Singapore: a vibrant city-state where futuristic skyscrapers meet lush green spaces, and where business opportunities are as abundant as the delicious street food. It’s no wonder that companies from all over the world are eager to tap into Singapore’s dynamic workforce and strategic location. But before you start dreaming of your team’s first celebratory dinner at a hawker centre, there’s a crucial question to answer: how do you actually hire employees in Singapore?

On the surface, it might seem as simple as posting a job ad and waiting for the resumes to roll in. But as any seasoned global employer will tell you, hiring in a new country is rarely that straightforward. Singapore, with its robust economy and pro-business environment, also has its own set of local labour laws, payroll requirements, and tax regulations. Navigating these rules isn’t just a matter of ticking boxes, it’s about ensuring your business stays compliant, your employees are paid correctly, and your operations run smoothly from day one.

Setting up a legal entity in Singapore can be a rewarding step, but it’s not without its challenges. The process can take time, involve a fair amount of paperwork, and require ongoing administrative attention. From registering your business and opening local bank accounts to understanding the intricacies of Central Provident Fund (CPF) contributions and annual tax filings, the to-do list can quickly grow longer than a Singaporean MRT map. For many companies, especially those looking to test the waters or scale quickly, this can feel overwhelming, if not downright daunting.

But what if there was a way to bypass the red tape and get straight to what matters most: building your dream team in Singapore? Enter the Employer of Record (EOR) solution, a modern approach that’s changing the way companies hire globally. With an EOR, you don’t need to open a local branch or subsidiary. Instead, you can engage top talent in Singapore quickly and efficiently, all while staying compliant with local employment laws. Think of it as having a local HR expert in your corner, handling the nitty-gritty details so you can focus on growing your business.

In this blog, we’ll take you on a journey through the ins and outs of hiring in Singapore. Whether you’re a startup looking to make your first international hire or a multinational expanding your APAC footprint, we’ll break down the key steps, highlight common pitfalls, and show you how an EOR can make the process not just easier, but actually enjoyable.

What Is An Employer Of Record In Singapore

An Employer of Record in Singapore is a third-party organization that becomes the legal employer of a worker on behalf of another company. The EOR manages all employment responsibilities, while the client company directs the employee's daily tasks and performance.

In Singapore's employment framework, the EOR is recognized as the official employer in the eyes of the law. This means the EOR handles all compliance with the Employment Act, Central Provident Fund (CPF) contributions, and other statutory obligations.

The core functions an EOR manages include:

  • Employment contracts and onboarding

  • Monthly payroll processing

  • CPF and tax contributions

  • Statutory leave and benefits administration

  • Termination procedures

The EOR creates a three-way relationship between itself, the client company, and the employee. While the EOR is the legal employer, the client company manages the employee's work, and the employee performs duties for the client company under this arrangement.

An EOR differs from other employment solutions in Singapore:

  • EOR: Fully employs the worker and assumes all legal responsibilities

  • PEO: Typically co-employs staff alongside the client company

  • Staffing Agency: Supplies temporary workers for specific projects

Why Choose An EOR Singapore Over A Local Entity

Using an Employer of Record in Singapore allows a company to hire employees without creating a local business entity. This approach simplifies the hiring process compared to setting up a subsidiary, which involves registration, licensing, and ongoing compliance with corporate regulations.

The EOR becomes the legal employer and takes on employment-related responsibilities while the client company continues to manage the employee's daily work. This structure offers a different path to market entry with several key advantages.

Reduced Administrative Overhead

An EOR manages all employment compliance based on Singapore's labour laws, including monitoring updates to the Employment Act and ensuring all employment practices follow current regulations.

The administrative tasks handled by an EOR include:

  • Documentation Management: Preparing and maintaining employment contracts, tax forms, and work pass applications

  • Compliance Monitoring: Staying current with Singapore's evolving employment regulations

  • Daily HR Administration: Processing payroll, tracking leave, and administering benefits

This comprehensive management eliminates the need for companies to build internal HR processes specific to Singapore.

Faster Market Entry

Setting up a business entity in Singapore typically takes 2-3 months due to registration, licensing, and banking requirements. In contrast, an EOR can begin onboarding employees within days or weeks.

Once the EOR agreement is in place, companies can start hiring immediately. This allows for faster access to local or foreign talent without waiting for entity establishment.

Business operations can continue without interruption while the EOR manages employment logistics in the background, supporting project timelines and hiring plans without delay.

Lower Upfront Costs

The financial benefits of using an EOR include:

  • Eliminated Setup Costs: No capital investment, legal fees, or administrative setup costs required for entity creation

  • Reduced Ongoing Expenses: No need for office space, local administrative staff, or corporate filings

  • Focused Resource Allocation: Resources can be directed toward business development or team growth instead of entity management

Key Compliance Points For A Singapore Employer Of Record

An Employer of Record in Singapore manages several critical compliance areas to ensure adherence to local employment laws. These include mandatory retirement contributions, proper employment contracts, and statutory leave entitlements.

Central Provident Fund Contributions

The Central Provident Fund (CPF) is Singapore's mandatory retirement savings scheme that requires contributions from both employers and employees. For Singaporean citizens and permanent residents, employers contribute up to 17% of monthly wages, while employees contribute up to 20%, depending on age and wage level.

CPF contributions are calculated based on ordinary wages, which include base salary and regular allowances. These contributions must be submitted monthly by the 14th day of the following month to avoid penalties.

The CPF Board monitors compliance closely, and late or incorrect submissions can result in financial penalties and enforcement actions against employers.

Employment Contracts And Probation

Employment contracts in Singapore must include specific terms required by the Employment Act:

  • Job title and description

  • Salary and payment schedule

  • Working hours and overtime arrangements

  • Leave entitlements

  • Notice periods for termination

  • Employment status (full-time, part-time, or fixed-term)

Probation periods typically range from three to six months, during which notice periods for termination may be shorter. However, all other employment protections still apply during probation.

Different employment categories have varying contract requirements. For example, employees earning more than S$4,500 per month have different entitlements under the Employment Act compared to those earning less.

Statutory Leave Requirements

Singapore's employment law mandates several types of leave entitlements:

  • Annual Leave: Minimum 7 days for the first year, increasing with length of service

  • Sick Leave: 14 days of outpatient leave and 60 days of hospitalisation leave after 3 months of employment

  • Parental Leave: 16 weeks of maternity leave, 2 weeks of paternity leave, and shared parental leave options

  • Public Holidays: 11 gazetted public holidays annually

If an employee works on a public holiday, the employer must provide either an extra day's pay or a substitute day off. These requirements are strictly enforced, and EORs ensure full compliance with all leave regulations.

Payroll And Tax Essentials With Employer Of Record Companies In Singapore

Employer of Record companies in Singapore manage all financial aspects of employment, ensuring compliance with local tax laws and payment regulations. This comprehensive management simplifies the employment process for foreign companies.

Monthly Payroll Cycles

Singapore operates on a monthly payroll cycle, with salaries typically disbursed by the last day of each month. EORs process these payments according to a fixed schedule, providing consistency for both employers and employees.

Salary structures in Singapore commonly include:

  • Basic Salary: The fixed monthly amount

  • Fixed Allowances: Transport, housing, or meal allowances

  • Variable Components: Performance bonuses or commissions

Payments are processed via direct bank transfer to the employee's local account, with detailed electronic payslips provided for record-keeping.

Income Tax Filing Obligations

EORs handle all tax responsibilities based on the employee's tax residency status. In Singapore, individuals are considered tax residents if they stay in the country for 183 days or more in a calendar year.

The tax filing process managed by EORs includes:

  • Annual IR8A Preparation: Issuing income statements to employees by March 1st each year

  • Tax Clearance: For departing foreign employees, filing the IR21 form at least 30 days before the final day of employment

  • Tax Payment: Ensuring all outstanding taxes are settled according to IRAS requirements

Singapore's personal income tax rates are progressive, ranging from 0% to 22% for residents, while non-residents are typically taxed at 15% or the resident rate, whichever is higher.

Common Deductions And Contributions

The primary mandatory deduction from employee salaries is the Central Provident Fund (CPF) contribution, which applies to Singapore citizens and permanent residents. The current CPF contribution rates are age-dependent, with higher rates for younger employees.

Other standard deductions may include:

  • Skills Development Levy: 0.25% of monthly wages, capped at S$11.25 per employee

  • Self-Help Group (SHG) Contributions: Voluntary community-based support programs

  • Union Fees: For employees who are members of trade unions

Steps To Hire Through An EOR In Singapore

The hiring process through an Employer of Record follows a structured approach that ensures compliance while simplifying the experience for both the company and the employee.

1. Provide Role Details And Compensation

The first step involves specifying the position requirements and compensation package. Companies need to provide:

  • Job Description: Title, responsibilities, reporting structure, and qualifications

  • Compensation Details: Base salary, allowances, and any performance-based components

  • Benefits Package: Both statutory benefits and any additional offerings

This information allows the EOR to prepare compliant employment contracts and ensure the compensation aligns with Singapore market standards.

2. Draft And Sign EOR Agreement

Once role details are finalized, the EOR prepares a service agreement outlining the terms of engagement. This agreement clearly defines:

  • Service Scope: The specific employment services the EOR will provide

  • Responsibility Division: What the EOR handles versus what the client company manages

  • Term and Termination: Contract duration and conditions for ending the relationship

After both parties sign the agreement, the EOR can begin the formal employment process.

3. Onboarding And Documentation

The EOR collects necessary documentation from the employee, including:

  • Identification (passport, NRIC)

  • Educational certificates

  • Employment history records

  • Banking information

For foreign employees, additional documents related to work pass applications are required. The EOR verifies all information and conducts background checks as needed.

The employee receives comprehensive orientation materials explaining company policies, payroll procedures, and benefits information to ensure a smooth transition.

4. Payroll Setup And Payment Schedule

The final setup step involves establishing the payroll process. The EOR configures:

  • Payment Details: Bank account information and payment method

  • Tax Status: Residency status and applicable tax rates

  • Contribution Eligibility: CPF and other statutory contribution requirements

Monthly payroll reports are provided to the client company, detailing salary breakdowns, tax withholdings, and all deductions for transparency and record-keeping.

Cost Considerations And Budgeting

Understanding the financial aspects of using an EOR in Singapore helps companies budget effectively for their expansion plans. The cost structure typically includes both initial and ongoing expenses.

Security Deposits And Upfront Fees

Many EOR providers in Singapore require a security deposit before beginning services. This deposit, often equivalent to one month's salary per employee, covers potential liabilities or early termination costs.

Setup fees typically range from S$500-2,000 per employee, covering initial documentation, contract preparation, and system configuration. These one-time costs vary based on the complexity of the employment arrangement.

Borderless AI operates without requiring security deposits or pre-funding, eliminating upfront capital requirements and improving cash flow for expanding companies.

Ongoing Monthly Costs

EOR service fees in Singapore follow two common pricing models:

  • Percentage-Based: Typically 5-10% of the employee's monthly salary

  • Flat-Rate: Fixed monthly fee per employee regardless of salary level

The total monthly cost includes both the EOR service fee and the employee's full compensation package (salary, statutory contributions, and benefits).

Companies with multiple employees may qualify for volume discounts, reducing the per-employee cost as the team grows.

Hidden Fees To Watch For

When evaluating EOR providers, companies should be aware of potential additional charges:

  • Termination Fees: Some EORs charge extra for processing employee departures

  • Additional Services: HR consulting or recruitment support often incurs separate fees

  • Currency Conversion: International payments may include exchange rate markups

Borderless AI uses transparent flat-rate pricing with no hidden fees, providing predictable monthly costs regardless of service utilization.

Work Passes And Foreign Talent Management

For companies hiring non-Singaporean employees, understanding work pass requirements is essential. An EOR manages the entire work authorization process, ensuring compliance with Singapore's immigration policies.

Employment Pass Requirements

The Employment Pass (EP) is designed for foreign professionals in managerial, executive, or specialized roles. Qualifying criteria include:

  • Minimum Salary: S$5,000 per month (higher for financial sector and older candidates)

  • Qualifications: University degree, professional certifications, or equivalent experience

  • Job Role: Position must match the candidate's qualifications and experience

The application process takes 3-8 weeks, and the EOR handles all documentation, submission, and follow-up with the Ministry of Manpower (MOM).

Common Alternatives And Eligibility

For mid-level skilled workers, the S Pass offers an alternative when EP requirements cannot be met. S Pass applicants must earn at least S$3,000 monthly and meet educational requirements. Companies are subject to quota limits and levies when hiring S Pass holders.

EntrePass is available for entrepreneurs establishing businesses in Singapore, requiring a viable business plan and meeting innovation criteria.

Renewal Considerations

Work passes require renewal before expiry, with EPs typically valid for 1-3 years and S Passes for 1-2 years. The renewal process should begin at least 3 months before expiration.

Any changes to the employee's role, salary, or employer must be reported to MOM, potentially requiring a new application rather than a simple update.

Improper handling of work passes can result in penalties for both the company and the employee, including fines up to S$10,000, pass revocation, and future hiring restrictions.

Experience Borderless AI's EOR Solution For Singapore

Borderless AI provides an AI-powered Employer of Record service for companies hiring in Singapore. The platform automates employment processes while maintaining full compliance with local regulations.

Unlike traditional EORs, Borderless AI processes payroll in real-time, transferring employee salaries in approximately 20 minutes compared to the industry standard of several days or weeks.

The service operates without security deposits or pre-funding requirements, allowing companies to engage employees immediately without capital lockup. Pricing follows a transparent flat-rate model with no hidden fees.

Employees benefit from a mobile-first experience through a dedicated app that provides access to pay information, support, and integrated banking features. The support team consists of college-educated professionals based in Toronto who specialize in global payroll and compliance.

To explore how Borderless AI can simplify hiring in Singapore without entity setup, companies can schedule a demonstration of the platform's capabilities.

FAQs About Employer Of Record In Singapore

How does an employer of record in Singapore handle employee benefits administration?

An EOR manages all statutory benefits like CPF contributions and leave entitlements, plus any additional benefits the client company wishes to offer employees.

What are the typical timeframes for setting up an employer of record arrangement in Singapore?

Most EOR providers can complete the setup process within 1-2 weeks, allowing companies to hire much faster than the 2-3 months required for entity establishment.

How do employer of record companies in Singapore ensure compliance with changing employment laws?

EORs employ legal specialists who monitor regulatory changes and automatically update employment practices to maintain compliance without client intervention.

What happens if an employee hired through an EOR in Singapore needs to be terminated?

The EOR handles the entire termination process according to Singapore law, including proper notice periods, final payments, and necessary documentation.

Can an employer of record in Singapore sponsor work visas for foreign employees?

Yes, established EORs can sponsor Employment Passes and other work visas for foreign talent, managing the entire application process and ongoing compliance requirements.