How to use an Employer of Record in Singapore

A friendly business climate, low taxes, and a highly skilled and diverse workforce make Singapore a popular destination for companies who want to expand operations in the Asia Pacific region. It's also the world's most competitive economy and ranks highly on the human development index and economic factors like GDP per capita per person.

But, you’ll have to spend a significant amount of time and money to begin hiring employees in Singapore. From dealing with the logistics of setting up a local entity in Singapore to ensuring compliance with local regulations — it can be an expensive and time-consuming process.

An employer of record (EOR) can make it easier for you to hire, pay, and manage workers in Singapore. An EOR can help you comply with local employment regulations and oversee administrative operations like managing payroll, benefits, and payroll taxes.

In this article, we’ll explain the benefits and costs of using an EOR, how you can use an EOR to hire employees in Singapore, and how to select the best EOR for your business.

Six steps to hiring employees in Singapore using an employer of record

The right EOR will set you up to start hiring in Singapore without having to register an entity locally, get employment permits, and open a local bank account. Here are five steps to follow to choose the best EOR to hire your dream team in Singapore.

Step 1: Weigh up the pros and cons of each potential partner

Each EOR offers a different quality of service, features, and price. The first step is to make a list of services required and vet each potential EOR to determine the provider which best suits your needs. Essentially, these features should cover all you need to employ workers in Singapore and should include:

• Ongoing compliance services designed to keep you in line with any changing regulations

• HR and administrative support features like managing benefits and paying withholding taxes

• Enhanced data protection and intellectual property security

• Payroll management to ensure employees get paid on time

Step 2: Take the time to select the most appropriate EOR service provider 

That checklist of features we mentioned above can now serve as a tool to measure how well the EOR providers on your shortlist can help you break into the Singaporean labor market. Make sure that the EOR owns its own entity in Singapore, rather than relying on external providers to provide some of their services. You can never be sure about data security, customer service, or costs when it comes to partner-dependent providers since you don’t work with them directly.

Step 3: Check the reviews, testimonials, and coverage of your shortlisted providers

Make sure you check reviews on the company website, client testimonials, and third-party review sites like Trustpilot and Saasworthy. It helps you learn more about the way the EOR operates and how well (or not) it treats its employees. 

Step 4: Ensure that the EOR provides the best-in-class employee experience

An ideal employer of record will help you issue contracts to employees, collect and file employment documents, and process payroll every month. Essentially, an employer of record serves as your brand’s employee-facing image. Make sure they have the capabilities to provide best-in-class employee experience by:

• Paying salaries on time

• Resolving employee queries quickly

• Onboarding new employees seamlessly, and

• Offering explanations for any taxes deducted from your employees’ net pay

Step 5: Work with your EOR partner to provide a fair and equitable compensation package 

Compensation for remote roles can vary dramatically depending on factors such as market rates and local cost of living. An employer of record should be willing to help you figure out an optimal rate for whichever roles you’re hiring for in Singapore. , factoring in specific labor laws, market rates, the applicant’s role, experience, and skill level, and local cost of living.

Step 6: Make sure your EOR partner guards your intellectual property and maintains data security for your business

Singapore’s recent Pandora Papers leak confirms that any organization can get hacked or suffer data leaks if the right systems are not in place to safeguard operational data. An employer of record should adhere to strict data protection standards designed to secure your data from falling into the wrong hands.

Similarly, your intellectual property can help bolster your company’s market position. Your chosen EOR should ensure that any patents and inventions produced using your assets are duly transferred to your company.

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What are the benefits of using an employer of record in Singapore?

It can take several months to get set up to hire international employees. You’ll have to open your own entity, understand labor laws, ensure compliance, set up various HR processes, and do all the legal legwork — a process that can be expensive and cumbersome.

An employer of record simplifies hiring in Singapore by offering a legal vehicle you can use to start hiring employees from day one, without having to spend thousands on creating and maintaining your own structures and processes.

An EOR represents you locally and helps you:

• Maintain a local entity that qualifies you to hire in Singapore

• Outline the terms and conditions of employment, including salaries, vacations and holidays, termination terms, etc.

• Manage payroll and benefits, so workers can get paid on time

• Ensure your employees and contractors are adequately classified according to existing labor laws

• Manage the termination process to ensure employees are only let go as the law permits, to avoid penalties

• Pay any necessary taxes and levies on your behalf

How much does it cost to use an EOR in Singapore?

EOR costs can vary depending on the services required, the number of workers you want to hire, and the location of the workers. In general, EOR costs range from $599 to over $2,000 per employee per month.

Choosing an employer of record brings up an interesting dilemma between pricey legacy EOR operators and newer competitors that offer fewer features. The legacy EORs that target multinationals and large companies often charge exorbitant, enterprise rates. Newer EORs typically charge less, but may not offer all the features required to hire and pay employees in Singapore. You’ll also have to check whether they offer robust security and compliance measures like the legacy EORs.

Remote offers an extensive employer of record service in Singapore. Our services are designed to help you get set up to hire, process payroll and benefits for your workers, and stay on top of changing employment regulations for an affordable, flat fee.

Learn how Remote compares with other EOR providers and how we can help you start building your team in Singapore quickly and efficiently.

Hiring in Singapore

Much of Singapore’s employment law is based on several regulations, including:

• The Employment Act

• The Child Development Co-Savings Act

• The Employment of Foreign Manpower Act

• Work Injury Compensation Act, and

• The Workplace Safety and Health Act

Understanding how these employment laws work in practice will help you figure out how to manage employees and which EOR is well-positioned to help you comply with them.

Employment contracts and agreements in Singapore

Written and verbal contracts are equally valid in Singapore, as long as the terms of the agreement are clearly stated. Employment contracts usually contain:

• Identity details of the employer and employee 

• Job title and description

• Contract duration

• Working arrangements such as designated workplace, etc.

• Salary and benefits, and

• Notice periods

Electronic and manual signatures are equally valid.

Labor compliance in Singapore

Singapore has several labor standards in place designed to prevent abuses and create equitable working conditions for Singapore’s workforce. These include:

• Protecting employees from any form of discrimination due to race, religion, nationality, ideology, political affiliation, sex, financial, social, or physical condition

• Ensuring working hours don’t exceed nine hours daily or 44 hours per week

• Paying workers a minimum vital and adjustable wage for their efforts

• Paying salaries on time

• Ensuring employees and contractors are adequately classified to get full compensation and any benefits due for the degree of service they render to an employer, and

• Providing safe and dignified working conditions.

Payroll and payroll taxes in Singapore

Employee income and payroll taxes are capped at 22% and 20% respectively, although employees are required to file on their behalf. There’s no tax withholding requirement.

Employer payroll taxes range from 7.5% – 20% and are channeled into Singapore’s Central Provident Fund. 

Employment benefits and compensation in Singapore

How do you figure out a fair and equitable benefits and compensation package for your team in Singapore? You’ll need to start by offering mandatory benefits and throw in generous perks to stand out in a competitive market.

Maternity and paternity leave

Female employees are entitled to 16 weeks of pregnancy leave, as long as they’ve been employed for three months prior. Fathers are entitled to two weeks of paternity leave with benefits paid by the government.

Vacation and holidays

Employees are entitled to seven days of annual leave after three months with an employer, increasing to 14 days after seven years. In practice, employees receive anywhere from 14 to 20 days of paid leave annually and 11 paid public holidays a year.

Healthcare and Pensions

Singapore’s universal healthcare and pension systems are funded by mandatory contributions (7.5% – 20%) which employees are required to make into the Central Provident Fund.

Remote can help you offer supplementary private health care and pensions for your employees as an added perk in a population where universal healthcare and pensions are the default.

Severance pay and employee terminations in Singapore

Singapore practices at-will employment and either party can terminate an employment relationship as long as the required notice is provided. Notice periods range from a day for employees who’ve been working for less than 26 weeks, to four weeks for workers with five or more years of service.

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What are the risks of employee misclassification in Singapore?

Singapore defines employees and contractors differently. Companies must make sure they’re classifying their workers correctly, as they can get into serious trouble if they’re found to be misclassifying workers.

Singapore’s Ministry of Manpower can place strict penalties for misclassifying employees, and employers can either be fined or imprisoned for intentionally misclassifying workers with the intent of denying them any statutory benefits.

Using an EOR like Remote can help you distinguish between your employees and contractors and stay compliant with labor regulations. Remote’s team of experts has in-depth knowledge of employment laws in Singapore and can classify your workers correctly.

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Get started with an employer of record in Singapore

Tapping into the Singapore labor market and finding talented remote workers in the country can help you grow your business abroad. 

While hiring abroad can seem daunting, using a reliable EOR can make the process easy, fast, and secure. Remote’s EOR services offer everything you need to onboard employees in Singapore. With Remote, you can:

• Hire employees quickly through an owned entity

• Draft locally compliant employment agreements and set up onboarding procedures 

• Process payroll efficiently and ensure workers are paid on time

• Stay compliant with changing local regulations

• Secure your intellectual property, patents, and inventions

• Classify your employees accurately to avoid penalties and fines

Learn how Remote compares with other EOR providers. Ready to grow your team in Singapore? Get started with Remote and start onboarding your new team today! 

Your guide to switching EOR providers

Use this guide to learn how easy it is to switch from a different EOR provider and start employing your global team with Remote. We walk you through the key steps so you understand what’s involved.

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