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Hiring in Singapore
Employee background checks in Singapore
Hiring employees and other types of workers in Singapore
Language used in Singapore
Payroll processing in Singapore
Easily hire employees in Singapore and beyond with CXC
Employer of record in Singapore
Expanding your business into Singapore can be an exciting venture. However, navigating the complexities of employment regulations and workforce management can be a daunting task. This is where working with an Employer of Record (EoR) in Singapore comes into play. An EoR is a third-party organisationo that legally employs workers on behalf of another company. EoR takes care of employment responsibilities such as payroll and taxes, benefits, and compliance, enabling companies to focus on their core operations while ensuring compliance with local laws.
Let’s explore the key factors to consider when choosing an EoR and why partnering with CXC, a trusted EoR provider, can simplify your expansion journey.
Compliance with local regulations
An EoR must adhere to the stringent legal and regulatory framework in Singapore. While there may not be a specific “EoR license,” companies offering employer of record services in Singapore are required to comply with several key areas:
- Company registration: Businesses must be registered with the Accounting and Corporate Regulatory Authority (ACRA). This ensures the company operates legally within Singapore.
- Labour laws compliance: Employment in Singapore is governed by the Employment Act and the Central Provident Fund Act. These laws regulate working hours, wages, benefits, and termination procedures.
- Social security contributions: Employers must contribute to the Central Provident Fund (CPF), a mandatory savings scheme for Singaporean and permanent resident employees.
- Tax compliance: Employers are responsible for withholding and remitting employee income taxes to the Inland Revenue Authority of Singapore (IRAS).
- Work permits: If hiring foreign workers, obtaining the necessary work permits is a must, as per Singapore’s immigration policies.
- Data protection compliance: Organisations must comply with the Personal Data Protection Act (PDPA) when handling employee information.
- Employment agency license: If the EoR also provides recruitment or placement services, an Employment Agency License from the Ministry of Manpower (MOM) may be required.
Choosing an EoR with a proven track record in regulatory compliance ensures that your business remains protected from legal and financial risks.
Expertise in workforce management
A reliable EoR vendor in Singapore should have extensive experience managing payroll, benefits administration, and employment contracts. This expertise ensures smooth operations and minimises administrative burdens for your team.
Scalability and flexibility
As your business grows, your EoR should be able to accommodate your changing workforce needs. Look for an EoR agency in Singapore that offers scalable solutions, whether you need to onboard one employee or manage a larger team.
Local market knowledge
Understanding Singapore’s cultural and economic landscape is crucial for effective workforce management. An EoR with local insights can help you navigate challenges and maximise opportunities in the Singaporean market.
Hiring in Singapore
Navigating the hiring process in Singapore involves understanding employment laws, crafting compliant contracts, and implementing effective workforce strategies. Whether you’re working directly or through an employer of record in Singapore, prioritising employee well-being and cultural inclusivity will set your business up for success.
Employment laws in Singapore
Singapore’s employment regulations are primarily governed by the Employment Act (EA). This statute defines the rights and obligations of employers and employees, ensuring fairness in the workplace. Key highlights include:
- Coverage: The EA applies to most employees in Singapore, excluding seafarers, domestic workers, and certain government employees. It provides additional protections for "Part IV EA Employees," including limits on working hours and overtime pay.
- Labour relations: Employers must adhere to prescribed terms and conditions in the EA, which protect employees from unfair treatment.
- Hiring foreign workers: For companies hiring foreign workers in Singapore, compliance with work pass regulations is mandatory. Employers need to secure the appropriate work passes through the Ministry of Manpower (MOM) and meet the advertising requirements for certain roles.
Hiring practices in Singapore
In terms of employment contracts, all employers in Singapore must provide written employment contracts outlining the terms of engagement. Here’s what you need to know:
- Key employment terms (KETs): Employers must issue KETs to employees hired for 14 days or more. These should be provided within 14 days from the start of employment and can be delivered in hard or soft copy.
- Probation periods: Although the EA does not specify probationary periods, they are a common practice. Typically, probation lasts between 3 to 6 months, allowing employers to evaluate performance before confirming permanent roles.
- Customary terms: Employment contracts must meet at least the minimum standards set by the EA. Additionally, certain terms may be implied by law or workplace customs.
- Independent contractors: While businesses can engage independent contractors, the MOM evaluates the actual working relationship to prevent misclassification. Simply labelling a worker as a contractor is insufficient.
- Agency workers: These individuals are often hired through employment agencies. Agency workers must be Singapore citizens or permanent residents, and their contractual terms should comply with the Employment Act.
Employment benefits in Singapore
Providing competitive employment benefits is essential to attract and retain top talent. Key benefits include:
- Central Provident Fund (CPF): Employers must contribute to CPF accounts for Singaporean and permanent resident employees. These contributions support retirement, healthcare, and housing needs.
- Leave entitlements: Employees are entitled to paid annual leave, sick leave, and parental leave as per statutory requirements.
- Medical coverage: Offering comprehensive health benefits, including insurance and wellness programs, is a widespread practice.
- Bonuses: Performance-based bonuses and annual payouts are often used to reward and motivate employees.
Cultural considerations in Singapore
Singapore’s multicultural environment requires employers to be mindful of cultural nuances:
- Diversity: The workforce comprises individuals from various ethnic and religious backgrounds.Respect for different customs and practices is essential.
- Communication: While English is the primary business language, being sensitive to cultural differences in communication styles can improve workplace harmony.
- Work-life balance: Singaporeans value work-life balance, and companies offering flexible arrangements are often viewed favourably.
Employee background checks in Singapore
Conducting background checks in Singapore is an essential step in making informed hiring decisions. From verifying immigration status to performing criminal background checks, employers must ensure that their processes comply with the Singapore background check laws and PDPA requirements.
Whether you’re performing an employment background check in Singapore or navigating complex regulations, understanding your obligations as an employer is key to a smooth and compliant hiring process.
Singapore’s background check law
Employers are allowed to conduct background checks on job candidates, but these checks must comply with the Singapore Personal Data Protection Act 2012 (PDPA). Under the PDPA, employers must inform candidates about the collection, use, and disclosure of their personal data and obtain their consent.
Key points under the PDPA:
- Notification and consent: Employers must notify applicants of the purpose of collecting their personal data and obtain their consent.
- Exceptions: Employers may bypass consent if the information is publicly available or collected for evaluative purposes, such as determining an applicant’s suitability for a role.
- NRIC collection: While there is no requirement to request National Registration Identity Card (NRIC) details during job applications, employers may need this information later to determine work pass requirements.
Pre-employment checks that involve sensitive personal data must be handled carefully to ensure compliance with the PDPA. Failing to comply could result in penalties and reputational damage for employers.
Right to work in Singapore
Employers must verify a candidate’s right to work in Singapore, particularly when hiring foreign nationals. This involves conducting immigration checks and ensuring the appropriate work pass is obtained. Employers must comply with the Ministry of Manpower (MOM) guidelines when hiring foreign workers. Failing to validate an applicant’s immigration status can lead to significant legal consequences.
Singapore’s criminal background checks
Criminal background checks are permissible in Singapore but must be conducted appropriately and within legal boundaries. Employers can request such checks as part of their pre-employment background checks, particularly for roles requiring high levels of trust and security.
Considerations for criminal checks:
- Employers may ask candidates to declare any prior criminal convictions during the hiring process.
- There is no centralised public database for criminal records in Singapore. Employers typically rely on self-disclosures, reference checks, or third-party screening providers.
Criminal background checks are particularly relevant for positions involving financial transactions, data access, or vulnerable populations.
Failed employee background check in Singapore
Employers must ensure they handle any disclosed information fairly and without discrimination. For example, a failed background check should not automatically disqualify a candidate without assessing the relevance of the conviction to the role.
Minor inconsistencies may be overlooked or clarified, while serious concerns, such as falsified qualifications or a criminal record, can lead to more significant consequences. One possible outcome is the revocation of the job offer. If the individual has already started employment on a conditional basis, the employer may terminate the contract upon discovering the discrepancies. In some cases, employers may conduct further investigations or request clarification and additional documentation from the candidate to address the issues found during the background check.
For foreign workers, discrepancies in work pass applications, such as falsified educational credentials, may result in rejection by the Ministry of Manpower (MOM). Additionally, providing false information can lead to legal consequences, including fines, imprisonment, or even a permanent ban from working in Singapore, particularly if fraudulent documents are involved.
Other types of pre-employment background checks in Singapore
Aside from criminal and immigration checks, employers may consider other types of background checks to ensure a candidate’s suitability for a role. These include:
- Employment verification: Employers often conduct checks to verify a candidate’s employment history, such as previous roles, job titles, and tenure. This is particularly useful when validating qualifications or experience for senior-level positions.
- Education verification: Confirming academic qualifications is common in pre-employment background checks. Employers may request copies of degrees, certificates, or transcripts to ensure accuracy.
- Reference checks: Obtaining professional references from former employers provides insights into the candidate’s work ethic, performance, and suitability for the role.
- Medical checks: Employers may require medical examinations for roles with specific health requirements. However, these checks must be relevant to the job and comply with PDPA guidelines.
Hiring employees and other types of workers in Singapore
When it comes to hiring employees in Singapore, employers have various options to meet their organisational needs. From full-time employees to freelancers and independent contractors, understanding the different types of workers, along with relevant regulations, is essential for a smooth hiring process.
Full-time, part-time, and fixed-term employees in Singapore
In Singapore, employees can be hired on a full-time, part-time, or fixed-term basis. The Employment Act (EA) governs the relationship between employers and employees and sets out the rights and protections of workers.
Under the EA, an “employee” is defined as anyone under a contract of service with an employer, except for seafarers, domestic workers, and government employees. Specific protections apply to Part IV EA employees, including workmen earning up to SGD 4,500 monthly and non-workmen earning up to SGD 2,600 monthly. These protections include rest days, overtime pay, and limits on working hours.
Independent contractors in Singapore
Engaging independent contractors in Singapore is another hiring option for businesses looking for specialised services without entering into an employment relationship. However, simply labelling someone as an independent contractor does not determine their status. The Ministry of Manpower (MOM) and courts will assess the actual substance of the working arrangement.
Employers should consider the distinction between independent contractors and employees carefully to avoid disputes or non-compliance issues.
Agency workers in Singapore
Employers may also hire agency workers, who are often Singapore citizens or permanent residents. These workers are usually placed by employment agencies and can provide flexibility for short-term staffing needs.
Hiring freelancers in Singapore
Hiring freelancers in Singapore is becoming increasingly popular, particularly for creative, technical, and project-based work. Freelancers operate as self-employed individuals and are not protected under the Employment Act. Employers engaging freelancers must ensure clear contract terms to outline deliverables, payment, and other obligations.
Hiring retirees in Singapore
Hiring retirees in Singapore is another viable option for employers seeking experienced talent. With an ageing workforce, businesses can leverage the skills and expertise of older workers through flexible or part-time arrangements.
Foreign interns in Singapore
Employers can also consider hiring foreign interns in Singapore. Foreign nationals seeking internships require a valid Training Work Permit or Training Employment Pass, depending on their qualifications and the internship’s nature.
Hiring foreign workers in Singapore
When hiring foreign employees in Singapore, employers must comply with strict regulations, particularly regarding work passes and immigration requirements. The type of work pass required depends on the foreign worker’s qualifications, skill level, and salary.
Common work passes include:
- Employment Pass (EP): For highly skilled professionals, managers, and executives earning at least 5,000 SGD monthly in sectors like financial services. From 1 September 2023, EP applicants must also pass the Complementarity Assessment Framework (COMPASS), which evaluates individuals and companies based on various criteria.
- S Pass: For mid-skilled workers earning a minimum of 2,500 SGD monthly. Employers must pay a monthly levy and adhere to quotas for hiring S Pass holders.
- Work permits: For semi-skilled workers in sectors such as construction, manufacturing, and services. Employers must meet sector-specific quotas and pay levies for Work Permit holders.
Language used in Singapore
Understanding the language used in Singapore and its cultural nuances allows employers to build strong, inclusive teams. While English remains the primary working language, being mindful of the linguistic diversity and the cultural significance of other languages like Mandarin and Malay can enhance workplace communication.
What language is spoken in Singapore?
Singapore is a multicultural society with four official languages: English, Malay, Mandarin Chinese, and Tamil. However, English is the most used language in Singapore in both business and daily communication.
- English language in Singapore: English serves as the main working language and is the medium for education, business, and government operations. Most employment contracts, corporate communications, and legal documents are written in English. Employers are encouraged to use clear and precise English in their workplace documentation to ensure compliance and understanding. While there is no national language requirement for Singapore, English proficiency is typically expected of employees, especially in professional and customer-facing roles.
- Chinese language in Singapore: Mandarin Chinese is widely spoken among the Chinese-majority population. It is often used in informal settings or among Chinese-speaking employees. Employers hiring workers who interact with Mandarin-speaking clients or teams may find it beneficial to ensure their employees have Mandarin proficiency.
- Other languages: Malay, as the national language, holds cultural significance and is used in ceremonial settings. Tamil is spoken within the Indian community. While these languages may not dominate the workplace, businesses serving specific cultural groups may benefit from employees proficient in these languages.
Cultural diversity in Singapore
The cultural diversity in Singapore plays a significant role in shaping communication styles and workplace practices. Employers should be mindful of the following:
- Multicultural workforce: Singapore’s workforce comprises individuals from various ethnic backgrounds, including Chinese, Malay, Indian, and expatriate communities. Promoting inclusivity and sensitivity to cultural differences fosters a harmonious work environment.
- Language and business etiquette: While English is the most used language in Singapore, understanding other languages or dialects can help bridge cultural gaps, particularly in relationship-driven industries like sales or hospitality. Directness in communication is valued, but politeness and respect are equally important. Using appropriate language and tone ensures professional and effective communication.
- Hiring considerations: Employers do not need to adhere to any national language requirement for Singapore when drafting contracts or setting job criteria. However, roles involving customer interaction or global communication may specify proficiency in English or additional languages like Mandarin. There are also no specific legal requirements for the language used in employment contracts, though they are generally written in English for clarity and compliance.
Payroll processing in Singapore
Setting up payroll processing in Singapore requires careful planning and compliance with employment laws, CPF contributions, and tax obligations. Employers can simplify the process by adopting a reliable payroll system in Singapore that automates calculations and ensures accuracy. From CPF contributions to income tax withholdings, a well-organised payroll process is essential for businesses to thrive in Singapore’s competitive employment landscape.
Payroll system in Singapore
The Employment Act (EA) is the cornerstone of labour laws in Singapore. It governs matters related to salary payments, working hours, and employment conditions. Under the EA:
- Employers must provide itemised payslips for all employees covered under the Act.
- Payslips must include details like basic salary, allowances, deductions, overtime, and net pay.
- Employers are also required to maintain salary records in alignment with the payslip requirements.
On the other hand, Central Provident Fund (CPF) contributions, mandated under the CPF Act, is a social security savings plan for Singaporean citizens and Permanent Residents (PRs) earning more than 50 SGD monthly. Employers are responsible for making monthly CPF contributions based on the employee’s wages, their age and income level.
Moreover, employers in Singapore must comply with tax withholding requirements for employees, particularly for foreign workers. This includes the Income Tax Clearance (Form IR21), which requires employers to withhold tax on foreign employees’ salaries upon their termination or departure from Singapore.
How to set up payroll in Singapore
1. Register your business entity
Before initiating payroll, foreign companies must register a subsidiary, branch, or representative office to carry on business in Singapore. Under the Companies Act 1967, “carrying on business” includes activities like managing property or employing staff. However, certain activities, such as holding director meetings or using independent contractors, do not require registration.
2. Select a payroll system
Employers should implement an efficient payroll system in Singapore to automate salary calculations, tax deductions, and CPF contributions. Payroll software solutions should streamline company’s payroll process from monthly salary payments, statutory contributions, and tax filings and compliance.
3. Ensure statutory compliance
To meet payroll compliance requirements, employers must:
- Calculate salaries in accordance with employment contracts and EA regulations.
- Deduct statutory contributions, such as CPF, SDL, and Foreign Worker Levy (FWL).
- Prepare itemised payslips with accurate salary components for employees.
- Submit tax returns and income declarations to the Inland Revenue Authority of Singapore (IRAS).
4. Payroll management for foreign workers
When processing payroll for foreign employees, employers must verify valid work passes, set account for levies and quotas applicable to S Pass and Work Permit holders. They should also withhold taxes for foreign employees upon termination to comply with tax clearance requirements.
Step 5: Maintain records
Employers must retain payroll records, including payslips and salary details, for at least two years. These records must align with EA and tax requirements to facilitate audits and compliance reviews.
Step 6: Monitor ongoing compliance
Singapore’s payroll regulations are updated periodically. Employers should stay informed about changes to CPF rates, tax policies, and work pass regulations to ensure ongoing compliance.
Setting up payroll in Singapore and ensuring compliance with local regulations can be a complex and time-consuming process, especially for businesses unfamiliar with the country’s labour laws. From calculating statutory contributions like CPF to adhering to strict tax requirements, even small mistakes can lead to penalties or legal issues.
To simplify this process, many companies choose to partner with an Employer of Record (EOR). This allows businesses to focus on managing their talent and growing their operations without getting bogged down by administrative or legal challenges.
Easily hire employees in Singapore and beyond with CXC
Hiring employees in Singapore usually means setting up a legal entity, which can be costly and time-consuming. Employers can avoid this hassle by working with an Employer of Record (EoR), like CXC.
Through our EoR solution, you can confidently hire employees in Singapore, without worrying about compliance issues. We’ll handle everything from payroll to benefits to employment contracts on your behalf — so all you have to think about is finding the right person for the job.
FAQ's
1. What are the options for hiring employees in Singapore?
Businesses can hire employees in Singapore by setting up a local entity, using an employer of record (EOR), engaging an independent contractor, or working with a staffing agency. The best option depends on your hiring plans, how quickly you need to onboard employees, the worker’s immigration and work-authorisation status and whether you want to establish a local presence.
Set up a local entity in Singapore
This is suitable for businesses planning a long-term presence in Singapore. The company becomes the legal employer and is responsible for employment contracts, payroll, tax reporting, Central Provident Fund (CPF) contributions where applicable, Skills Development Levy (SDL), employment records, itemised payslips, statutory leave and other applicable obligations under Singapore employment law and compliance with Ministry of Manpower (MOM) requirements.
A Singapore entity may also apply for eligible work passes, subject to the applicable eligibility criteria, salary thresholds, Fair Consideration Framework requirements, quotas, levies and MOM approval.
Use an Employer of Record (EOR) in Singapore
An employer of record provider in Singapore legally employs workers on your behalf while you manage their day-to-day work. This allows foreign companies to hire Singapore citizens, permanent residents and other individuals who already have an independent legal right to work in Singapore, without establishing a local company. The EOR manages employment contracts, payroll, statutory contributions, tax reporting, and local employment compliance within the agreed scope of services.
Engage independent contractors in Singapore
This may suit genuine project-based work, but businesses should assess the working arrangement carefully. The contractual label is not conclusive. If the actual relationship has the characteristics of employment, including significant control, integration into the business and limited financial independence, the individual may be found to be an employee. Misclassification can create employment, tax, CPF and other regulatory liabilities.
Partner with a staffing or recruitment agency in Singapore
Recruitment agencies help source candidates, but unless they also provide EOR services, your business remains the legal employer and is responsible for ongoing employment obligations. Any agency carrying out employment-agency activities must hold the appropriate Singapore employment agency licence unless an exemption applies.
For many international businesses hiring their first employee or building a small team, EOR services provide a practical way to enter the market without waiting to establish a local entity provided the individuals already have the necessary right to work in Singapore and the proposed arrangement is legally permissible.
2. Can a foreign company hire employees without a local entity in Singapore?
Yes, in certain circumstances. A foreign company may use an employer of record provider such as CXC to employ Singapore citizens, permanent residents or other individuals who already hold an independent right to work in Singapore. This is subject to an assessment of the role, work-authorisation status and proposed employment arrangement.The Employer of Record becomes the employee’s legal employer in Singapore, while your business manages the employee’s day-to-day responsibilities, performance, and business objectives. This allows companies to build a local workforce without completing company incorporation first.
This model does not allow an overseas company without a Singapore presence to use an EOR to obtain an Employment Pass, S Pass or other work pass for a foreign national. MOM states that work passes are intended for foreigners working for Singapore-based companies.
An EOR typically manages:
- Locally compliant employment contracts.
- Payroll processing.
- Statutory tax reporting.
- Mandatory CPF contributions where required.
- Skills Development Levy (SDL) payments.
- Leave administration and employment records.
- Ongoing compliance with Singapore employment laws.
The EOR model is commonly used by companies that are testing the Singapore market, hiring one or two employees before expanding, building remote regional teams, and employing specialists without opening a Singapore office
If your business later establishes a Singapore entity, employees can usually be transferred from the EOR to your local company through a planned transition process. This generally requires employee agreement, new or transferred employment documentation, continuity-of-service analysis, payroll and CPF updates, and compliance with any applicable work-pass requirements. A transfer should not be represented as automatic.
3. How long does it take to hire an employee in Singapore?
Hiring an employee in Singapore can take anywhere from a few days to several weeks, depending on your hiring model and whether the employee requires a work pass.
If you already have a Singapore entity, onboarding generally involves preparing an employment contract, and applicable written Key Employment Terms, registering the employee for payroll, completing any required statutory setup, and collecting employment documentation.
Using EOR services in Singapore can reduce the setup time because the provider already has the local employment infrastructure in place. Once the employment terms are agreed, the EOR can prepare compliant contracts, complete payroll onboarding, and manage the required employment administration. The overall timeline may still depend on factors such as:
- Candidate availability.
- Verification of the individual’s citizenship, permanent-resident status or existing work authorisation.Where a Singapore-based employing or client entity is involved, Employment Pass or S Pass eligibility and MOM processing, as applicable.
- Background screening.
- Completion of onboarding documents.
- Agreed start date.
- CPF, SDL, tax and payroll registration requirements.
For businesses that want to hire quickly without establishing a local company, an EOR is often a potentially efficient way to employ eligible talent in Singapore, but timelines and onboarding remain subject to legal, compliance and provider checks. No start date should be guaranteed before those checks are completed.
4. When does it make sense to use an employer of record in Singapore?
Using an employer of record in Singapore makes sense when you want to hire employees quickly without establishing a local legal entity.
Many businesses use an EOR during the early stages of expansion because it allows them to employ local talent while reducing the time and administration involved in setting up a Singapore company.
An EOR may be a good option if you are:
- Hiring your first employee in Singapore who already has the right to work locally.
- Testing a new market before investing in a local entity.
- Building a remote regional team.
- Recruiting specialist talent for a specific project.
- Expanding into multiple countries at the same time.
Instead of managing local employment compliance yourself, the EOR becomes the legal employer and takes responsibility for payroll, statutory contributions, employment documentation, and ongoing compliance within the scope of the EOR arrangement. Your business continues to direct the employee’s work and manage their performance.
The client company may still retain legal and operational responsibilities, including responsibilities arising from its control of the employee’s activities, workplace safety, data protection, confidentiality, discrimination, regulatory licensing and the accuracy and lawfulness of the instructions it gives the EOR. Using an EOR does not transfer or eliminate all client-side risk.
Many companies later transition employees to their own Singapore entity once their operations have grown. Any transition must be planned and documented and may require employee consent and a reassessment of immigration, accrued entitlements and continuity of service.
5. How much does an employer of record cost in Singapore?
The cost of an employer of record in Singapore depends on the provider, the services included, and the complexity of your hiring requirements. Most EOR Singapore providers charge a fixed monthly fee for each employee, while some offer customised pricing for larger teams or multi-country hiring.
The monthly fee generally covers services such as:
- Preparing locally compliant employment contracts.
- Onboarding new employees.
- Payroll processing.
- Tax and statutory reporting.
- Central Provident Fund (CPF) administration where required.
- Skills Development Levy (SDL) administration.
- Leave management and employment records.
- Ongoing HR and employment compliance support.
The EOR fee is separate from the employee’s salary, statutory employer contributions, benefits, and any work pass or immigration costs.
When comparing providers, look beyond the monthly fee. Some EOR services include payroll, HR support and compliance as part of the package, while others charge separately for onboarding, offboarding, permitted immigration support, or additional employment services.
6. What are the compliance obligations that make an EOR valuable in Singapore?
Using an employer of record in Singapore helps businesses meet their employment obligations without having to manage every local requirement themselves. Singapore employers must comply with rules covering employment, payroll, tax, statutory contributions and record keeping. An EOR Singapore provider takes on many employer responsibilities within the agreed arrangement as the legal employer.
Compliance area | How an EOR helps |
Employment contracts | Prepares locally compliant employment contracts and written Key Employment Terms for employees covered by the relevant requirements. |
Payroll | Processes payroll accurately and pay employees on time. |
CPF | Calculates and remits Central Provident Fund (CPF) contributions for eligible employees. |
Skills Development Levy | Calculates and pays the Skills Development Levy (SDL)for employees working in Singapore, including foreign employees, subject to the statutory minimum and maximum. |
Tax reporting | Supports employer tax reporting and employment income reporting to the Inland Revenue Authority of Singapore (IRAS). |
Employment records | Maintains statutory employment records and payroll documentation. |
Leave administration | Manages statutory leave entitlements and other employment benefits. |
Work passes | Verifies work-authorisation status and supports only legally permissible immigration processes. An EOR cannot apply for a work pass to place a foreigner in Singapore to work for an overseas company without local presence. |
An Employer of Record also keeps up with changes to Singapore’s employment requirements. For companies hiring their first employee or building a small team in Singapore, EOR services an reduce administrative workload and support local compliance. However, the allocation of responsibilities should be documented clearly, and the client must continue to comply with obligations that remain within its control.
7. What did the MOM July 2024 clarification change for EOR services in Singapore?
In July 2024, MOM published specific guidance on whether an EOR in Singapore may apply for a work pass for a foreigner who will be based in Singapore while working for an overseas company. MOM’s answer is “No”. It explained that Singapore work passes are for foreigners working for Singapore-based companies.Where the overseas company has no local presence, MOM indicates that it may consider establishing a representative office or incorporating a company in Singapore, subject to the requirements applicable to those structures. The appropriate Singapore-based organisation would then need to assess and apply for the relevant work pass.
The July 2024 guidance should therefore not be described as recognising EOR work-pass sponsorship or providing general regulatory approval of the EOR model. Its principal effect is to limit the use of EOR arrangements as an immigration solution for overseas companies without a Singapore presence.
For international businesses, the clarification provides greater certainty about how EOR arrangements operate in the work-pass context. Before hiring, the parties should separately assess.
- whether the individual already has the right to work in Singapore;
- whether the proposed duties are permitted under that status;
- which entity will be the actual Singapore-based employer;
- whether a work pass is required and which entity is legally eligible to sponsor it; and
- the respective employment, workplace safety, tax, data protection and regulatory responsibilities of the EOR and client.
8. What CPF contributions must an EOR manage on behalf of employers in Singapore?
An employer of record in Singapore is responsible for managing Central Provident Fund (CPF) contributions for employees who are eligible under Singapore law.
CPF is Singapore’s mandatory social security scheme. Employers must calculate and pay the correct employer and employee contributions based on the employee’s age, citizenship or permanent resident status, and monthly wages. Contribution rates are reviewed periodically by the government, so employers need to keep up with the latest requirements.From 1 January 2026, the Ordinary Wage ceiling is SGD 8,000 per month. The CPF annual salary ceiling remains SGD 102,000. Contribution rates for employees aged above 55 to 65 also increased from 1 January 2026.
As part of its service, an EOR provider in Singapore typically:
- Calculates CPF contributions accurately each payroll cycle.
- Deducts the employee’s share from salary in accordance with the statutory rates and deduction requirements.
- Pays employer and employee CPF contributions to the CPF Board.
- Applies the correct contribution rates and wage ceilings.
- Maintains payroll records and statutory reporting.
Not every employee is covered by CPF. Employers must generally pay CPF contributions for Singapore citizens and Singapore permanent residents who are employed under a contract of service and earn total wages of more than SGD 50 per month. CPF contributions are not permitted for foreigners who are not Singapore citizens or permanent residents, including Employment Pass, S Pass and Work Permit holders.
Different rules may apply during the first and second years after an employee becomes a Singapore permanent resident. Graduated contribution rates ordinarily apply unless the employer and employee jointly apply to contribute at higher or full rates.
An Employer of Record helps apply the correct rules based on each employee’s circumstances.
9. What is the Skills Development Levy and why does it apply to EOR arrangements in Singapore?
The Skills Development Levy (SDL) is a mandatory levy that employers generally pay for employees working in Singapore, including Singapore citizens, permanent residents and foreign employees, unless a specific exemption applies.. The levy helps fund workforce training and skills development through SkillsFuture Singapore.
When a business uses an employer of record in Singapore, the Employer of Record becomes the legal employer and is responsible for calculating, reporting and paying the SDL where it applies.
As of July 2026, the SDL is calculated at 0.25% of each employee’s total monthly wages:
- A minimum levy of SGD 2 applies where monthly wages are below SGD 800.
- A maximum levy of SGD 11.25 applies where monthly wages exceed SGD 4,500.
- After calculating the levy for each employee, the employer adds the amounts together and rounds the aggregate SDL payable down to the nearest dollar.
An EOR provider in Singapore typically manages:
- Calculating the correct SDL for each employee.
- Submitting SDL payments through the applicable CPF Board payment process, as CPF Board collects the levy on behalf of SkillsFuture Singapore.Keeping payroll records that support statutory reporting.
- Applying the levy alongside payroll and other statutory obligations.
Although the SDL is a relatively small payroll cost, employers must still calculate and pay it correctly. Managing the levy alongside payroll, CPF and tax reporting helps ensure employees are employed in line with Singapore’s statutory requirements.
10. What makes CXC different from other EOR providers in Singapore?
CXC combines local expertise in Singapore with more than 30 years of global workforce experience, helping businesses hire eligible employees efficiently while supporting compliance with local employment requirements.
The statements regarding CXC’s years of experience, local capabilities and geographic coverage are corporate claims and should be verified internally against current records before publication.
As an employer of record provider in Singapore,, CXC supports the entire employment lifecycle rather than just payroll. From onboarding through to offboarding, businesses have one partner managing employment, payroll and compliance while they focus on growing their team.
CXC’s EOR services in Singapore include:
- Compliant employment contracts.
- Payroll processing and statutory reporting.
- CPF and Skills Development Levy administration where applicable.
- Employment Pass and S Pass support.
- HR and employee lifecycle support.
- ongoing monitoring of employment and payroll requirements.
As your business expands beyond Singapore, CXC can support hiring across more than 100 countries. Instead of managing multiple local providers, you can work with one global partner backed by local employment expertise in each market.
Compliantly hire workers anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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