Payroll Information

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Payroll Cycle

In Singapore, the payroll cycle is typically monthly, with employers required to pay their employees within 7 days after the end of the salary period. Employers may also choose to pay their employees bi-weekly or semi-monthly, as long as the total pay for the month is not less than the employee's monthly salary.

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Employment Law

Employment in Singapore is governed by the Employment Act, which sets out the minimum standards for working conditions and terms of employment for all employees in Singapore, regardless of their nationality or occupation. The Act covers areas such as working hours, rest days, overtime pay, sick leave, and annual leave. Employers are also required to contribute to the Central Provident Fund (CPF) for their employees, which is a social security savings scheme that provides retirement, healthcare, and housing benefits.

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Employment Contract

Employment contracts in Singapore are typically written agreements between the employer and employee that set out the terms and conditions of employment. These contracts must comply with the requirements of the Employment Act and should include details such as the job title, job scope, salary, working hours, and employment benefits. Employers must provide employees with a written employment contract within 14 days of their start date.

In addition to the above, employers in Singapore are also required to comply with other legal requirements such as obtaining valid work passes for their foreign employees, ensuring workplace safety and health, and providing equal employment opportunities to all employees.

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Probation Period / Trial Period

Employers in Singapore may have a probation period for new employees, which can range from 3 to 6 months. During this period, the employer can assess the employee's suitability for the job, and the employee can decide whether to continue working for the employer. If either party wishes to terminate the employment during the probation period, a notice period of 1 day must be given.

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Working Hours

Under the Employment Act, the standard workweek in Singapore is 44 hours, with a maximum of 9 hours per day. However, some industries may have different work hours, and employees who are in managerial or executive positions may not be subject to the standard working hours. Employees who work more than 44 hours per week are entitled to overtime pay.

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Overtime

Employees who work overtime in Singapore are entitled to overtime pay, which is typically 1.5 times their hourly rate. However, employees who are in managerial or executive positions and earn a monthly salary of at least SGD 4,500 may not be entitled to overtime pay.

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Bonus

Employers in Singapore may provide bonuses to their employees, such as performance bonuses, 13th-month bonuses, or other incentives. However, bonuses are not mandatory, and the amount and frequency of bonuses may vary between employers.

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Termination

Employers in Singapore must give notice to employees before terminating their employment, or provide payment in lieu of notice. The notice period depends on the length of service of the employee, ranging from 1 day to 4 weeks. Employees may also be terminated without notice or payment in lieu of notice for cause, such as misconduct or poor performance.

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Notice Period

The notice period in Singapore is legislated according to employment length, if the employees who have been employed for:

1/ less than 26 weeks are required to provide 1 day’s notice.

2/ less than 24 months and more than 26 weeks must provide 1 week’s notice.

3/ less than 60 months and more than 24 months are required to provide 2 weeks’ notice.

4/ more than 60 months are required to provide 4 weeks’ notice.

5/ During the probation period, the employment can be terminated by either the employer or the employee with 5 days of notice.

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Redundancy / Severance Pay

Employers in Singapore may implement a redundancy exercise when there is a need to restructure or downsize their workforce. In such cases, the employer must follow a fair and transparent process, which includes notifying the affected employees in advance, offering them suitable alternative employment if available, and providing them with a severance payment if they are unable to find suitable employment.

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Maternity Leaves

Female employees in Singapore are entitled to 16 weeks of paid maternity leave if they have worked for their employer for at least 3 continuous months before the birth of the child. The first 8 weeks of maternity leave are paid by the employer, while the remaining 8 weeks are paid by the government.

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Paternity Leaves

Male employees in Singapore are entitled to 2 weeks of paid paternity leave if they are married to the child's mother and the child is a Singapore citizen. The paternity leave can be taken within 16 weeks of the child's birth.

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Parental Leaves

Working parents in Singapore are entitled to 6 days of unpaid leave per year to take care of their child who is below the age of 7, if they have worked for their employer for at least 3 continuous months.

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Vacation and Annual Leaves

Under the Employment Act, employees in Singapore are entitled to a minimum of 7 days of paid annual leave for the first year of service, and an additional day of annual leave for each subsequent year of service, up to a maximum of 14 days.

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Sick Leaves

Employees in Singapore are entitled to paid sick leave if they are unable to work due to illness or injury. The number of sick leave days depends on the employee's length of service, with a maximum of 14 days per year for employees who have worked for their employer for at least 6 months.

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Paid Outpatient Leaves

Under the Employment Act, employees in Singapore are entitled to a minimum of 7 days of paid annual leave for the first year of service, and an additional day of annual leave for each subsequent year of service, up to a maximum of 14 days.

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Other Leaves

Employers in Singapore may provide additional leave benefits to their employees, such as compassionate leave, study leave, or overseas leave. The terms and conditions of these leave benefits are usually outlined in the employment contract or employee handbook.

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Other Benefits

Employers in Singapore may also provide other benefits to their employees, such as health insurance, dental benefits, retirement benefits, or flexible work arrangements. The terms and conditions of these benefits are usually outlined in the employment contract or employee handbook.

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Holidays

There are 11 public holidays in Singapore, including Chinese New Year, Good Friday, and National Day. If a public holiday falls on a Saturday, employees who do not work on Saturdays are entitled to an extra day off or a day's pay, while if it falls on a Sunday, the following Monday will be a public holiday.

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Taxation

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Personal Income Tax

In Singapore, personal income tax is progressive, meaning that the more an individual earns, the higher the tax rate they will pay. The tax rates for resident individuals are as follows:

• 0% on the first SGD 20,000 of chargeable income
• 2% on the next SGD 10,000 of chargeable income
• 4% on the next SGD 10,000 of chargeable income
• 6% on the next SGD 40,000 of chargeable income
• 8% on the next SGD 80,000 of chargeable income
• 9.5% on the next SGD 80,000 of chargeable income
• 11% on the next SGD 80,000 of chargeable income
• 12% on the next SGD 80,000 of chargeable income
• 14% on the next SGD 160,000 of chargeable income
• 15% on the next SGD 320,000 of chargeable income
• 16% on any amount above SGD 1,000,000 of chargeable income

In addition to the above rates, there are also various deductions, reliefs, and rebates that can reduce an individual's tax liability. For example, tax deductions are available for contributions to approved charities, while tax reliefs are available for items such as dependent parent relief and foreign maid levy relief.

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Social Security

In Singapore, the social security system is known as the Central Provident Fund (CPF). Both employers and employees are required to contribute to the CPF, with the contribution rates varying based on the employee's age and income.

For employees aged below 55, the employer must contribute 17% of the employee's gross monthly salary to the CPF, while the employee must contribute 20% of their gross monthly salary. For employees aged 55 and above, the contribution rates are lower.

The CPF contributions are divided into three accounts: the Ordinary Account (OA), the Special Account (SA), and the MediSave Account (MA). The funds in the OA can be used for housing, education, and investment, while the funds in the SA can be used for retirement and healthcare. The funds in the MA can be used for approved medical expenses.

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Others

In addition to the above contributions, employers in Singapore are also required to contribute to a mandatory workplace safety and health insurance scheme known as the Work Injury Compensation Insurance (WICA).

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Work Visas

General Information

Types of Work Visas

There are several types of work visas available in Singapore, including Employment Pass (EP), S Pass, and Work Permit. The EP is for foreign professionals, managers, and executives, while the S Pass is for mid-level skilled staff. The Work Permit is for semi-skilled and unskilled foreign workers.

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Eligibility

To be eligible for a work visa in Singapore, the applicant must have a job offer from a Singapore-based employer. The employer must also be registered with the Ministry of Manpower (MOM) and have a quota for hiring foreign workers.

For the EP, the applicant must have a minimum monthly salary of SGD 4,500 and meet other criteria such as qualifications and work experience. For the S Pass, the applicant must have a minimum monthly salary of SGD 2,500 and meet other criteria such as qualifications and work experience. For the Work Permit, the applicant must meet certain criteria such as age, nationality, and work experience.

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Application Process

The application process for a work visa in Singapore typically involves the following steps:

• The employer applies for a Letter of Consent (LOC) or Work Permit from the MOM on behalf of the foreign employee.
• The MOM assesses the application and may request additional documents or information.
• If the application is approved, the MOM issues an In-Principle Approval (IPA) letter to the employer and the foreign employee.
• The foreign employee must then go to Singapore and undergo a medical examination and obtain a valid work visa.

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Validity

The validity of a work visa in Singapore depends on the type of visa and the applicant's circumstances. EPs are typically valid for up to 2 years and can be renewed thereafter, while S Passes and Work Permits are typically valid for up to two years and may be renewable.

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Dependents

If the foreign employee has family members who wish to join them in Singapore, they may apply for dependent passes. The application process and eligibility criteria are similar to those for work visas.

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