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Singapore PEO (Professional Employer Organization)

VERDICT: Looking for PEO in Singapore? The best Singapore PEO in 2024 is Horizons. Horizons stands apart from other Singapore Professional Employer Organizations for its depth of expertise in Singapore hiring and HR compliance.

Key Takeaways

  • A Singapore Professional Employer Organization (Singapore PEO) is a company that specializes in payroll, HR, and benefits administration support for international companies hiring in Singapore.
  • A Singapore PEO may operate only in the Singapore market, or they may be part of an international PEO company with operations in Singapore.
  • The top 5 Singapore PEOs are Horizons, Skuad, Multipler, Deel and Remote.

With its strategic location, robust economy, and business-friendly environment, Singapore is an enticing destination for global businesses. However, understanding the nuances of Singaporean labor laws, employment contracts, tax regulations, and cultural norms can be daunting for foreign entities.

This is where Singapore Professional Employer Organizations (PEOs) step in to help you hire local and foreign employees — in Singapore without setting up a local entity.

What is a Singapore PEO?

Singapore Professional Employer Organization (PEO) is a company that offers comprehensive Human Resources (HR) outsourcing to businesses looking to establish or expand operations in Singapore. A Singapore PEO becomes a co-employer for your staff, managing HR, payroll, tax compliance health insurance, and various administrative tasks associated with employing staff in a foreign country.

A co-employment agreement is established between the client company and the PEO. While the client maintains control over the daily management of employees, the PEO takes on the responsibility of HR management, payroll processing, and compliance with Singaporean laws and regulations.

Is PEO Legal in Singapore?

Yes, PEO services are legal in Singapore. Singapore allows businesses to engage PEOs to help manage various aspects of their human resources and employment needs. PEOs operate within the framework of Singaporean employment and labor laws, ensuring compliance with all relevant regulations.

While PEO is legal in Singapore generally, it is still essential to choose a reputable and compliant PEO service provider in Singapore to ensure that all legal requirements and regulations are followed on an ongoing basis. Due diligence in selecting a PEO is crucial to avoid any potential legal issues and to ensure a smooth and compliant employment process in Singapore.

Singapore PEO
What is a Singapore PEO

Singapore PEO Services

Singapore PEOs offer an array of services to support foreign workers and businesses operating within the country. These services include:

  1. HR and Benefits Management: Comprehensive HR offerings, including benefits administration, resolution of HR issues, and compliance with Singaporean labor laws.

  2. Payroll and Tax Administration: PEOs handle payroll processing and tax witholding, ensuring timely payments and deductions in line with Singaporean regulations (including the Central Provident Fund).

  3. Legal Compliance: PEOs provide expertise in the complex legal landscape in Singapore to ensure your company remains compliant with local labor laws. In many cases, a PEO will act as the Singapore Employer of Record and legally employ local staff. 

  4. Recruitment Services: Many PEOs offer recruitment services, assisting companies in sourcing and hiring, and onboarding new employees in Singapore.

  5. Risk Management: PEOs help manage the risks associated with employing staff in a foreign country, including dealing with employment disputes and ensuring workplace health and safety.

Benefits of a Singapore PEO

Engaging a Singapore PEO can offer several advantages for foreign companies:

  1. Ease of Market Entry: PEOs provide a streamlined way for foreign companies to start operating in Singapore without the need to establish a legal entity. This saves companies around 85 percent of the cost of international expansion, compared to local company incorporation. 

  2. Cost-Effective: By managing many of the administrative tasks associated with employing staff, PEOs can help reduce overheads, enabling companies to focus on their core business operations.

  3. Regulatory Compliance: With their expertise in Singaporean labor laws, PEOs help ensure your company stays compliant, avoiding fines and legal issues (that may arise due to mishandling of Central Provident Fund contributions, for example).

  4. Access to Local Expertise: PEOs have a deep understanding of the Singaporean market, culture, and business practices, which can be invaluable for foreign companies.

  5. Risk Mitigation: PEOs help manage the risks associated with employing staff in a foreign country, providing an added layer of protection for your company.

Disadvantages of a Singapore PEO

Despite the numerous advantages, there are potential challenges associated with hiring a Singapore PEO:

  1. Loss of Autonomy: While the client company maintains control over day-to-day employee management, many HR decisions are delegated to the PEO, which may create a perception of reduced control.

  2. Initial Costs: While PEOs often prove cost-effective in the long term, the initial financial outlay can serve as a deterrent for some businesses.

  3. Dependency on PEO Performance: The effectiveness of the partnership hinges on the PEO’s performance. If the PEO fails to fulfill its responsibilities, it can pose significant challenges for the client company.

Factors to Consider When Engaging a Singapore PEO

FactorDescription
Company size and needs
Analyze your current resources and staffing to determine if HR tasks can be handled in-house or if outsourcing through a PEO would be more efficient. Consider your growth plans and how a PEO can support scaling up.
Industry and employment requirements
Choose a PEO with expertise in your specific industry and experience managing the types of employment arrangements you need, such as contract workers, foreign hires, or remote teams.
Services offered and pricing structure
Compare the range of HR services offered by different PEOs, including payroll, benefits administration, compliance support, and talent management. Analyze pricing models (per-employee, flat fee, etc.) to find the one that best aligns with your budget and needs.
Technology and platform
Evaluate the PEO’s technology infrastructure and platform for user-friendliness, accessibility, and security. Assess how well it integrates with your existing HR systems and tools.
Reputation and track record
Research the PEO’s reputation in the industry, client testimonials, and experience in Singapore. Check for any legal or compliance issues in their past.
Customer service and communication
Ensure the PEO offers responsive and personalized customer service through multiple channels (phone, email, live chat, etc.). Assess their communication style and ability to keep you informed about important updates.
Cultural fit and values alignment
Choose a PEO whose company culture and values resonate with your own. This will lead to better collaboration and alignment in managing your workforce.
Scalability and flexibility
Consider the PEO’s ability to adapt to your changing needs as your business grows. Ensure they offer flexibility in service packages and can adjust to new workforce dynamics.

5 Best Singapore PEOs

Here are five of the top PEOs operating in Singapore:

  1. Horizons is a global PEO with extensive experience in providing HR solutions in Singapore. Their services encompass recruitment, payroll, compliance, and more. Originally founded in Singapore, Horizons has a deep insight into Singapore hiring and local laws.

  2. Skuad is known for its innovative platform which simplifies hiring, managing, and paying teams in Singapore. Skuad offers HR functions, payroll, benefits administration, tax compliance, advice on Singapore labor laws, and risk management services. 

  3. Multiplier is known for its market-leading platform that allows businesses to easily manage and pay global teams, including those in Singapore. They cover everything from legal compliance to benefits administration. Read more about their offerings in our 2024 Multiplier Review.

  4. Deel is a global payroll and compliance platform that simplifies the process of hiring and managing teams in Singapore. They handle everything from HR functions to payroll and benefits administration. Read more about the comprehensive Deel HR platform in our 2024 Deel review

  5. Remote offers global employment solutions, including comprehensive PEO services in Singapore. The Remote platform enables businesses to manage international teams, taking care of legal compliance, payroll, and benefits.

These PEOs have a strong reputation for their services and expertise in Singapore. However, it’s vital to conduct thorough research and choose the PEO that best aligns with your business’s unique needs and objectives.

Is a Singapore PEO the same as a Singapore Employer of Record?

Yes, most providers use the terms Singapore PEO and Singapore Employer of Record (EOR) interchangeably. Both terms refer to companies that assist businesses in Singapore with HR and payroll, including paying local staff, compliance, and managing local employment responsibilities for staff.

These organizations essentially act as an intermediary, allowing companies to engage and manage employees in Singapore without establishing their own legal entities in the country. The specific services offered may vary between providers, but the core function of both PEOs and EORs in Singapore is to help foreign companies navigate local employment regulations and obligations.

Do Singapore PEOs Help with Employment Contracts?

Yes, Singapore PEOs often assist with employment contracts. Generally the Singapore PEO will create draft employment contracts for their clients’ employees in Singapore.

Here’s how Singapore PEOs typically help with in creating a watertight employment contract:

  1. Drafting and Customization: PEOs can assist in drafting employee contracts that comply with Singaporean employment laws while also addressing specific terms and conditions agreed upon between the employer and employee (including whether it is a fixed term contract and provision of certain benefits, such as medical insurance).

  2. Legal Compliance: PEOs are knowledgeable about local employment laws and regulations in Singapore. They ensure that the written employment contract meets legal requirements and include necessary clauses, such as those related to termination, notice period, working hours, and benefits as expected for all Singapore employees.

  3. Translation: If necessary, PEOs can provide translation services to ensure that employment contracts are available in both English (often the primary business language in Singapore) and any other languages required by the employees.

  4. Updates and Revisions: PEOs can help in updating and revising employment contracts as needed to reflect changes in employment terms, legal requirements, or company policies.

  5. Contract Management: PEOs may also maintain records of employment contracts and assist with contract renewals, extensions, or terminations as per the agreed-upon terms.

Video: Understanding Singapore Employment Contracts

How PEOs Help with Singapore Labor Law Compliance

Singapore PEOs ensure full compliance with local labor and tax laws this includes: 

  • Social security contributions. Singapore PEOs ensure that the necessary contributions are made to the Central Provident Fund to cover retirement, healthcare and disability needs. 
  • Minimum wage. While there is no universal minimum wage in Singapore, a PEO will ensure that employees receive minimum wage in those industries where it is mandatory
  • Visas. A Singapore PEO will ensure that foreign employees needing work permits have a valid Employment Pass
  • Leave. All employees must receive their leave entitlements under the law, including paid maternity leave for female employees

Singapore PEOs provide invaluable services for foreign companies looking to establish a presence in the Singaporean market. They offer a full range of HR services and possess expert knowledge of the Singaporean labor market, significantly simplifying the process of expanding into Singapore.

Our pick for the top Singapore PEOs in 2024 are Horizons, Skuad, Multiplier, Deel and Remote

Singapore PEOs — choose wisely

FAQs

A Singapore PEO can manage all aspects of HR, payroll, and compliance, allowing a foreign company to focus on their core business activities. By acting as a co-employer, the PEO eliminates the need for the company to establish a legal entity in Singapore.

Yes, Singapore PEOs handle all aspects of payroll and tax administration, including processing payroll, managing tax deductions, and ensuring compliance with Singapore tax laws.

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