Singapore is the gateway to Asia for a reason: English is the language of business, the legal system is transparent and pro-employer, payroll rules are clear, and the whole country runs on one national framework rather than the province-by-province patchwork you find in Canada. For a US or European company building an APAC presence, it's one of the easiest places in the region to hire compliantly — once you understand the handful of rules that work nothing like home.
This guide covers what a global team actually needs to know to employ someone in Singapore in 2026 — statutory leave, the CPF system, the Skills Development Levy, how income tax works (you don't withhold it), the work pass a foreign hire needs, and the termination rules — plus the two routes to getting it done: incorporating your own Singapore company, or using an employer of record (EOR) like Deel that already has one.
Singapore Employment at a Glance (2026)
Figures reflect 2026 rules and are in Singapore dollars. Rates and salary thresholds are reviewed regularly — always confirm current numbers against MOM, the CPF Board, and IRAS before running payroll.
Two Ways to Hire in Singapore: Entity vs. Employer of Record
Before the compliance detail matters, you face one structural decision: do you become a Singapore employer yourself, or does someone do it for you?
| Factor | Your own Singapore entity | Employer of record (EOR) |
|---|---|---|
| Time to first hire | Weeks (ACRA incorporation + local director + CPF/IRAS setup) | A few days |
| Who is the legal employer | You | The EOR's Singapore entity |
| Local director required | Yes — at least one resident director | No |
| Upfront cost | ~$315 ACRA fees + corporate-services & setup | None — pay a per-employee monthly fee |
| Best for | Scaling a permanent Singapore team | 1–2 hires, market testing, speed |
Incorporating a private limited company with ACRA is quick and cheap on paper — government fees are about $315 — but it comes with a structural catch for foreign companies: a Singapore company must have at least one locally resident director (a citizen, PR, or eligible pass holder), plus a company secretary. You'll also register as an employer with the CPF Board and with IRAS. For a company with no one on the ground yet, the resident-director requirement alone often pushes the first hire toward an EOR.
An employer of record flips the model. The EOR already operates a Singapore entity and becomes the legal employer of your worker — running compliant payroll, CPF, the SDL, leave, and a local employment contract — while you direct the day-to-day work. You skip incorporation and the resident-director requirement entirely and can be live in days, which is why most teams making their first one or two Singapore hires start here and only incorporate once headcount justifies it.
Statutory Annual Leave and Public Holidays
Singapore's statutory leave is generous compared with the US — which guarantees no paid vacation at all by federal law — but modest by global standards. Under the Employment Act, an employee with at least 3 months of service earns 7 days of paid annual leave in the first year, rising by one day for each additional year of service to a cap of 14 days from the eighth year onward.
| Year of service | Statutory annual leave |
|---|---|
| 1st year | 7 days |
| 2nd year | 8 days |
| 3rd year | 9 days |
| …rising by 1 day/year… | … |
| 8th year onward | 14 days (cap) |
On top of leave, Singapore has 11 paid public holidays a year. If a public holiday falls on a rest day, the next working day becomes the holiday; if it falls on a day the employee doesn't normally work, they get an extra day off or an extra day's pay in lieu. Because the statutory floor is relatively low, most employers offer above it — 14 to 21 days from the start is common in competitive sectors — so benchmark against the market, not just the minimum.
CPF: The Payroll Rule That Surprises Everyone
The Central Provident Fund (CPF) is Singapore's mandatory social-security savings scheme, and it's the single biggest payroll difference for a foreign employer — for two reasons.
First, the rates are high. For an employee aged 55 or below, the employer contributes 17% and the employee contributes 20% — a combined 37% — on wages up to the Ordinary Wage ceiling, which rose to $8,000 per month in 2026 (with an overall annual ceiling of $102,000 including bonuses). That puts the maximum employer CPF cost at about $1,360 a month per employee. Contribution rates step down for older age bands, and the senior-worker rates rose again on 1 January 2026.
Second — and this is the part that trips people up — CPF applies only to Singapore Citizens and Permanent Residents. You do not pay CPF for foreign employees on an Employment Pass, S Pass, or Work Permit. So your payroll cost for a local hire and a foreign hire on the same salary can differ substantially.
The Skills Development Levy (SDL)
Separate from CPF, employers pay a Skills Development Levy on all employees — including foreigners. It's small: 0.25% of monthly wages, with a minimum of $2 and a maximum of $11.25 (the cap is reached at $4,500 of monthly wages). The CPF Board collects it on behalf of SkillsFuture Singapore. It's easy to overlook precisely because it's minor, but it applies to your whole headcount.
Income Tax: You Don't Withhold It
Here's the rule that runs opposite to the UK and Canada. Singapore has no monthly PAYE-style withholding for local employees. You don't deduct income tax from each paycheque — employees file and pay their own tax directly to IRAS once a year. Resident tax rates are progressive, starting at 0% on the first $20,000 of chargeable income and rising to a top rate of 24% on income above $1 million.
What the employer owes is reporting, not withholding:
- Form IR8A — an annual return of each employee's remuneration, due by 1 March. Employers with 5 or more employees must submit it electronically through the Auto-Inclusion Scheme (AIS), which pre-fills the figures into employees' tax returns.
- Tax clearance (Form IR21) — the one genuine withholding duty. When a foreign employee leaves, the employer must file IR21 at least one month before their last day and withhold any final monies due until IRAS issues a clearance directive. Miss this and the employer can be personally liable for the unpaid tax.
Non-residents are taxed differently — employment income is taxed at a flat 15% or the resident rates, whichever produces more tax.
Hiring a Foreigner: Work Passes
If your hire isn't a citizen or PR, they need an employer-sponsored work pass before they can start — and the employer is the sponsor. The two that matter for most professional roles:
| Pass | For | Minimum monthly salary (2026) |
|---|---|---|
| Employment Pass (EP) | Professionals, managers, executives | From $5,600 (rising with age to $10,700; $6,200–$11,800 in financial services) |
| S Pass | Mid-skilled staff | From $3,300 (plus a $650/mo foreign worker levy) |
The Employment Pass also has to clear COMPASS, a points-based framework (introduced in 2023) that scores the candidate and your firm on salary, qualifications, workforce diversity, and support for local employment — an applicant needs 40 points to qualify. In practice this means you can't simply meet the salary floor; the points have to add up. Employers must also advertise the role on MyCareersFuture and fairly consider local candidates first. Salary thresholds held steady into 2026 (the next scheduled increase is January 2027), but treat the pass process as the real timeline driver when hiring a non-Singaporean.
Family Leave: Generous, and Getting More So
Singapore's parental-leave system is comparatively strong, and it's expanding in 2026 — but note that most benefits hinge on the child being a Singapore citizen. The headline entitlements:
- Government-Paid Maternity Leave: 16 weeks for a Singapore-citizen child (12 weeks under the Employment Act if the child isn't a citizen).
- Government-Paid Paternity Leave: 4 weeks, made fully mandatory from April 2025 (up from 2 weeks).
- Shared Parental Leave: a newer scheme of government-paid leave the parents share — 6 weeks for births before 1 April 2026, rising to 10 weeks for births on or after that date. This is additional to maternity and paternity leave.
- Childcare leave: 6 days a year per parent for a citizen child under 7.
For a birth from April 2026, that's up to 30 weeks of government-funded parental leave across both parents — well beyond US norms. The government funds most of it, but the employer administers the leave and pays it out before being reimbursed within the statutory caps.
Termination and Notice
Singapore is not at-will, but it is far more flexible — and cheaper — than Canada or the UK. Either party can end the employment by giving the notice set in the contract, or, if the contract is silent, the Employment Act's default scale applies:
| Length of service | Default notice |
|---|---|
| Less than 26 weeks | 1 day |
| 26 weeks to under 2 years | 1 week |
| 2 to under 5 years | 2 weeks |
| 5 years or more | 4 weeks |
Either side can pay (or forfeit) salary in lieu of notice instead of working it. Crucially, there is no statutory severance or retrenchment pay mandated by law — a major contrast with Canada's notice-plus-severance regime. Retrenchment benefit is contractual and norms-based; the tripartite guideline suggests roughly two weeks to one month of pay per year of service for employees with at least two years of service. Employers with 10 or more staff must notify MOM within five working days of informing any employee of a retrenchment, and dismissed employees can bring a wrongful-dismissal claim through the Tripartite Alliance for Dispute Management and the Employment Claims Tribunals.
How Deel Handles Singapore Hiring
If you're hiring one or a handful of people in Singapore and don't want to incorporate or appoint a local director, this is exactly the problem an employer of record solves. Deel operates its own Singapore entity and employs your worker on your behalf, so the CPF, SDL, IR8A reporting, leave administration, and work-pass complexity above becomes its responsibility rather than yours.
Specifically for Singapore, Deel runs compliant monthly payroll, calculates and remits CPF for citizens and PRs and the SDL for everyone, handles IR8A filing and IR21 tax clearance, administers statutory and parental leave, and issues an Employment-Act-compliant contract with itemised payslips. It can also sponsor and manage Employment Pass applications through its local entity — the step that otherwise gates a foreign hire. With the entity already in place, onboarding takes days rather than the weeks an incorporation-and-setup build would require.
Hire your first Singapore employee without incorporating
Deel's Singapore entity handles CPF, the SDL, IR8A/IR21, leave, payslips, and even Employment Pass sponsorship — so you can onboard in days instead of setting up a company and finding a local director.
See how Deel hires in Singapore →Deel isn't the only option — it competes directly with Remote.com and others in the EOR space, and the right pick depends on your country mix, headcount, and budget. We break down the leading providers side by side in our Deel vs. Remote.com comparison. To see how Singapore's leave compares globally, see annual leave around the world, or our guides to hiring employees in Australia and hiring employees in the UK for other markets.
Frequently Asked Questions
How much annual leave do employees get in Singapore by law?
Under Singapore's Employment Act, an employee with at least 3 months of service earns 7 days of paid annual leave in the first year, rising by one day per year of service to a cap of 14 days from the eighth year. This is modest by global standards but more than the US, which has no federal minimum. Employers commonly offer more than the statutory floor to stay competitive.
Does CPF apply to foreign employees in Singapore?
No. CPF contributions are only required for Singapore Citizens and Permanent Residents — not for foreigners on an Employment Pass, S Pass, or Work Permit. For employees aged 55 and below, the employer contributes 17% and the employee 20% on wages up to the Ordinary Wage ceiling of $8,000 a month in 2026. The Skills Development Levy, by contrast, is payable on all employees including foreigners.
Do employers withhold income tax in Singapore?
Not monthly. Singapore has no PAYE-style monthly withholding for local employees — they file and pay their own income tax to IRAS each year. Employers instead report each employee's pay annually via Form IR8A (electronically through the Auto-Inclusion Scheme if they have 5 or more employees). The one withholding duty is tax clearance: for a departing foreign employee, the employer files Form IR21 and withholds final monies until IRAS clears the tax.
Do I need a work pass to hire a foreigner in Singapore?
Yes. A non-Singaporean needs an employer-sponsored work pass. Professionals need an Employment Pass, which in 2026 requires a minimum monthly salary starting at $5,600 (rising with age to $10,700, and higher in financial services) and must also pass the points-based COMPASS framework. Mid-skilled workers use the S Pass, which carries its own salary floor and a monthly foreign worker levy.
Is there statutory severance pay in Singapore?
No. Singapore does not mandate statutory severance or retrenchment pay by law. Termination follows the notice period in the contract, or the Employment Act default scale (from one day to four weeks based on length of service), with salary in lieu of notice permitted. Retrenchment benefit is contractual and norms-based — the tripartite guideline is roughly two weeks to one month of pay per year of service for employees with at least two years of service. This is far more flexible and lower-cost than Canada or the UK.
Do I need a Singapore company to hire an employee there?
No. You can incorporate a private limited company with ACRA (which requires at least one locally resident director) and run payroll yourself, or use an employer of record that already has a Singapore entity and legally employs the worker for you. An EOR lets you hire in days without incorporating or appointing a local director, and reduces permanent-establishment tax risk; an entity makes more sense once you're building a permanent local team.