General Overview

Singapore, a global financial hub in Southeast Asia, boasts a robust and diverse economy driven by finance, technology, manufacturing, and trade. The city-state's strategic location and business-friendly environment have made it a focal point for international commerce. Singapore's labor laws are designed to balance economic growth with employee welfare, ensuring fair treatment and clear guidelines for both employers and employees.

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Employment Contracts

‍Written Contracts: While not mandatory, written employment contracts are highly recommended to clearly define terms and conditions, reducing potential disputes.

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Key Inclusions: Contracts typically specify job scope, salary, working hours, leave entitlements, and termination conditions.

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Probation Period

Duration: Commonly ranges from 3 to 6 months, allowing employers to assess an employee's suitability for the role.‍

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Termination During Probation: Either party can terminate the employment with notice, as stipulated in the contract, usually ranging from 1 day to 1 week.

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Working Hours

Standard Workweek: Up to 44 hours.

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Overtime:

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• Eligibility: Applicable to non-managerial and non-executive employees earning up to SGD 2,600 monthly.
• Compensation: Overtime is paid at 1.5 times the hourly basic rate.
• Limit: A maximum of 72 overtime hours per month.

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Vacation Days

Annual Leave: Starts at 7 days for the first year of service, increasing by 1 day for each additional year, up to a maximum of 14 days.

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Public Holidays:

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• Observance: Employees are entitled to 11 paid public holidays annually.
• Work on Public Holidays: Employees who work on a public holiday are entitled to an extra day's salary or a substitute day off.

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Sick Leave

Eligibility: Employees are entitled to paid sick leave after 3 months of service.

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Entitlement:

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• Outpatient Sick Leave: Up to 14 days per year.
• Hospitalization Leave: Up to 60 days per year (inclusive of the 14 days outpatient sick leave).

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Certification: A medical certificate from a registered doctor is required.

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Wages and Salary Payment

Minimum Wage: Singapore does not have a universal minimum wage. However, certain sectors, such as cleaning and security, have Progressive Wage Models setting minimum pay levels.

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Salary Payment: Salaries must be paid at least once a month, within 7 days after the end of the salary period.

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Public Holidays

Singapore observes 11 public holidays annually, including:

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• New Year's Day: January 1
• Chinese New Year: Two days
• Good Friday: Date varies
• Hari Raya Puasa: Date varies
• Hari Raya Haji: Date varies
• Labour Day: May 1
• Vesak Day: Date varies
• National Day: August 9
• Deepavali: Date varies
• Christmas Day: December 25

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If a public holiday falls on a rest day (typically Sunday), the following Monday will be a paid holiday.

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Employer Taxes

Central Provident Fund (CPF) Contributions:

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• Rates: Employers contribute 17% of an employee's monthly wages to CPF for those up to 55 years of age.
• Contribution Ceiling: The CPF Ordinary Wage ceiling is SGD 6,800 per month as of January 1, 2024, and is set to increase to SGD 7,400 on January 1, 2025.

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Employee Taxes

CPF Contributions:

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• Rates: Employees contribute 20% of their monthly wages to CPF up to 55 years of age.

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Income Tax:

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• Rates: Singapore employs a progressive tax system, with rates ranging from 0% to 22% for residents, depending on income levels.

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Notice Period

During Probation: Typically ranges from 1 day to 1 week, as specified in the employment contract.

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Post-Probation:

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• Less than 26 weeks of service: 1 week's notice.
• 26 weeks to less than 2 years: 2 weeks' notice.
• 2 years or more: 4 weeks' notice.

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These are minimum requirements; contracts may stipulate longer notice periods.

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Termination and Severance Pay

Termination:

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• Without Notice: Permissible in cases of misconduct, following due inquiry.
• With Notice: Either party can terminate the employment by providing the required notice or paying salary in lieu of notice.

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Severance Pay: Not mandated by law.