Hire employees in Singapore using an Employer of Record

You need someone in Singapore by next quarter. Your lawyer just said entity setup takes 6 months minimum. The math doesn't work.

While you're stuck in bureaucratic limbo, your competitors are already building teams and capturing market share. Singapore's business-friendly reputation doesn't extend to the actual mechanics of hiring – you'll need a local entity, proper employment contracts, and compliance with the Ministry of Manpower's requirements before you can legally employ anyone.

Here's the reality: you've got three ways to hire in Singapore, and each comes with different costs, timelines, and headaches.

Option 1: Set up your own entity

• Cost: S$15,000-40,000 upfront, S$8,000-15,000 annual maintenance
• Timeline: 4-6 months minimum
• Complexity: ACRA registration, tax setup, CPF enrollment, payroll system, HR infrastructure
• Makes sense when: Hiring 15+ people long-term, permanent market presence

Option 2: Hire contractors

• Cost: None upfront, but limited control
• Timeline: Immediate
• Risks: Misclassification penalties (up to S$10,000 per case), back CPF contributions, employment disputes
• Makes sense when: Short projects (< 6 months), specialized consulting work
• Note: Hire with Columbus also handles contractor agreements and payments

Option 3: Use an employer of record (Recommended for most)

• Cost: $179/month per employee
• Timeline: 2-3 days to hire
• Complexity: None – we handle everything
• Makes sense when: 1-50 employees, testing markets, multi-country teams

The math is pretty straightforward here. If you're hiring 1-8 people, entity setup costs more than 4-5 years of EOR fees ($179/month = $2,148/year per employee). An EOR like Hire with Columbus handles employment contracts, payroll, CPF contributions, work pass applications, and keeps you compliant with Singapore's evolving labor laws.

Ready to hire in Singapore without the 6-month wait? Get started with Hire with Columbus.

What employment types can you use?

You've got three ways to bring someone onboard in Singapore, and the costs tell the story. Entity setup runs around S$15,000 upfront plus ongoing compliance headaches. An EOR like Hire with Columbus? $179 per employee per month, and you're hiring in 2-3 days instead of 3-6 months.

Let's break down your options so you can make the call that actually makes sense for your situation.

How can you hire in Singapore?

Setting up your own entity means incorporating a Singapore company, which involves the Accounting and Corporate Regulatory Authority (ACRA), appointing local directors, and setting up payroll systems. You're looking at S$15,000-25,000 just to get started, then ongoing costs for accounting, legal compliance, and HR infrastructure.

The timeline's brutal too. Even with Singapore's efficient business registration, you need 3-6 months to handle incorporation, tax registration, employment pass applications, and payroll setup. That's assuming everything goes smoothly.

Hiring contractors seems tempting because you can start immediately. But Singapore's Employment Act is strict about what constitutes genuine contractor relationships. If someone works set hours, uses your equipment, and takes direction like an employee, you've got misclassification risk.

The penalties aren't joke money either. You could face back taxes, CPF contributions, and employment benefits for the entire relationship period. Plus legal fees if the contractor disputes their classification.

Using an employer of record like Hire with Columbus flips the script entirely. We become the legal employer in Singapore while you manage the day-to-day work. Your new hire gets a proper employment contract, full benefits, and legal protection. You get someone working in 2-3 days without the entity setup nightmare.

The math's pretty straightforward. Five employees through an EOR costs $895 monthly versus S$25,000+ upfront for an entity, plus ongoing compliance costs that easily hit S$2,000-3,000 monthly.

Employment contract types in Singapore

Once you've decided how to hire, you need to pick the right contract type. Singapore recognizes several employment arrangements, each with specific rules and protections.

Permanent employment contracts cover most full-time roles. These give employees full protection under the Employment Act, including notice periods, severance pay, and benefit entitlements. There's no fixed end date, so termination requires proper cause or notice.

Use permanent contracts for core team members you plan to keep long-term. They're the standard for roles like software developers, marketing managers, or sales representatives.

Fixed-term contracts work for specific projects or temporary needs, but Singapore limits how you can use them. You can't just keep renewing fixed-term contracts to avoid permanent employment obligations.

If you renew a fixed-term contract or the employee works beyond the original end date, it automatically converts to permanent employment. This happens whether you intended it or not.

Part-time employees get the same legal protections as full-time workers, just prorated. They're entitled to annual leave, sick leave, and public holiday pay based on their working hours.

Part-time means less than 35 hours weekly. Anything above that, and you're looking at full-time classification with full benefits.

Probationary periods can apply to any contract type. You get up to six months to evaluate new hires, with shorter notice periods during probation (one day's notice in the first month, one week's notice after that).

After probation ends, standard notice periods kick in based on tenure and salary level.

When you work with Hire with Columbus, we handle all the contract drafting and ensure you're using the right employment type for each role. We know which contract clauses are enforceable, what probation terms work, and how to structure everything to protect both you and your employee.

The contracts are in English, follow Singapore employment law exactly, and include all required clauses for things like confidentiality, intellectual property, and termination procedures. No legal guesswork on your end.

How does payroll and taxation work?

Your €60,000 employee actually costs €73,800 per year in Singapore. The 23% markup comes from employer contributions that many companies forget to budget for.

Singapore's tax system is relatively straightforward compared to other countries, but the employer contributions can catch you off guard if you're not prepared. The good news? Tax rates are reasonable and there's no capital gains tax for most employees.

Tax brackets and rates

Singapore uses a progressive tax system with rates that won't shock your European sensibilities:

The effective tax rate for a €60,000 salary (roughly SGD $90,000) works out to about 8.5%. Not bad at all.

Employer contributions breakdown

Here's where the real costs hit. Singapore's Central Provident Fund (CPF) is the main social security system, and both you and your employee contribute:

There's also a Skills Development Levy of 0.25% of payroll (capped at SGD $11.25 per employee per month). It's small but required.

Foreign employees on Employment Passes aren't required to contribute to CPF, but many companies offer equivalent benefits to stay competitive.

Payment schedule and bonuses

Singapore follows a monthly payroll cycle. Employees expect payment by the 7th of the following month, though many companies pay earlier.

The 13th month bonus isn't legally required, but it's so common that employees expect it. Most companies pay it in December, though some split it between mid-year and year-end.

Annual wage supplements (AWS) are contractual, not legal requirements. But if you promise them in the employment contract, you're legally bound to pay them.

Total employment cost example

Let's break down what that €60,000 salary actually costs you:

For a local Singapore employee (age 35):

• Base salary: €60,000
• Employer CPF (17%): €10,200
• Skills Development Levy: €135
• Total annual cost: €70,335

For a foreign employee on Employment Pass:

• Base salary: €60,000
• Skills Development Levy: €135
• Additional benefits to match CPF value: €10,200
• Total annual cost: €70,335

You're looking at about 17% on top of base salary for mandatory contributions, plus whatever additional benefits you offer to stay competitive.

Payroll cycle and deadlines

Singapore's payroll calendar is pretty forgiving compared to other countries. Here's what you need to know:

Monthly obligations:

• Pay employees by 7th of following month
• Submit CPF contributions by 14th of following month
• File Skills Development Levy quarterly

Annual obligations:

• IR8A forms (employee income statements) by March 1st
• Corporate tax filing by November 30th (if calendar year-end)
• Auto-inclusion scheme for employee tax filing (most employees don't file individually)

Miss the CPF deadline and you'll pay 1.5% interest per month on outstanding amounts. The Skills Development Levy carries a 5% penalty if you're late.

Common payroll mistakes

The biggest mistake? Assuming all employees need CPF contributions. Employment Pass holders are exempt, but Work Permit holders aren't. Get this wrong and you'll owe back-contributions with interest.

Another common error is miscalculating the CPF ceiling. Contributions cap at SGD $6,000 monthly salary (SGD $72,000 annually). Pay someone SGD $10,000 per month and you still only contribute CPF on SGD $6,000 of it.

Companies also forget about the foreign worker levy for Work Permit holders. It ranges from SGD $370 to SGD $800 per month depending on the sector and dependency ratio. That's an additional cost on top of salary and CPF.

Setting up payroll in Singapore yourself:

• Local accounting firm: €800-1,200/month
• Payroll software: €150-300/month
• Compliance risk: Fines up to €15,000 for CPF errors
• HR expertise needed: €55k+ salary

With Hire with Columbus: $179/month per employee, fully compliant, zero risk. We handle CPF calculations, tax filings, and all the regulatory deadlines so you can focus on growing your team instead of wrestling with Singapore's payroll requirements.

What benefits and leave are required?

Singapore employees get 14 days minimum annual leave after one year of service, plus 14 days of sick leave that don't require a doctor's note. You'll also pay into the Central Provident Fund (CPF) at rates up to 17% of salary, making benefits a significant part of your employment costs.

Here's what you're legally required to provide and what it'll cost you.

Annual leave

Singapore's Annual Leave Act guarantees employees vacation time based on their length of service. New employees earn one day of leave for every month worked in their first year, capping at 7 days. After completing one year, they get the full 14 days annually.

Employees can carry over up to 7 days of unused leave to the next year, but anything beyond that is use-it-or-lose-it unless you pay it out. When someone leaves, you must pay for all unused vacation days at their current salary rate.

Some companies offer more generous leave policies - 18-21 days is common for senior roles or multinational companies competing for talent.

Sick leave

Employees get 14 days of paid sick leave annually for outpatient treatment, plus an additional 60 days for hospitalization. No doctor's certificate needed for the first 3 days, but after that, you can require medical certification.

You pay the full salary during sick leave - there's no social insurance system that reimburses you like in European countries. This makes sick leave administration straightforward but puts the full cost burden on employers.

Unused sick leave doesn't carry over to the next year and isn't paid out when employees leave.

Parental leave

Maternity leave: 16 weeks at full pay, with the first 4 weeks mandatory before or after birth. Mothers can take the remaining 12 weeks flexibly within the first year of the child's life.

Paternity leave: 2 weeks at full pay, which must be taken within 16 weeks of the child's birth.

Adoption leave: 12 weeks for the primary caregiver and 2 weeks for the secondary caregiver when adopting children under 12 months old.

Childcare leave: Parents get 6 days annually per child under 7 years old. This is unpaid leave, but many companies pay it as a competitive benefit.

The government reimburses employers for the first 4 weeks of maternity leave and 2 weeks of paternity leave through the Child Development Co-Savings scheme, reducing your direct costs.

Public holidays 2025

Singapore has 11 public holidays in 2025. If employees work on these days, you must pay double their normal daily rate or provide a substitute day off.

Central Provident Fund (CPF)

CPF is Singapore's mandatory retirement savings system. Both you and your employees contribute based on the employee's age and salary, with contributions capped at S$6,800 monthly salary (S$81,600 annually).

2025 CPF contribution rates:

CPF contributions are due by the 14th of each month for the previous month's wages. Late payments incur a 17% annual interest penalty, so don't miss these deadlines.

Skills Development Levy (SDL)

You'll pay 0.25% of each employee's monthly salary (capped at S$11.25 per employee per month) to fund Singapore's skills development programs. This applies to all employees earning more than S$750 monthly.

Work Injury Compensation insurance

Mandatory insurance covering workplace injuries and occupational diseases. Premiums vary by industry risk level - expect S$100-500 annually per employee for office workers, more for manufacturing or construction roles.

Optional competitive benefits

Health insurance: Not legally required, but most companies provide medical coverage beyond the basic CPF MediSave account. Group health plans typically cost S$500-2,000 per employee annually.

Dental and vision: Common add-ons to health packages.

Performance bonuses: The 13th-month bonus (Annual Wage Supplement) is customary but not legally mandated. Many companies also pay variable bonuses based on performance.

Flexible work arrangements: Remote work options, flexible hours, or compressed work weeks are increasingly expected, especially post-COVID.

Professional development: Training budgets, conference attendance, or certification reimbursements help with talent retention.

Common benefit mistakes

Missing CPF deadlines: The 17% annual penalty on late CPF contributions adds up quickly. A S$5,000 salary paid one month late costs you an extra S$144 in penalties.

Incorrect CPF calculations: Using gross salary instead of ordinary wages, or miscalculating rates for older employees. The CPF Board audits regularly and back-payments with penalties are expensive.

Forgetting SDL: Small amount per employee, but penalties apply and it's easy to overlook when setting up payroll.

Mishandling leave carryover: Allowing employees to accumulate more than 7 days of annual leave without clear policies on payout creates unexpected costs when they leave.

No work injury insurance: This is mandatory from day one of employment. Operating without coverage can result in personal liability for workplace accidents.

Administering these benefits correctly requires local HR expertise (S$60,000+ annual salary), payroll software (S$200-500/month), and ongoing compliance monitoring. Hire with Columbus handles all benefit administration and compliance for $179/month per employee, including CPF submissions, leave tracking, and insurance management.

What are the compliance requirements?

Written contracts are mandatory in Singapore within 14 days of employment start. Miss this deadline and you're looking at potential fines plus employees can claim their terms weren't properly established.

Invalid employment contracts can void the entire agreement, forcing you to pay back wages under Singapore's default terms. Get the termination process wrong? You'll face reinstatement orders plus compensation that often exceeds what you'd have paid doing it right the first time.

Employment contract requirements

Every employment contract in Singapore must be in writing and include specific mandatory clauses. You can't wing this with a basic template from Google.

Required elements include:

• Job title and duties
• Start date and work location
• Salary and payment frequency
• Working hours and rest days
• Annual leave entitlement
• Notice periods for termination
• Probation period (if applicable)

The contract must be provided within 14 days of employment start. Both parties need signed copies, and you'll want to keep these for at least two years after employment ends.

Probation periods

Standard probation in Singapore runs 3-6 months, with a maximum of 6 months allowed by law. During probation, either party can terminate with one day's notice or payment in lieu.

After probation ends, full employment protections kick in immediately. That means longer notice periods, potential severance obligations, and much stricter termination requirements.

Most companies use 3 months for junior roles and 6 months for senior positions. You can't extend probation once it's set in the contract.

Working time regulations

Singapore caps normal working hours at 44 hours per week. Overtime kicks in after 44 hours and must be paid at 1.5x the hourly rate.

Key rules to follow:

• Maximum 72 hours per week including overtime
• At least one rest day per week (can be any day)
• 30-minute meal break for shifts over 6 hours
• Keep detailed records of all working hours

Break working time limits and you'll face fines up to S$5,000 for first offenses. Repeat violations double the penalty.

Notice periods

Notice requirements depend on length of service and who's initiating the termination:

During probation, both sides only need one day's notice regardless of tenure. Payment in lieu of notice is allowed if specified in the contract.

Termination process

You can terminate for cause (misconduct, poor performance) or without cause (redundancy, restructuring). The process changes quite a bit between the two.

For misconduct terminations:

• Conduct proper investigation
• Give employee chance to respond
• Document everything thoroughly
• Provide written termination notice

For redundancy or restructuring:

• Genuine business reasons required
• Consider redeployment options first
• Follow proper consultation process
• Pay required notice and severance

Wrongful dismissal claims can result in compensation up to 24 months' salary plus legal costs. Get this wrong and you're looking at S$50,000+ in total costs for senior roles.

Severance pay requirements

Severance isn't always required, but when it is, the amounts add up quickly:

Severance is required for redundancy but not for misconduct dismissals. The calculation uses the employee's last drawn salary including allowances.

Data protection compliance

Singapore follows the Personal Data Protection Act (PDPA) with penalties up to S$1 million for serious breaches. Employee data handling requires explicit consent and proper security measures.

Key obligations include:

• Obtain consent before collecting personal data
• Use data only for stated purposes
• Implement reasonable security measures
• Allow employees to access their data
• Report breaches within 72 hours

HR systems must comply with PDPA requirements. Cloud storage needs to meet Singapore's data residency rules.

Common compliance mistakes

Invalid contract clauses top the list of expensive errors. Singapore courts will void unfair terms and default to employee-favorable interpretations.

Frequent mistakes include:

• Missing mandatory contract clauses
• Incorrect notice period calculations
• Improper termination procedures
• Inadequate working time records
• Non-compliant data handling

Each mistake compounds. A wrongful dismissal case with invalid contract terms can easily exceed S$100,000 in total costs.

Penalties for violations

Employment law violations in Singapore come with serious financial consequences:

• Invalid employment contract: Up to S$5,000 fine plus potential back payments
• Wrongful termination: 1-24 months compensation plus reinstatement
• Working time violations: S$5,000 first offense, S$10,000 repeat
• Salary payment delays: S$3,000 plus interest on unpaid amounts
• Data protection breaches: Up to S$1 million depending on severity

Legal fees add another S$20,000-50,000 for contested cases. Most companies settle rather than fight, but settlements still run S$30,000+ for senior roles.

Hire with Columbus handles all Singapore employment compliance automatically. Our legal team ensures every contract includes mandatory clauses, manages proper termination procedures, and maintains compliant HR records. At $179/month per employee, it's a fraction of what one compliance mistake costs.

What has changed recently?

Singapore's employment rules got a major overhaul in 2025, with several updates that directly impact how you hire and manage employees.

The Ministry of Manpower bumped up the Local Qualifying Salary (LQS) to S$1,600 per month in January 2025, up from S$1,400. This affects your Employment Pass applications since you need to show that Singaporean employees in similar roles earn at least this amount. If you're hiring foreign talent, expect more scrutiny on salary benchmarking.

Work Pass changes hit hard this year. The Employment Pass minimum salary jumped to S$5,600 monthly (from S$5,000), and the Complementarity Assessment became mandatory for all EP applications, not just renewals. You'll now need to prove you've genuinely tried to hire locally before bringing in foreign workers. The assessment covers job advertising requirements, local candidate consideration, and skills transfer plans.

New workplace flexibility rules took effect in December 2024 but really started impacting hiring in 2025. Employees can now formally request flexible work arrangements after six months of employment, and you must provide written reasons if you reject the request. Many companies are building flexibility clauses into employment contracts from day one to stay competitive.

The Progressive Wage Model expanded to more sectors in 2025, now covering retail, food services, and waste management. If you're hiring in these industries, you'll need to follow specific wage progression requirements and provide mandatory training pathways.

CPF contribution rates stayed stable at 37% total (20% employer, 17% employee) for most workers, but the CPF salary ceiling increased to S$6,800 per month in January 2025. This means higher CPF contributions for your senior hires.

Singapore also tightened its anti-discrimination framework in 2025. The Tripartite Guidelines on Fair Employment Practices now include stronger provisions against age discrimination, and the Ministry of Manpower started conducting more workplace audits. Companies with poor diversity metrics face longer work pass processing times.

The good news? Singapore launched a new digital platform for employment contract registration in mid-2025, making the paperwork process much smoother. Most employment-related government submissions now happen through a single portal, cutting administrative time by about 30%.

If you're using an EOR like Hire with Columbus, these changes are largely handled for you. We monitor regulatory updates and adjust payroll, compliance, and work pass applications automatically. But if you're setting up your own entity, you'll need to stay on top of these evolving requirements yourself.