Singapore

Registrations and Establishing an Entity

To operate in Singapore and employ staff, a legal business entity must be registered with the Accounting and Corporate Regulatory Authority (ACRA). The process is efficient and fully digital, usually completed within 1–3 working days.

Business structures include:

• Private Limited Company (Pte Ltd)
• Limited Liability Partnership (LLP)
• Sole Proprietorship

A registered local address and at least one resident director are required. Foreign companies may set up a branch office or a subsidiary. Corporate bank accounts are mandatory for payroll and statutory payments.

Working Week

The standard working hours in Singapore are:

• Up to 44 hours per week
• 8 hours per day, 5.5 days per week, or
• 9 hours per day, 5 days per week

Employees are entitled to one rest day per week. Overtime is payable at 1.5 times the hourly basic rate for eligible employees (under Part IV of the Employment Act).

Employment contracts must state key terms such as job title, hours of work, salary, leave entitlement, and termination notice period.

Income Tax

Personal income tax in Singapore is progressive, ranging from 0% to 24%. Tax residency depends on the number of days the individual stays in Singapore in a calendar year:

• ≥183 days: tax resident
• <183 days: non-resident (flat tax of 15% or resident rates, whichever higher)

Employers are required to withhold tax for non-resident employees under the IR21 clearance process.
The tax year runs from 1 January to 31 December. Taxes are assessed and filed the following year.

Social Security – Central Provident Fund (CPF)

CPF is mandatory for Singapore citizens and Permanent Residents. Foreign employees are not required to contribute to CPF.

Rates (2024):

• Employee CPF: up to 20% of salary
• Employer CPF: up to 17% of salary
• Contributions are subject to monthly wage ceilings and age bands

CPF covers retirement, healthcare, and housing needs. Employers must make monthly CPF payments via the CPF Board’s portal.

Payroll Process

Payroll is processed monthly. Employees must receive:

• Itemized payslips
• Payment via bank transfer
• Salary by the 7th day after the end of the salary period

Payslips must detail:

• Basic salary
• Overtime
• Allowances
• Deductions
• CPF contributions (if applicable)

Employers must submit monthly:

• CPF contributions
• Skills Development Levy (SDL)
• Foreign Worker Levy (if applicable)

Annual reporting includes filing:

• Form IR8A (and Appendix 8A/8B/IR8S if applicable) by 1 March
• Form IR21 for tax clearance of foreign employees (before termination or departure)

New Employees

Employers must verify employee identity, qualifications, and work eligibility. Required documents:

• NRIC (for locals)
• Work Pass or S Pass/Employment Pass (for foreigners)
• Bank details
• Tax residency status
• CPF declaration (if applicable)

Work Pass holders must be registered with MOM (Ministry of Manpower) within 14 days of arrival.

Leavers

Final salary must include unused leave and any other due payments. Termination must comply with contractual notice periods.

Tax Clearance (Form IR21) is required at least 1 month before a foreign employee ceases employment or leaves Singapore. Employers must withhold final salary until IR21 clearance is granted.

Minimum Wage

There is no universal minimum wage in Singapore. Sectoral wage floors exist for:

• Cleaners
• Security officers
• Landscape workers

These are governed under the Progressive Wage Model (PWM).

Annual Leave

• Minimum 7 days after 1 year of service, increasing by 1 day per year, up to 14 days
• Public holidays: 11 paid days annually

Bonuses & Allowances

• 13th month (Annual Wage Supplement) is customary but not mandatory
• Medical insurance is compulsory for Work Permit and S Pass holders
• Other common benefits: transport, housing, mobile allowance
  
  

Foreigners require a valid work pass to be employed in Singapore. Common types include:

• Employment Pass (EP): For professionals earning ≥SGD 5,000/month
• S Pass: For mid-skilled workers earning ≥SGD 3,150/month
• Work Permit: For semi-skilled workers (e.g., construction, manufacturing)

Applications are submitted through MOM. Passes are typically valid for 1–2 years and renewable.

Employers must:

• Conduct a Fair Consideration Framework job posting (for EP/S Pass)
• Pay foreign worker levies
• Provide medical insurance
• Submit and renew passes via MOM portal

• The Singapore Labour Law applies only partially to managers and executives earning above SGD 4,500/month
• CPF contributions apply only to citizens and PRs, not foreigners
• Most payroll and tax filings are submitted via IRAS and CPF Board e-portals
• Penalties apply for late CPF, SDL, or tax filings
• Salary, bonus, and leave benefits are not legally mandated for high-earning executives
• Public holidays vary annually but generally include New Year, Chinese New Year, Good Friday, Labour Day, Hari Raya, Deepavali, National Day, and Christmas
  
  

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Further Information

For more information, or assistance with Singapore tax enquiries please contact: gi@activpayroll.com

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About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.