker Levy of S$330 to S$650 or more a month.
How difficult is termination in Singapore?
Far easier than Europe. Either party can end the contract on the agreed notice, or by paying salary in lieu, and you do not have to prove just cause or a redundancy business case. What you must respect is process: an employee alleging a discriminatory or retaliatory dismissal can file at the Tripartite Alliance for Dispute Management within 1 month, retrenchments trigger a notification duty to the Ministry of Manpower, and for any non-citizen you must file tax clearance and withhold final pay before they leave.
Can Dryft Global legally employ my team in Singapore?
Yes, through our own Singapore entity. We issue the KETs within 14 days, run monthly payroll inside the 7-day payment window, remit CPF, the Skills Development Levy and self-help group deductions by the 14th, file Form IR8A under the Auto-Inclusion Scheme, bind Work Injury Compensation cover and manage Form IR21 tax clearance on exit.
Hiring routes compared
Speed, resident director rules, work pass sponsorship and permanent establishment risk drive the decision. Here is how the three routes compare.
| Factor | Direct entity (Pte. Ltd.) | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Speed to onboard | 4 to 8 weeks (ACRA plus bank account) | 3 to 5 business days | 1 to 2 business days |
| Entity maintenance | High, plus corporate secretary and audit | None, no entity to maintain | Minimal |
| Local resident director | Mandatory (citizen, PR or EntrePass holder) | Handled by Dryft Global | Not applicable |
| CPF administration | Your own Submission Number and monthly filing | Fully managed, with SDL and self-help funds | Worker pays own Medisave |
| Work pass sponsorship | Your own MOM account, subject to quota ratios | Available under established quotas | Must already hold work rights |
| Permanent establishment risk | Direct corporate presence established | Substantially mitigated | Medium to high if the contractor depends on you |
| Best fit | Long-term operations above 15 staff | Fast entry, regional HQ roles, technical teams | Short-term, non-core, discrete projects |
What an employee costs in Singapore
Singapore funds retirement, healthcare and housing through the Central Provident Fund, which applies only to citizens and permanent residents. Employer rates fall with age and stop at the monthly Ordinary Wage ceiling, so the effective percentage drops sharply on senior salaries.
| Component | Employer share | Notes |
|---|---|---|
| CPF, aged 55 and below | 17.00% | Of ordinary wages, up to the monthly OW ceiling |
| CPF, above 55 to 60 | 15.00% | Employee share steps down too |
| CPF, above 60 to 65 | 11.50% | Rates taper with age |
| CPF, above 65 to 70 | 9.00% | Above 70, 7.50% |
| Skills Development Levy (SDL) | 0.25% | All staff. Minimum S$2, maximum S$11.25 a month |
| Work injury insurance (WICA) | ~0.30% to 1.00% | Mandatory for manual and lower-paid staff |
| Statutory subtotal, citizen or PR | ~17.0% to 17.5% | Up to the wage ceiling, before benefits |
| Statutory subtotal, Employment Pass holder | Under 0.1% | SDL only, no CPF |
| Foreign Worker Levy (S Pass, Work Permit) | S$330 to S$650+ a month | By sector and dependency ratio |
| Medical and dental cover | S$1,500 to S$4,500+ a year | Market standard, mandatory for S Pass and WP |
| Total employer on-cost | ~2% to 19% | Above base salary, by status and seniority |
For a senior engineer on S$144,000 gross, budget roughly S$13,900 of employer CPF if they are a citizen, about S$160,400 all-in. On an Employment Pass the same person costs closer to S$147,600. Ask us for a cost model with current ceilings applied.
Payroll and tax
Salaries must be paid at least monthly and reach the employee within 7 calendar days of the end of the salary period under § 21 of the Employment Act. Overtime has its own clock: 14 days. Every employee gets an itemised payslip under § 96A showing basic salary, allowances, overtime, deductions and net pay. CPF, the Skills Development Levy and self-help group deductions go through CPF EZPay and must reach the CPF Board by the 14th of the following month.
Income tax and the Auto-Inclusion Scheme
Singapore does not run monthly income tax withholding. Employees file and pay their own tax. Your obligation is reporting: an employer with 5 or more employees must join the Auto-Inclusion Scheme and submit Form IR8A earnings data to the Inland Revenue Authority of Singapore (IRAS) by 1 March. Resident rates are progressive, from 0% on the first S$20,000 of annual income to 15.0% between S$120,000 and S$160,000, topping out at 24.0% above S$500,000. Non-residents pay a flat 15% on employment income or the resident rates, whichever produces more tax.
Statutory minimum wage
Singapore has no universal national minimum wage. Pay for professional and executive roles is negotiated. Two mechanisms create floors: the Progressive Wage Model, which sets wage ladders in cleaning, security, landscape, lift and escalator, retail, food services and waste management, plus ladders for administrative and driver roles in every sector; and the Local Qualifying Salary, the minimum you must pay a local worker for them to count toward your foreign worker quota, S$1,600 a month or S$10.50 an hour.
Leave and mandatory benefits
- Paid annual leave. 7 working days in the first year after 3 months of continuous service, rising by 1 day a year to 14 from the eighth, under § 43 of the Employment Act. Technology and multinational employers typically offer 15 to 21 days from day one.
- Public holidays. 11 gazetted days. Working one earns an extra day's pay or an agreed day off in lieu. A holiday falling on a Sunday moves to the Monday.
- Sick leave. After 6 months of service, up to 14 working days of paid outpatient leave and 60 working days of hospitalisation leave, the 60 inclusive of the 14. A graduated entitlement applies between months 3 and 6.
- Maternity. 16 weeks of Government-Paid Maternity Leave for the mother of a citizen child. You fund the first 8 weeks, the government the next 8 up to a cap, and all 16 for a third or later child.
- Paternity. 4 weeks of Government-Paid Paternity Leave, government funded up to S$2,500 a week, plus a shared parental leave pool parents can divide.
- Childcare. 6 days a year for parents of citizen children under 7, split 2 employer-funded and 4 government-funded, plus 2 days for children aged 7 to 12.
- National Service. Citizen employees must be released for reservist training. The Ministry of Defence reimburses base salary.
- Annual Wage Supplement. The 13th month payment is customary but not statutory unless your contract promises it.
- Working time. Part IV employees, non-workmen earning up to S$2,600 a month and workmen up to S$4,500, are capped at 44 hours a week with one rest day, overtime at 1.5 times the hourly basic rate and 72 overtime hours a month. Everyone else works to contract.
- Insurance. Work Injury Compensation cover is mandatory for manual workers and non-manual staff earning up to S$2,600 a month. S Pass and Work Permit holders need medical insurance with at least S$60,000 of annual cover.
Termination and notice periods
Notice is a matter of contract in Singapore. Write the period you want into the agreement and it governs. Where the contract is silent, the statutory default in § 10 of the Employment Act applies, and either side can go immediately by paying salary in lieu.
| Completed service | Statutory default notice (§ 10 EA) |
|---|---|
| Less than 26 weeks | 1 day |
| 26 weeks to under 2 years | 1 week |
| 2 years to under 5 years | 2 weeks |
| 5 years and above | 4 weeks |
- Summary dismissal needs an inquiry. Dismissing for misconduct without notice under § 14 requires a documented investigation and a chance to answer.
- Wrongful dismissal has a 1-month clock. Claims go to the Tripartite Alliance for Dispute Management (TADM) within 1 month of the last day, mediation is compulsory, and unresolved claims go to the Employment Claims Tribunals, capped at S$20,000, or S$30,000 with a recognised union.
- Retrenchment must be reported. An employer with 10 or more staff retrenching 5 or more people in any rolling 6-month window must notify the Ministry of Manpower within 5 working days.
- Retrenchment benefit is not statutory. It is owed only if your contract says so. The tripartite norm is 2 weeks to 1 month of salary per year of service after 2 years.
- Tax clearance stops the money. For any non-citizen leaving, file Form IR21 with IRAS at least 1 month before the last day and withhold final pay, bonus and leave encashment until clearance issues.
- Discrimination is enforceable. Dismissal on grounds of pregnancy, age, nationality, race, religion, sex or disability counts as dismissal without just cause.
Can I use independent contractors?
Only where the relationship is genuinely a contract for service rather than a contract of service. The Ministry of Manpower and IRAS test four things: control, who sets hours, place of work and how the task is done; integration, whether the person sits in your org chart with your email and badge; economic reality, who supplies the tools and bears profit and loss; and method of payment, a fixed monthly salary with leave rather than invoices against milestones. Get it wrong and the relationship is recharacterised as employment from day one. You then owe backdated employer and employee CPF with interest compounding at 18% a year, back taxes, and accrued annual leave, sick leave, holiday pay and overtime. Employment Act breaches carry fines of S$5,000 to S$10,000 and, for repeat corporate officers, up to 12 months of imprisonment. A genuine Self-Employed Person also owes their own CPF Medisave once net trade income exceeds S$6,000 a year. If the person works like an employee, employ them.
The legal framework in brief
Singapore employment law is statutory, supplemented by ministerial regulations and by tripartite guidelines that are not binding at common law but are enforced hard by the Ministry of Manpower. The instruments you will hear most:
- Employment Act 1968 (Cap. 91). The primary statute, covering every employee under a contract of service at any salary level.
- Part IV of the Employment Act. Working hours, rest days and overtime, for workmen earning up to S$4,500 a month and non-workmen up to S$2,600.
- Central Provident Fund Act 1953. Compulsory retirement, healthcare and housing savings for citizens and permanent residents.
- Child Development Co-Savings Act 2001. Maternity, paternity, adoption, shared parental and childcare leave.
- Workplace Safety and Health Act 2006 and Work Injury Compensation Act 2019. Safety duties, risk assessments and no-fault injury compensation insurance.
- Employment Claims Act 2016. Dispute resolution through TADM and the Employment Claims Tribunals.
- Personal Data Protection Act 2012. Employee data may be used for employment purposes with prior notice, surveillance must be disclosed, every employer appoints a Data Protection Officer, and serious breaches are reported within 3 days.
- Tripartite guidelines. Fair employment, wrongful dismissal and flexible work requests, which need a written answer within 2 months.
Where the talent is
Singapore is the regional headquarters of choice for thousands of multinationals, and the talent market reflects it: APAC managing directors, finance controllers, compliance leaders and engineers, working in English and often Mandarin, Bahasa or Tamil. Foreign hires need a work pass, and Employment Pass applications must clear the points-based COMPASS framework and usually a 14-day MyCareersFuture advertisement first. Build that into your start date.
| Region | Talent and industry concentration |
|---|---|
| Central Business District and Marina Bay | Regional headquarters, investment banking, private equity, wealth management, fintech |
| One-North and Buona Vista | Deep tech, AI research, biomedical sciences, media and gaming |
| Changi Business Park | Fintech delivery, IT shared services, regional operations, supply chain |
| Jurong Innovation District | Advanced manufacturing, industrial robotics, clean technology, agritech, engineering |
Singapore Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step. Built from Dryft's onboarding checklist for Singapore.
- Step-by-step implementation checklist, from hiring route selection to first payroll
- Citizenship and CPF status check, with the wage ceilings applied
- Work pass assessment, COMPASS scoring and the MyCareersFuture advertising rule
- Mandatory Key Employment Terms and the 14-day issuing deadline
- Part IV coverage test, plus CPF, Skills Development Levy and self-help group setup
- WICA and foreign worker medical insurance verification
- PDPA, Data Protection Officer and flexible work procedure
- Offboarding and Form IR21 tax clearance protocol
- Every official Singapore authority with direct links
This guide is general information, not legal, tax or immigration advice. Singapore employment rules, CPF schedules, tax brackets and work pass criteria are revised regularly by the Ministry of Manpower, IRAS and the CPF Board. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.
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