Table of Contents

Singapore

Table of Contents

Currency

Singapore Dollar (SGD)

Payroll Frequency

Monthly

Employer Taxes

17.25% + varying tax

About Singapore

When naming countries that have enjoyed economic success, one cannot leave out Singapore. After separating from Malaysia over ideological differences in 1965, Singapore experienced rapid economic growth which was attributed to its workforce and external trade. Such changes have made the country a global hub of entertainment, education, manufacturing, healthcare, tourism, innovation, technology, as well as logistics. This has been attributed to good leadership, good economic policies, and a peaceful political environment. Singapore has thus experienced a tremendous transformation to become an economic hub in the globe. With a population of fewer than six million people, the unemployment rate in Singapore is 2.02%, making it one of the lowest in the world. Such low rates have been the result of economic success experienced by the country since becoming a sovereign state in 1965. In Singapore, culture is shaped by the language spoken by different segments of the population. English speakers tend towards the western culture like the country’s education system and holidays. The Chinese speakers prefer Chinese culture like the practice of the Taoism religion. On the other hand, the Malay speakers as expected, lean towards Malay culture. The Malay culture in Singapore includes the practice of Islam, attending religious schools called Madrasahs, and the ability to speak Javanese. Despite these differences, Singaporeans understand that racial and religious harmony is crucial in determining the success of their country. With the country’s current political climate relatively stable, there is little doubt that Singapore will continue to flourish in the global world.

Employment Relationship

• Permanent Employment

Singapore's labor law defines permanent employment as regular and continual employment that lasts for more than 14 days. Permanent employment is generally reserved for employees directly engaged in work on behalf of a company or organization. Permanent employment contracts must include certain essential terms, such as hours of work and the notice period.

• Fixed-Term or Specific-Purpose Contracts

The Employment Act of Singapore defines a fixed-term contract as a contract that terminates upon the expiry of a particular term unless it is renewed. Although the law does not specify the maximum term of such employment, all fixed-term contracts of service of 14 days or more will be treated as continuous service for benefits purposes if renewed within 1 month from the end date of the previous contract. The law does not specify limitations regarding the type of work for fixed-term employees. Fixed-term employees are entitled to annual leave, sick leave, maternity leave, paternity leave, adoption leave, and child care leave based on the cumulative length of their continuous service if they meet a minimum service period of 3 months without a break in service.

• Temporary Employment Contratcs

The Employment Act of Singapore does not provide specific regulations for temporary employees. The Act's provisions cover all employees, whether they are temporary employees, contract employees, employees with tenured employment, or daily-rated employees. There are no legal provisions regarding the length of time or the situations in which temporary employment contracts can be used.

Probationary Period

The Employment Act of Singapore does not contain provisions that regulate the length of probationary periods for employees. Probationary periods are governed by the terms of the employment contract or collective bargaining agreement. However, the existence and length of a probationary period, as well as the notice policy of the employer, are considered key employment terms that must be given to the employee in writing no more than 14 days after the start of employment.  Either employer or employee can terminate the employment at the end of the probation period by giving notice or paying compensation in lieu of. 

Working Hours

Generally, an employee's service contract shall not require them to work more than 6 consecutive hours without a break, more than 8 hours in a day, or more than 44 hours in one week. Some exceptions to this general rule are listed in the paragraphs below. An employee engaged in work that must be carried on continuously can be required to work for 8 consecutive hours. However, the workday must include a period or periods of not less than 45 minutes in total, during which the employee shall have the opportunity to have a meal. Also, if there are fewer than 8 hours of work on 1 or more days of the week, the limit of 8 hours in 1 day may be exceeded during the remaining days of the week. Still, no employee shall be required to work for more than 9 hours in a day or more than 44 hours per week.

Holidays / PTO

• Statutory Holidays

New Year’s Day (January 1st); Chinese New Year – first day (Days movable); Chinese New Year – second day (Days movable); Hari Raya Puasa (Days movable); Hari Raya Haji (Days movable); Good Friday (Days movable); Labor Day (May 1st); Vesak Day (Days movable); National Day (August 9th); Deepavali (Days movable); Christmas Day (December 25th)

• Paid Annual Leave

According to Singapore's Employment Act, an employee is entitled to paid annual leave if they have worked for at least 3 months with the employer. The Employment Act does not detail any other procedure for requesting annual leave beyond seeking the employer's approval before taking the leave. The length of the annual leave depends on an employee's years of service, starting from the first day of work with the employer. Eligibility for leave is as follows: 7 days the 1st year of service 8 days the 2nd year of service 9 days the 3rd year of service 10 days the 4th year of service 11 days the 5th year of service 12 days the 6th year of service 13 days the 7th year of service 14 days the 8th year and thereafter

• Sick Leave

According to Singapore's Employment Act, an employee is entitled to paid sick leave if: The employee has worked at least 3 months for the employer. The employee has informed or tried to notify the employer within 48 hours of their absence. The sick leave has been certified by the company's doctor, a company-approved doctor, or a government doctor (doctors from approved public medical institutions are included). The length of sick leave is calculated based on an employee's length of service. An employee whose length of service is longer than 6 months can take up to 14 days for outpatient non-hospitalization leave and 60 days for hospitalization leave, which includes the 14 days of outpatient sick leave. Sick leave is prorated for employees who have less than 6 months of service.

• Maternity Leave

Under the Employment Act, every female employee is entitled to take maternity leave beginning 4 weeks before the expected delivery and for 8 weeks after delivery. This 12-week minimum maternity leave must be paid by the employer and is available to employees who are not covered under the Child Development Co-Savings Act. The Child Development Co-Savings Act grants 16 weeks of partially government-paid maternity leave to employees who meet the following criteria: The child is a Singaporean citizen. The employee is lawfully married to her child's father. The employee has worked for her employer or has been self-employed for at least three continuous months before her child's birth. An employee can take her maternity leave either at once or spread out over 12 months. The employee should reach an agreement with the employer on how her maternity leave is to be split before taking the leave. The employee must take the first 8 weeks in one block and can take the last 8 weeks flexibly. Employees are also eligible for adoption leave if they adopt a child under 12 months of age.

• Paternity Leave

According to the Ministry of Manpower in Singapore, a working father is entitled to 2 weeks of paternity leave for all births if he meets the following requirements: The child is a Singaporean citizen. The employee is or had been married to the child's mother between conception and birth. Such conditions are not applicable for adoptive fathers who intend to adopt on or after January 1, 2017. The employee has worked for his employer or has been self-employed for at least three continuous months before the child's birth. Two weeks of paternity leave is based on an employee's number of working days in a week. The government pays the compensation for paternity leave, with wage reimbursement capped at SGD 2,500 (Singapore dollars) per week. From January 1, 2024, employees will be eligible to 4 weeks' paternity leave, to be taken within 12 months from child’s date of birth. The additional 2 weeks of leave are subjected to employer’s agreement. The leave can also be taken as one continuous block within the first 16 weeks from childbirth. The government pays the compensation for paternity leave for all 4 weeks, with wage reimbursement capped at SGD 2,500 per week.  

Termination of Employment

• Notice Period

Singapore's labor law requires a contracting party to give notice to the other party in writing to terminate the employment contract. This notice can be in the form of a termination letter or resignation letter. The length of notice must be the date indicated in the contract or the length agreed to in the verbal agreement if no written contract exists. All employees, including those on a fixed-term contract, can resign at any time, as long as they serve the required notice stated in their contract, or make payment in lieu of notice. If no notice period has been agreed to in the contract, the notice should be based on the employee's length of service as follows: Less than 26 weeks: 1 day Between 26 weeks and less than 2 years: 1 week Between 2 years and less than 5 years: 2 weeks Between 5 years and above: 4 weeks Both parties can also agree to waive the notice period by mutual consent. Such a waiver should be concluded in writing.

• Severance Benefits

Singapore’s Employment Act does not require employers to pay severance. However, an employer must give all eligible employees notice or payment in lieu of notice and pay all unused annual leave on the last day of work. The Ministry of Manpower requires employers to compensate their employees in case of retrenchment. The amount of retrenchment benefit depends on what is provided for in the employment contract or collective agreement (for unionized companies). If there is no provision, it will have to be negotiated between the employees (or their union) and the employer. The prevailing norm is to pay a retrenchment benefit of between 2 weeks to 1-month salary per year of service, depending on the company’s financial position and the industry.