Overview

Capital
Singapore
Currency
Singapore Dollar
Date Format
dd/mm/yyyy

Taxes

Employer
Up to 17% - CPF (Pension)
Up to 0.25% - Skills Development Levy (SDL)
Employee
0.00% - Up to 20,000
2.00% - 20,000 - 30, 000
3.50% - 30,000 - 40,000
7.00% - 40,000 - 80,000
11.50% - 80,000 - 120,000
15.00% - 120,000 - 160,000
17.00% - 160,000 - 200,000
18.00% - 200,000 - 320,000
20.00% - Over 320,000

Minimum Wage

General

Singapore does not have a minimum wage policy, however, there are a few exceptions (i.e. cleaners, food and beverage servers).

Working Hours

General

If an employee works a 5-day work week, a workday is up to 9 hours a day or 44 hours a week. 

If an employee works a 6-day work week the workday is up to 8 hours. 

Overtime

For employees who are covered by the Employment Act, an employee must be paid 1.5 times the hourly basic pay of rate for any overtime hours.

VAT

General

7% standard rate.

Mandatory Benefits

Pension Fund

Employees contribute 20% of their wages, and Employers contribute 17% of their employees’ wages. Contributions are capped at 1,020 SGD for the employer and 1,200 SGD for the employee.  In addition, if the employee’s salary is commission based, other pension contributions may apply

Contributions are not made for foreign employees on either a work permit or employment pass.

Social Security

The Central Provident Fund (CPF) is Singapore’s comprehensive social security and it covers:

  • Retirement
  • Healthcare
Health Insurance

Under the CPF, there are 4 distinct healthcare schemes.

  • MediSave – national scheme for future personal or family hospitalization.
  • MediShield Life – scheme for expensive hospital bills and outpatient treatments.
  • Private Medical Insurance Scheme – allows for members to us MediSave to purchase Integrated Shield Plan for added insurance for themselves and their dependents.
  • ElderShield – Severe disability scheme for long term care. Usually used for the elderly.
Additional Benefits

The Skills Development Levy (SDL) is collected from employers to support workforce upgrading programs and training grants under the National Continuing Education Training System. Contributions to SDL are expected to be provided to all workers at a levy rate of 0.25% of each employee’s total monthly wages up to the first $4,500 or a minimum of $2 (for total wages of $800 or less) whichever is higher.

Payroll

Payroll Cycle

Salaries must be paid within 7 days from the end of the salary period.    

Termination

Termination Process

Employers and employees are legally required to a termination letter. Employers have the responsibility of holding an expatriate employee his due monies; Prorated salary, bonus, unused vacation days, approved expenses for that month and an air ticket unless employee agrees otherwise in writing. One month prior to the termination date, the employer is required to file the IR21 Tax form (for expats only). If Employees’ taxes are born by their employer, the employer makes the payment to the tax authorities on behalf of the employee. In the case where the employee wishes to bear the tax expenses himself, employer is entitled to deduct the tax amount from the employee’s salary and pay the tax expenses on his behalf before releasing his final salary.
The employer now bears the responsibility of cancelling the employment pass granted to the employee one week afterhe employment termination. Instead, a short-term visit pass will be granted if the employee is still in Singapore and is valid for 30 days but does not grant the option to work. A copy of the cancellation acknowledgement needs to be provided to the employee to ensure departure. Failure of following the regulations set by the ministry of Manpower will result in either a late filing fee, lawsuit, or exposing the employee to the risk of an outstanding tax payment. 

If the termination is due to misconduct, the employee must go through a process of inquiry before any action is taken. 

Advance Notice

The notice period in Singapore is:

  • 1 days’ notice for less than 26 weeks of employment
  • 1 weeks’ notice for employees who have been employed more than 26 weeks and less than 2 years
  • 2 weeks’ notice for employment of more than 2 years and less than 5 years
  • 4 weeks’ notice for over 5 years of employment
Severance Pay

The severance payment includes all the salaries and benefits due at the last day of employment. If the employee has been employed for at least 2 years, they are entitled to receive “retrenchment benefits”. The amount given to the employee depends on what is agreed upon in the employment contract or collective agreement when applicable. 

In general, retrenchment benefits are usually between 2 weeks to one month for every year the employee has served at the company.