Payroll and Benefits Guide Singapore
Last updated: Apr 11, 2023
Contributions
Employer
Employer Payroll Contributions
|
17.00% |
Central Provident Fund – CPF (Pension for employees aged 55 and below, reduces progressively to 7.5% as age increases) this applies to Singapore Citizens or Permanent Resident employees earning total wages of more than $50 per month. Capped at SGD 1,071 monthly. |
|
0.25% |
Skills Development Levy (SDL) (capped at 11.25 SGD per month) |
|
350 USD/month |
Foreign worker surcharge (may vary depending on sector, worker skill and local/expat ratio employed in the company) |
|
450 SGD/month |
For S PASS holders (mid-skilled foreign employees performing specialized roles.) |
|
Amount varies based on company specifics |
Work Injury Compensation Act insurance- Required for employees doing manual work, as well as all employees earning $2,600 or less a month, in accordance with to Ministry of Manpower. |
|
17.00% – 17.25%+350USD/month+450 SGD/Month |
Total Employment Cost |
Employee
Employee Payroll Contributions
|
20.00% |
Central Provident Fund – CPF (Pension for employees aged 55 and below, reduces progressively to 5% as age increases) this applies to Singapore Citizens or Permanent Resident employees earning total wages of more than $50 per month. Capped at 1,260 SGD monthly. |
|
20.00% |
Total Employee Cost |
Employee Income Tax
|
0% |
up to 20,000 |
|
2% |
20,000-30,000 |
|
3.5% |
30,000-40,000 |
|
7% |
40,000-80,000 |
|
11.5% |
80,000-120,000 |
|
15% |
120,000-160,000 |
|
18% |
160,000-200,000 |
|
19% |
200,000-240,000 |
|
19.5% |
240,000-280,000 |
|
20% |
280,000-320,000 |
|
22% |
320,000-500,000 |
|
23% |
500,000-1,000,000 |
|
24% |
above 1,000,000 |
Employer taxes
Employee taxes
Minimum Wage
General
Singapore does not have a national minimum wage. However, in recent years, minimum wages are starting to be set for specific industries, such as the cleaning, security, and landscape sectors.
Singapore does have a scheme called Workfare that supports low-wage workers (Singapore citizens) aged 35 and above, who earn a gross monthly income of not more than 2,300.00 SGD.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
In the event of termination/resignation, payment is due on the last day of work.
13th Salary
It is customary to pay a 13th month salary at the end of the year in Singapore.
Authority Payments
| Authority Payment | Dates | Methods |
|
Central Provident Fund Board (CPFB) |
Monthly; 14th of every month (working days). It may differ if 14th fall on weekends. |
Giro payment, Cheque payment, Direct Debit Authorisation, (DDA) Standing Instructions, eNETS |
|
Inland Revenue Authority of Singapore (IRAS) |
Monthly; 14th of every month (working days). It may differ if 14th fall on weekends. |
Giro payment, Electronic payment, Telegraphic Transfer |
Working Hours
General
Part IV of the Singapore Employment Act states that the standard maximum number of working hours in Singapore are 44 hours per week.
Overtime
For employees covered by the Employment Act, overtime work is paid at a rate of at least 150% of the basic hourly rate of pay for eligible employees, with a maximum of 12 hours worked in any one day and 72 hours in a month. The maximum monthly overtime pay for an employee classified as a white collar worker is f 4,500 SGD and 2,600 SGD for a blue collar worker.
The employer must pay overtime within 14 days of the last day of the salary period.
Working Week
Monday–Friday
Leave
Paid Time Off
PTO is stipulated for employees covered by the Employment Act who have completed at least three months service. They’re entitled to paid annual leave of at least 7 days in their first year, increasing by one day for each year of service thereafter. However, it is common practice for employers to grant 14–20 days after the completion of the first year.
Public Holidays
There are 11 public holidays. Public holidays falling on a Sunday are moved to the next working day as a day off in lieu. Public holidays falling on a Saturday should either be paid out or an extra day off should be given in lieu.
Sick Days
Once an employee has completed six months of service, the employee is entitled to paid sick leave (at regular gross salary) of 14 days per year if no hospitalization is necessary, or 60 days per year if hospitalization is necessary; this leave includes 14 days as outpatient care.
Before completing six months of employment, an employee is entitled to a number of paid sick days depending on the length of employment at the time.
- Up to three months – five days per year, 15 days if hospitalization is necessary
- Four months – eight days per year, 45 days in the case of hospitalization
- Five months – 11 days per year, 45 days in the case of hospitalization
- Six months – 14 days per year, 60 days in the case of hospitalization
The employee must inform their employer within 48 hours of any inability to work and provide a certificate from a medical professional upon returning to work, for any period of sickness.
Maternity Leave
A pregnant employee, employed for at least three months before the due date and the child being a Singaporean citizen, is entitled to 16 weeks of paid maternity leave. The maternity leave consists of two periods: the woman may take up to 8 weeks before the expected due date but no less than 28 days and the remaining weeks after the baby’s birth.
If the child is not a Singaporean citizen, the maternity leave period is reduced to 12 weeks.
For the first and second child, the first eight weeks are paid by the employer (at regular gross salary). The additional eight weeks can be reimbursed by the Government capped at 10,000 SGD per 4 weeks or a total of 20,000 SGD per child.
However, from the birth of the third child, all 16 weeks of maternity leave are reimbursed directly by the Government, capped at 10,000 SGD per 4 weeks or a total of 20,000 SGD per child.
Paternity Leave
The father/partner is entitled to 2 weeks of paid paternity leave after the baby is born, following three months of service, and within 16 weeks after the baby’s birth. This leave is funded by the Government-Paid Paternity Leave (GPPL), capped at 2,500 SGD per week or a total of 5,000 SGD.
Adoptive fathers are also eligible for government-paid paternity leave if they meet the eligibility criteria.
Parental Leave
Eligible fathers can apply for Shared Parental Leave allowing them to share up to 4 weeks of their wife’s 16 weeks Maternity Leave. The payment is reimbursed by the Government capped at 2,500 SGD per week
Each parent who has at least 3 months service is eligible for 6 days per year of Childcare Leave until the year the child turns 7 years old, regardless of the number of children they have. Childcare leave is capped at 42 days for each parent.
The employees need to consume their yearly childcare leave entitlement by the end of that year. They cannot carry forward childcare leave meant for one year to the next.
The leave is paid as follows:
- The first 3 days will be paid by the employer.
- The remaining 3 days will be paid by the Government.
- Payments are capped at 500 SGD per day, including CPF contributions, or a total of 1,500 SGD in any calendar year.
The employees are eligible for 2 days of Extended Childcare Leave per year if their youngest child, which is a Singapore citizen is between 7 and 12 years old (inclusive). These days are reimbursed by the Government, capped at 500 SGD per day.
Bereavement leave
In the event of the death of an immediate family member, although this is not a statutory entitlement, many Singaporean employers allow employees two or three days of paid leave.
Marriage Leave
In the event of an employee’s marriage, the employee may take up to five days of leave.
Voting Leave
In Singapore, voting/polling day is a public holiday.
Military
Employees are entitled to receive paid reservist leave on an annual basis when they receive the official Notification of National Service Call Up –SAF 100 issued by the government.
Termination
Termination Process
The employer or the employee may end the employment relationship by providing the legally required notice, provided it is not for an illegal reason such as discrimination of a group protected by law, etc., and it is in accordance with the contract of employment.
Leavers should be paid all outstanding holiday entitlement, assuming the reason for termination is not misconduct. The employer must seek appropriate tax clearance from IRAS before making the final payment.
If the employer terminates the contract or the employee resigns and works the full notice period, payment is made on the last day of employment or within three days if this is not possible.
If an employee resigns without notice and does not work during the notice period, the payment is made within seven days of the last day of employment.
Notice Period
Less than 26 weeks of service – 1 day notice
More than 26 weeks but less than 2 years of service – 1 week notice
More than 2 years but less than 5 years of service – 2 weeks notice
More than 5 years of service – 4 weeks notice
During the probation period, employment can be terminated by either the employer or the employee with five days of notice.
Severance Pay
In Singapore, employment contracts/collective agreements contain “retrenchment benefit” payments due upon termination once an employee has completed two years of service. It is common practice for this to be 2–4 weeks’ pay for each year in employment.
Probation Period
The probation period in Singapore is set within the employment contract/collective agreement and is generally 3-6 months.
VISA
VISA
Work permits are required in Singapore; however, the type of permit required is based on the person’s skills. A person with a degree, professional qualifications, or specialist skill will need an employment pass to work in Singapore.
In contrast, a work permit is required for other skilled or unskilled foreign workers. The Singapore Ministry of Manpower (MOM) is responsible for issuing of all types of employment passes.
Different types of employment passes may be issued depending on the applicant’s salary, but the basic procedures remain the same. An employment pass is set by the individual and the company they work for. If an employment pass holder wants to change jobs, the employer must cancel the existing EP, and the new employer will have to apply for a new one.
The employment pass must also be cancelled if the holder ceases employment in Singapore or obtains permanent resident status.
VAT
General
The standard VAT The Minister for Finance announced in Budget 2022 that the GST rate increase will be staggered over two steps: (i) from 7% to 8% with effect from 1 Jan 2023; and (ii) from 8% to 9% with effect from 1 Jan 2024.
Companies looking to hire in Singapore without a foreign subsidiary can check out our full PEO service in Singapore.
Stay up to date on payroll & employment law changes
Version History
Questions & Answers
See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws
Payroll and Benefits Guide
in Singapore
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Day | Date | Holiday | Notes |
|---|---|---|---|
| Sunday | Jan-1 | New Year's Day | |
| Monday | Jan-2 | New Year’s Day Holiday | Day Off in Lieu |
| Sunday | Jan-22 | Chinese New Year | |
| Sunday | Jan-23 | Chinese New Year | |
| Tuesday | Jan-24 | Chinese New Year Holiday | Day Off in Lieu |
| Friday | Apr-7 | Good Friday | |
| Saturday | Apr-22 | Hari Raya Puasa | |
| Monday | May-1 | Labour Day | |
| Friday | Jun-2 | Vesak Day | |
| Thursday | Jun-29 | Hari Raya Haji | |
| Wednesday | Aug-9 | National Day | |
| Friday | Sep-1 | Polling Day | |
| Sunday | Nov-12 | Deepavali | |
| Monday | Nov-13 | Deepavali Holiday | Day Off in Lieu |
| Monday | Dec-25 | Christmas Day |
When a non-Singaporean national is terminated, is there anything that the employer has to do?
Hi, thank you for your question. In Singapore, a large portion of the workforce consists of non-Singaporean nationals. The only difference between a local and a foreign national in the termination process is the final payment. The foreign employee must apply for a final tax directive from the Inland Revenue Authority of Singapore. Only after the last tax directive is received and is paid can the employee receive their final payment.
Good afternoon,
We need to pay a new hire, national resident of Singapore to work for us in Singapore.
However we do not want to create a company in Singapore for one employee.
Can we run a Singapore payroll as a non resident company?
Is it a service you offer?
Hi Tanya, thank you for your question. In order to determine this, I would suggest scheduling a demo to discuss what your options are in regards to employing someone in Singapore. https://papayaglobal.com/schedule-a-demo/
Thank you Emily, I went through the demo, but it is jumping to services, but I need to define them first
Hi Tanya, I will have someone on our sales team reach out to you directly.
What are the common private Health benefits for employee + family in Singapore?
What is the type of coverage and company contribution?
Private health insurance is common in many companies, and many offer benefits to family members as well – it all depends on the company’s approach to benefits. It is common for expat workers to receive private health insurance, with some contribution to family members as well.
Are medical expenses a taxable benefit in Singapore
It can vary depending on the type of benefit and how it is offered. I recommend they review the tax authority website to see which applies to them https://www.iras.gov.sg/taxes/individual-income-tax/employers/understanding-the-tax-treatment/medical-and-dental-care