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How to Hire Employees in Singapore

Key Takeaways

  • When hiring employees in Singapore, carefully consider the legal requirements for employing workers in the country. 
  • Advertise Singapore job vacancies on local job portals or through recruitment agencies.
  • When preparing the employment contract, make sure it is in accordance with the Employment Act, detailing terms of employment, and conduct an onboarding process.
  • Consider the support of a Singapore Professional Employer Organization (PEO) or a Singapore Employer of Record (EOR) when hiring in Singapore from overseas. 

Singapore’s strategic location, robust infrastructure, and transparent legal system, alongside its political stability, offer businesses a springboard into the rapidly developing markets of ASEAN, China, and India. The nation’s dedication to the rule of law, particularly in the enforcement of intellectual property rights, assures businesses with proprietary knowledge or technology of their assets’ protection. Moreover, the country’s political stability contributes to a predictable business environment, critical for effective long-term planning.

The strength of Singapore’s workforce is another key attraction. A strong focus on education and skills development has cultivated a pool of highly skilled, diverse, and English-proficient talent. This proficiency facilitates seamless communication within global companies. Add to this Singapore’s competitive corporate tax rate, extensive network of Double Taxation Agreements, and numerous industry-specific tax incentives, and the financial appeal becomes apparent. The country’s business-friendly environment is evident in its high ranking on the World Bank’s ‘Ease of Doing Business’ index — no 1 for business-friendly regulations

Finally, Singapore’s digital readiness, with its high adoption rates and supportive atmosphere for innovation, ensures that businesses, whether traditional or technology-focused, can operate smoothly and effectively.

For any companies interested in hiring employees in Singapore, here we provide comprehensive information about how to do so quickly, and cost-effectively. 

Hiring employees in Singapore — Overview

Singapore is an attractive destination for businesses seeking to hire employees due to its skilled and diverse workforce. The legal requirements for employment in Singapore are regulated by the Ministry of Manpower, with the Employment Act serving as the primary legislation governing employment contracts, rights and obligations of employees and employers. For hiring non-local employees, work passes and permits are required, the provision of which is subject to the candidate meeting certain qualifications and the company demonstrating efforts to hire locals first.

The cost of living in Singapore, however, is high. Therefore, salaries, while globally competitive, are also generally higher than in many other countries. Singapore has a progressive tax system, with the personal income tax rate ranging from 0% to 22% as of my knowledge cutoff in September 2021. While the country has a Central Provident Fund (CPF) system where employers make mandatory contributions to the fund for the long-term savings of their employees, this system primarily applies to Singapore citizens and Permanent Residents. Nonetheless, this high standard of living contributes to an engaged and productive workforce. The overall economic stability and growth prospects of Singapore further present a conducive environment for businesses to hire and expand.

Singapore labor law — key requirements

Key things you need to know before employing workers in Singapore, include :

  1. Singapore labor law, including the requirements in the Employment Act —  Singapore’s main labour law. It provides for the basic terms and conditions at work for employees covered by the Act.
  2. Work Passes and Permits: Depending on the type of job, qualifications, and salary of the foreign worker, you would need to apply for the relevant type of work pass or permit. It is important to ensure that your prospective employees are legally able to work in Singapore. You will also need to follow the ‘Fair Consideration Framework’: Employers in Singapore are required to consider all candidates fairly, regardless of citizenship, under the Fair Consideration Framework. This involves posting the job on the national Jobs Bank for at least 14 days before applying for an Employment Pass.
  3. Employment Contracts: While oral contracts are legally valid, it is highly recommended to have a written employment contract to minimize potential disputes. The contract should specify the terms of employment such as position, responsibilities, salary, benefits, working hours, and conditions for termination.
  4. Employee Benefits and Rights: The Employment Act of Singapore provides certain rights and benefits to employees such as paid public holidays, paid sick leave, and annual leave. In addition, there are requirements for overtime pay and work safety.  Employers must contribute to the Central Provident Fund (CPF) for Singapore Citizen or Singapore Permanent Resident employees. The CPF is a compulsory comprehensive savings plan that funds retirement, healthcare, and housing needs. All employers are also required to contribute to the  Skills Development Levy (SDL) for all employees up to the first SGD 4,500 of gross monthly remuneration at the rate of 0.25% or SGD 2, whichever is higher. Finally, Employers are required to provide workplace injury compensation insurance for all employees doing manual work, as well as all employees earning less than SGD 2,100 a month.
  5. Workplace Safety and Health (WSH): Employers are required to manage safety and health risks at workplaces to provide a safe and healthy working environment.
  6. Personal Data Protection Act (PDPA): Employers are required to comply with the PDPA when handling employee data.

Each of these areas contains its own complexities and nuances, so it would be wise to seek professional advice when hiring employees in Singapore for the first time.

How much does it cost to hire employees in Singapore?

The cost of hiring employees in Singapore isn’t just about the salary you pay to the employees. There are several additional costs that employers need to consider:

  1. Salary: The average salary in Singapore varies greatly depending on the position, industry, and the candidate’s experience and qualifications. In 2023, the average salary in Singapore is about SGD 4,563 per month. However, this can vary greatly depending on the role and industry.
  2. Central Provident Fund (CPF): The CPF is a compulsory social security savings scheme for Singapore Citizens and Permanent Residents. Employers are required to make contributions to the CPF on behalf of their employees. The employer’s contribution rate varies from 7.5% to 17% of the employee’s wage, depending on the employee’s age.
  3. Skills Development Levy (SDL): The SDL is a levy imposed on employers for all employees up to the first SGD 4,500 of gross monthly remuneration at the rate of 0.25% or SGD 2, whichever is higher.
  4. Workplace Injury Compensation Insurance: The cost of this insurance will vary depending on the industry and the nature of the work.
  5. Recruitment costs: These may include advertising the job vacancy, using a recruitment agency, and the time spent screening and interviewing candidates.
  6. Training and Development: This is an important investment for improving the skills and productivity of your employees. The cost will depend on the type of training provided.
  7. Employee Benefits: These may include health insurance, bonuses, allowances, paid leaves, etc. The cost of these benefits can vary greatly depending on the company’s policies.
  8. Work Passes and Permits: If you’re hiring foreign employees, you’ll need to apply for the relevant work pass or permit. The application and issuance fees for these passes can vary.

These are the main costs involved in hiring employees in Singapore. The actual cost can vary greatly depending on many factors such as the industry, the size of the company, and the specific role. It’s also worth noting that there may be government grants and subsidies available that can help to offset some of these costs.

What is the best way to hire employees in Singapore?

There are several ways to hire employees in Singapore, each with its own benefits and drawbacks. Here are some of the main methods:

  1. Direct Hiring: This is the most straightforward method where you recruit and hire employees directly through a legal entity in Singapore or a registered branch of your company. This gives you the most control over the hiring process, but also requires the most effort and resources.
  2. Professional Employer Organization (PEO): A PEO is a company that provides comprehensive HR solutions for small to mid-sized businesses. When you hire through a PEO, the PEO handles HR tasks like payroll, employee benefits, tax compliance, and risk management, while the employee performs work for your company. Read more about this model in our comprehensive PEO explainer.  
  3. Employer of Record (EOR): Similar to a PEO, an EOR becomes the legal employer and takes care of all employment-related tasks, including compliance with local labor laws, payroll, and benefits administration. An EOR can be particularly useful if you want to hire employees in Singapore but don’t have a legal entity there. Delve into this topic in more detail in our ultimate Singapore EOR guide. 
  4. Contracting/Freelancing: Another option is to hire contractors or freelancers. This can be more flexible than hiring permanent employees and can be a good option for short-term projects or if you need specialist skills. However, you need to be careful to ensure that you comply with all relevant laws and regulations.

Each of these methods has its own advantages and disadvantages, and the best choice will depend on your specific needs and circumstances. 

What are the key steps to hire employees in Singapore?

Hiring employees in Singapore involves several steps, from identifying the need for a new hire to onboarding the new employee. Here is a general step-by-step guide:

  1. Identify the need for a new hire: The first step is to determine what job needs to be filled, the responsibilities of the role, and the skills and qualifications required.
  2. Prepare a job description: This should clearly outline the responsibilities, requirements, and qualifications for the job.
  3. Advertise the job: Post the job on job boards, your company’s website, social media, and other platforms. Under the Fair Consideration Framework, jobs that pay less than SGD 15,000 per month must be posted on the national Jobs Bank for at least 14 days.
  4. Screen and shortlist candidates: Review resumes and applications, conduct initial interviews, and shortlist the most suitable candidates.
  5. Interview and select the candidate: Conduct in-depth interviews with the shortlisted candidates. You may also want to conduct skills tests or other assessments. After the interviews, select the most suitable candidate for the job.
  6. Offer employment: Prepare a job offer letter detailing the terms of employment. The candidate may accept the offer immediately, or there may be some negotiation.
  7. Prepare an employment contract: Once the offer is accepted, prepare a written employment contract. The contract should clearly specify the terms and conditions of employment, including job role, salary, benefits, working hours, and termination conditions.
  8. Apply for a work pass or permit: If you’re hiring a foreign employee, you’ll need to apply for the appropriate work pass or permit. The type of pass or permit will depend on the employee’s qualifications, salary, and the nature of the job.
  9. Onboard the new employee: Once the work pass or permit is approved, the new employee can start work. The onboarding process should include an orientation to familiarize the new employee with the company’s policies and procedures, as well as any necessary training.
  10. Register for CPF contributions: If the new employee is a Singapore Citizen or Permanent Resident, you’ll need to register for CPF contributions.

Remember, each of these steps involves various legal requirements and it’s important to ensure that you comply with all relevant laws and regulations when hiring employees in Singapore. If you’re unsure about any aspect of the hiring process, it’s advisable to seek professional advice.

Hire employees in Singapore — with the right partner

Hiring employees in Singapore means having a details understanding of employment regulations, market conditions, and specific cultural factors that impact on employment in Singapore. To streamline hiring in Singapore, many companies will benefit from a Singapore PEO or Singapore EOR solution. 

Check out our Singapore PEO and Singapore EOR guides to find Singapore’s top PEOs and best EORs. 


Yes, under the Fair Consideration Framework, employers are required to advertise job vacancies on MyCareersFuture.sg (previously known as the Jobs Bank) for at least 14 days before they can apply for an Employment Pass or S Pass for a foreign employee. This requirement applies to jobs paying less than SGD 15,000 per month. This is to ensure that Singaporean workers are given fair consideration for job opportunities.

The Central Provident Fund (CPF) is a compulsory social security savings scheme for Singapore Citizens and Permanent Residents. Employers are required to make CPF contributions for their employees. The employer's contribution rate varies from 7.5% to 17% of the employee's wage, depending on the employee's age. For more detailed rates, you can refer to the CPF Board's website.

Yes, it's possible to hire a foreigner to work in Singapore without setting up a company there by using an Employer of Record (EOR) or Professional Employer Organization (PEO) service. These companies become the legal employer of the worker in Singapore and handle all employment-related tasks, including compliance with local labor laws, payroll, and benefits administration. This can be a useful solution if you want to hire employees in Singapore but don't want to set up a legal entity there.