SG – E-Talent

Singapore

The Lion City

What you'll learn

OVERVIEW

Singapore Introduction

Singapore is a sovereign island country and city-state in southeast Asia. It lies just north of the equator, off the southern tip of the Malay Peninsula, bordering the Strait of Malacca, the Singapore Strait, the South China Sea, and the Straits of Johor. The country’s territory contains 1 main island, 63 satellite islands and islets, and 1 outlying islet. Singapore is a highly developed country with the 2nd-highest GDP per-capita in the world, and its combined area has increased by 25% since its independence as a result of extensive land reclamation projects.

Employment Terms

EMPLOYER TAXES

17.25% (estimated)

★ 17% – Central Provident Fund

★ 0.25% – Skills Development Levy

Types of Contracts

The minimum contract length for local employees is 6 months (negotiable as it will be based on case by case). Part-time contracts are possible; however, note that it’s unlikely for an expat to be accepted for a visa on a part-time contract.

Job Title Restrictions

There are no job title restrictions in Singapore

Working Hours

The standard amount of work hours is up to 48 hours per week, but capped at 88 hours in any continuous 2-week period.

Overtime hourly rate is 1.5 times the hourly basic rate of pay, and payment must be made within 14 days. Employees who work on a holiday, should be paid an extra day’s salary.

Minimum Wage

The minimum salary is 1600 SGD per month.

Probation Period

The minimum probation period is 1 week. The standard probationary period in Singapore ranges from 3 to 6 months, and can be extended where there are reasonable grounds to justify it.

Payslips

Employers must issue itemized pay slips to all employees covered by the employment act, within three working days of salary payment.

Taxes & Local Employment Costs

Employee Taxes

Employees pay income tax depending on their residency status:

Additionally, employees need to make contributions to the Central Provident Fund (CPF): 20% of gross salary, capped at SGD 6,000

Employer Taxes & Contributions

Central Provident Fund (CPF): 17% of the employee’s gross salary, capped at SGD 8,000

Skills and Development Levy (SDL): 0.25% of the employee’s gross salary

Types of Leave

Annual Leave

An employee is entitled to paid annual leave if they have worked for their employer for at least 3 months.

After these 3 months, annual leave starts at 7 days for the first year of employment, then increases as follows, with a maximum of 14 days:

In the first year (3-12 months) – the annual leave is distributed according to the number of months worked.

Unpaid leave can be taken above the amounts listed if agreed between employee and employer. Any unused leave can be rolled over to the following year by mutual agreement, or can be paid out to the employee.

Sick Leave

Employees are entitled to up to 14 days for paid outpatient sick leave and 60 days for paid hospitalization leave. The 60 days of paid hospitalization leave includes the 14 days paid outpatient sick leave entitlement.

Employees must have at least 3 months’ service with their employer to be entitled to statutory paid leave, and from this point the number of days is distributed based on months of service. For more information on sick leave, see the government website here.

Maternity Leave

Depending on the employee’s personal circumstances, after an employee has worked for a company for 3 months, they are entitled to at least 12 weeks of government-paid maternity leave. In specific cases, they are eligible for 16 weeks’ leave. For more information on maternity entitlements, see the government website here.

Paternity Leave

Eligible working fathers are entitled to 2 weeks of paid paternity leave funded by the Government, if:

Public Holidays

Singapore has 11 days of paid public holidays per year.

Benefits

It’s possible for employers to provide supplementary benefits such as medical insurance, however, insurance companies in Singapore generally require all employees to have the same level of cover, making this impractical in most circumstances.

Employers may repay employees for taking out their own private insurance policies, but this would be considered taxable income.

Medical Insurance

Public medical insurance (Medishield Life) is covered by the employee’s CPF (Social Security) payment.

MediShield Life is a basic health insurance plan which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. MediShield Life is compulsory for all Singapore citizens and Permanent Residents. For Employment Pass holders, health insurance is not a requirement.

Employees can optionally enhance government insurance by purchasing private medical insurance.

Termination Process

Notice Period

Notice periods may be discussed between the employee and employer, but if not written in contract, the statutory rules are:

The notice period rules above apply regardless of whether there is a probation period or not. Salary can be paid in lieu of notice; likewise, an employee may “buy themselves out” of the notice period (or their future employer may provide this money).

Statutory Payments

Any unused paid leave should be converted to cash included in their final pay. There are now laws requiring severance pay in Singapore, however, the common practice is to pay between 2 weeks to one month of salary per year of service.

If an employee worked less than three years in the company is not entitled to retrenchment benefits under the employment act.

Additional Information

While not mandatory, it is customary to pay employees a 13th-month salary bonus at the end of the year.