Singapore is a prominent financial centre of the ASEAN region. Its economic and political stability, favourable taxation policies, advanced healthcare system and strategic location in South-East Asia make it an attractive destination for business owners and job seekers. Its 80 agreements to avoid double taxation and an extensive network of 27 free trade agreements (FTAs) provide businesses colossal access to the Asian markets. The city-state is also negotiating agreement terms with the Pacific Alliance-Singapore and Eurasian Economic Union (EAEU) to expand its free trade areas further. The country’s tax regime offers business owners numerous tax reliefs and incentives, creating a supportive business environment.
Work Permit/Residence Permit for Foreign Nationals
In Singapore, two different authorities issue work visas and other immigration permits. While the Ministry of Manpower (MOM) issues work permits, the Immigration and Checkpoints Authority (ICA) handles different kinds of movement and residence permits.
Work permits are usually issued to unskilled and semi-skilled workers. However, skilled workers and technology talent can apply for an Employment Pass in industries with skill shortages. All employment visas must be applied for by the employer via the MOM’s online portal. These are valid initially for 2 years, with separate conditions for extension for each type of visa.
Employment Contracts
The employer is responsible for drafting a detailed contract that complies with the MOM’s guidelines. The MOM also has a tool for employers to verify that their contract terms comply with the country’s regulations. However, checking for each employee and staying updated on the modifications can be tedious. Employers can apply for a work permit or an employment pass with a signed employment contract (by both parties) only.
A Singaporean contract of service must include the following key employment terms (KETs):
- Employee and employer details.
- Job role and expectations from the employee.
- Start and duration of employment along with work location.
- Work arrangements, including the number of working days per week, work hours for each day and a weekly rest day.
- Fixed and variable salary components and deductions.
- Details of benefits, such as leaves, medical benefits, insurance, etc.
- Probation and notice period details.
Working Hours and Overtime
Singapore has well-defined work arrangements for various types of workers. All regular employees are entitled to at least one rest day per week. For shift workers, a rest day can be a continuous period of 30 hours.
Working hours for regular workers
Work 5 or fewer days per week: No more than 9 hours per day or 44 hours in the week.
Work more than 5 days a week: No more than 8 hours per day or 44 hoursa week.
Working hours for contractual workers
Less than 44 hours every alternate week: Up to 48 hours a week but no more than 88 hours for any consecutive two-week period.
Shift of up to 12 hours a day: The average of any 3 consecutive weeks should not exceed 44 hours.
Overtime entitlements
Only non-workmen* with a monthly basic salary of up to S$2,600 (US$1,934) and workmen with that of up to S$4,500 (US$3,347) are eligible for overtime pay.
Employers must pay at least 1.5 times the hourly basic pay with the period’s salary or within 14 days of the last salary period. Overtime for non-workmen has an upper limit of S$13.60 (US$10.12) per hour. Overtime hours worked in a month cannot exceed 72 hours.
Overtime does not apply to employees with PME (professional, manager, executive) status, regardless of their salary levels. These employees are usually Employment Pass holders.
*Workmen and non-workmen are the terms used by the Ministry of Manpower for “someone whose work involves mainly manual labour.”
Minimum wage
The Ministry of Manpower of Singapore does not prescribe a minimum wage for local or foreign workers. The country believes that these should be determined by market forces, and employers should pay competitive remunerations to retain talent.
Cost of living
Excluding rent, the average cost of living in Singapore for an individual is S$1,472.10 (US$1,095), and that of a family of four is S$5,306.80 (US $3,947).
Vacation Allowance
Workers are entitled to incremental annual leave according to their years of service. This leave applies after completing the first three months of engagement with a company.
| Years of service | Number of Leaves |
| 1st | 7 |
| 2nd | 8 |
| 3rd | 9 |
| 4th | 10 |
| 5th | 11 |
| 6th | 12 |
| 7th | 13 |
| 8th and thereafter | 14 |
Termination
Both the employer and the employee can initiate termination of the employment contract in a documented format. The notice period is according to what is mentioned in the employment contract. If not, the notice period term is according to the duration of the engagement.
| Length of service | Notice period |
| Less than 26 weeks | 1 day |
| 26 weeks to less than 2 years | 1 week |
| 2 years to less than 5 years | 2 weeks |
| 5 years or more | 4 weeks |
Whoever wishes to bypass the notice period must compensate the other with the employee’s regular pay.
How Access Financial Can Help
Access Financial helps corporate clients, recruitment agencies and independent contractors mitigate tax liabilities, minimise administration load, ensure compliance and boost take-home income while fully subscribing to Singapore’s Employment Act. Our EOR and Employed solutions include extensive payroll and talent management services.
Please speak to our team today!
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