Singapore Payroll and Benefits Benchmark guide

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

Employees are entitled to minimum of 7 days of annual leave after working in a company for three consecutive months. Afterwards one additional day is added per each year until reaching 14 days at the 8^th year. 

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer.

0-3 Months: 5 non-hospitalized/15 hospitalized days

4th Month: 8 non-hospitalized/30 hospitalized days

5th Month: 11 non-hospitalized/45 hospitalized days

After 6 Months: 14 days non-hospitalized/60 hospitalized days

The employee must inform their employer within 48 hours of inability to work and must provide a medical certificate upon return. 

Paid maternity leave of 16 weeks is provided to female employees employed for more than 3 months and the child is a Singaporean citizen. During this period, employers are prohibited from terminating employee.

The woman must inform their employer of their maternity leave at least a week in advance and inform of the delivery of the child.  Otherwise, the employee is only entitled to half of the payment during the maternity leave. 

For the first and second child, the first 8 weeks are paid by the employer and can claim reimbursement from the government to cover the last 8 weeks of leave.  For the third or any child after, all 16 weeks of maternity leave can be requested to be reimbursed by the employer.

If the child is not a Singapore citizen, maternity leave is 12 weeks.   

Paternity leave in Singapore is 2 weeks. 

To meet the requirements of Government-paid Paternity Leave (GPPL), the child must be a Singapore citizen and the father has or was legally married to the mother between the conception and birth of the child.  In the case the the child is adopted, the father is also eligible for paternity leave if the child is a Singapore citizen. 

Parents are entitled to 2 days paid childcare leave yearly for children under four. Additional parental leave is available to parents of a Singaporean citizen.

Work related injury leave: The employer covers all work-related injuries that an employee has suffered either directly or through insurances. The employee should receive 100% of their average monthly earnings in the 12 months prior to the disability for 14 days if not hospitalized. After 14 days they shall receive 66.7%.

As of September 1, 2020, all work-related medical leave must be reported to the Ministry of Manpower. 

There are 11 public holidays. If a public holiday falls on a non-working day, the employee should either receive a day’s salary in lieu of the holiday or an extra day off. If the holiday falls on a rest day, the upcoming workday will be a paid public holiday. 

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. 

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.

7% standard rate.

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.

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

• Retirement
• Healthcare

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.

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.

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

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. 

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

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.