Hiring Employees in Singapore
What are the applicable laws to my employee?
The main laws that apply when you hire an employee are the Employment Act, which sets out core terms such as salary, working hours and leave, and the Employment of Foreign Manpower Act (EFMA), which governs the hiring of foreign employees on work passes such as the Employment Pass (EP), S Pass and Work Permit. Other laws also apply, including the Central Provident Fund (CPF) Act, the Income Tax Act, the Skills Development Levy Act and the Work Injury Compensation Act.
Employment Agreements in Singapore
Sometimes called an offer letter, terms of engagement, appointment letter or employment contract, the employment agreement sets out the terms between Singapore employers and employees.
Payslips and other key employment terms
Under the Employment Act, on top of an employment agreement, employers need to do the following for employees covered by the Act:
- Issue itemised payslips together with each salary payment, or if that's not possible, within three working days of payment.
- Issue Key Employment Terms (KETs) in writing to employees employed for 14 days or more, within 14 days from the start of employment. KETs cover items such as job title and duties, working hours, salary, allowances, leave, probation and notice period.
- Keep employment records, which consist of employee records and salary records.
These requirements, in place since April 2016, help employees understand how their salary is calculated and help employers minimize misunderstandings and disputes in the workplace.
Additional requirements for foreign employees
If you hire foreigners, you will need to apply for a work pass for your employee with the Ministry of Manpower (MOM). These include:
- Employment Pass for professionals, managers and executives. The current minimum qualifying salary is $5,600 a month, or $6,200 in financial services, and it rises with the candidate's age. Applicants must also pass the COMPASS points framework. For new applications from 1 January 2027, the minimum rises to $6,000, or $6,600 in financial services.
- S Pass for mid-level skilled workers. The current minimum qualifying salary is $3,300 a month, or $3,800 in financial services, and it also rises with age. S Pass hiring is subject to quotas and levies. For new applications from January 2027, the minimum rises to $3,600, or $4,000 in financial services.
- Work Permit for semi-skilled workers in the construction, manufacturing, marine shipyard, process or services sector. Work Permit hiring is subject to quotas and levies.
Both employers and employees face stiff penalties for working without a valid work pass. Make sure MOM has approved the pass before your employee starts work in Singapore.
Central Provident Fund (CPF) contributions and additional levies
If your employee is a Singapore citizen or permanent resident (PR), you need to make CPF contributions for them. Contributions are due on the last day of each month and must be paid by the 14th of the following month. Late payments attract interest of 1.5% a month.
Your monthly CPF submission also includes:
- The Skills Development Levy (SDL), which is payable for all employees working in Singapore, including foreign employees.
- Self-help group contributions (CDAC, ECF, MBMF or SINDA), which are deducted from the employee's wages based on their race or religion.
Paying levies
The Singapore Government charges a Foreign Worker Levy (FWL) for Work Permit and S Pass holders. The levy helps regulate the demand for foreign workers in Singapore.
Hiring students
There are several ways to bring students into your company.
Local students
You can hire Singapore citizen or PR students on a full-time or part-time basis. The Employment Act has special rules for children under 13 and young persons under 16.
CPF for local interns. CPF is generally payable for interns, as for any other employee. You are exempt only if the student:
- is enrolled in an institution or programme subsidised by the Ministry of Education (MOE), and
- is doing training approved by their institution.
If you rely on this exemption, get and keep supporting documents from the institution. You can still pay these interns a monthly allowance.
Foreign interns
If you wish to give an internship to a foreigner, you will need to apply for one of these passes:
- Training Employment Pass
- Training Work Permit
- Work Holiday Pass, under either the Work Holiday Programme or the Work and Holiday Visa Programme
Student Pass holders. A Student Pass does not on its own allow someone to work. A Student Pass holder can work without a work pass only if they are a full-time student at an institution on MOM's approved list. During term time, the work must be no more than 16 hours a week or part of an internship run by their institution. During school vacation, they can work without these limits if they are aged 14 or above. Exchange students taking modules in Singapore do not qualify. Check your intern's institution against MOM's list before they start work.
Tax clearance for foreign employees
When a non-Singapore citizen employee stops working for you, goes on an overseas posting, or leaves Singapore for more than three months, you must seek tax clearance from the Inland Revenue Authority of Singapore (IRAS):
- File a Form IR21 at least one month before the employee's last day, posting or departure.
- From the date you become aware of the cessation or departure, withhold all monies due to the employee until IRAS gives clearance.
Use IRAS's tax clearance calculator to check whether clearance is needed. Filing late or not filing without a valid reason can lead to a fine of up to $5,000.
Separately, you must cancel the employee's work pass within one week after their last day of notice. For EP holders, the employer must also buy the employee's repatriation air ticket. MOM does not need the physical pass returned. Once the pass is cancelled, cut the card in half and discard it to prevent misuse.
