The Smartest Way to Hire Employees in Singapore (2025 Guide)

Singapore has firmly established itself as a global hub for talent and business, especially within Southeast Asia. Its business-friendly tax framework featuring a 17% corporate tax rate, no capital gains tax, and over 80 international tax treaties not only reduce the cost of hiring. 

The country has also maintained a top 3 ranking for the past 13 years global ease of doing business (Ease of Doing Business in Singapore). From an employer’s perspective, Singapore offers several advantages.

There is no mandated 13th-month salary. CPF contributions are only required for citizens and permanent residents, which gives companies greater flexibility in workforce planning and payroll management.

That said, to hire employees Singapore is not an easy task and still comes with its own set of regulatory requirements. 

From CPF contributions and tax compliance to visa sponsorship and employee classification, the rules are well-defined but can be complex. For businesses without a local legal entity, navigating this landscape can lead to operational and legal hurdles.

This blog reveals everything you need to know about hiring in Singapore right from employment laws to hiring models.

How to Hire Employees in Singapore? 

There are three primary options global employers can consider: 

1. Setting up a local entity
2. Partnering with local HR/payroll providers
3. Working with an Employer of Record (EOR)

#1 Setting up a local legal entity

The traditional route to hiring in Singapore is setting up a local legal entity in the form of a private limited company. Private companies in Singapore have the suffix Pte Ltd and need to be registered with the Accounting and Corporate Regulatory Authority (ACRA).

How to set up a local legal entity:

• Registration process: You must appoint a local director, register a business address, and open a local bank account in Singapore.
• Time to launch: Typically takes two to four weeks to register and become operational.
• Costs: Includes incorporation fees, legal services, local director fees, and ongoing admin costs (e.g., accounting, audits, tax filings).
• Compliance: You’re responsible for all local employer obligations, payroll, CPF contributions, tax withholding, statutory leave, and more.
• Best suited for: Companies with a long-term business strategy in Singapore, planning to build larger teams or operate as a local business.

#2 Working with local HR/payroll providers

Some companies choose to partner with local payroll or HR outsourcing firms since it simplifies employment management tasks like contracts, international employee salary payments, and compliance filings.

If your business already has (or is in the process of setting up)a legal entity in Singapore, this approach can help ease day-to-day operations. 

Local HR/payroll providers typically handle:

• Monthly payroll processing and CPF filings via the CPF portal
• Draft compliant employment contracts in line with Ministry of Manpower (MOM) requirements
• Filing income tax reports with IRAS (e.g., Form IR8A, Appendix 8A)

However, be informed that this option is not a workaround for companies looking to hire international employees without a local presence. You still need to register a legal entity in Singapore to employ staff directly. Their scope of work is limited to assisting you with back-office tasks.

#3 Hiring through an Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that legally employs talent in Singapore on your behalf. You manage the day-to-day responsibilities and performance of your team, while the EOR handles all local employment obligations such as: .

• Onboarding employees in full compliance with Singapore’s Employment Act
• Managing employment contracts, payroll, CPF contributions, and tax withholdings
• Sponsoring and renewing work visas (like EP or S Pass) for eligible foreign employees
• Offering localized benefits and ensuring adherence to labor regulations

Why EOR is considered to be best option of the three:

• No need to establish a local entity, which means you can start hiring in days, not weeks
• Reduced risk of non-compliance with local and complex employment laws
• Easily scalable: hire one person or build a full team, then scale dynamically easily
• Ideal for testing new markets, launching pilot projects, or expanding quickly with minimal red tape

An EOR like Tarmack makes it possible to tap into Singapore’s talent pool without the administrative burden or cost of incorporation. 

Here is a tabular comparison that summarises the key pointers of all the three approaches:

Key Requirements for Hiring in Singapore

Singapore is one of the countries where law and regulations are imposed with a tenacity that is rarely seen anywhere else on the globe. Failing to comply with the country’s employment regulations and statutes can result in hefty fines, legal disputes, or even cancellation of work permits.

It is not just safe, but also mandatory that you have a good grip on these rules and regulations if you choose to hire in Singapore.

Adherence to employment laws and employee rights

Singapore’s employment framework is primarily governed by the Employment Act. It sets out the minimum terms and working conditions for employees earning up to SGD 4,500/month (for manual laborers and workmen) and SGD 2,600/month (for non-workmen). 

This group is covered under Part IV of the Act, which mandates rest days, working hours, and overtime pay. However, if your hire earns more or is in a professional role like tech, marketing, or consulting, you’ll need to spell out those terms clearly in the contract. The Act won’t automatically protect them.

Key employment terms to keep in mind:

Working hours

• Maximum 44 hours per week; overtime must be compensated at 1.5x the hourly basic rate.

Paid leave entitlements:

• 7 to 14 days of annual leave (based on tenure)
• 14 days of paid sick leave (or up to 60 days with hospitalization)
• 16 weeks of paid maternity leave and 2 weeks of paid paternity leave

Termination and notice periods:

• These vary by contract length and tenure, but must follow statutory guidelines and include fair dismissal practices.

Remember, hiring in Singapore is contract-driven, especially if your employees fall outside Part IV. That’s where a local EOR like Tarmack steps in. We ensure every contract is compliant, airtight, and customized for your workforce, so you never leave room for error.

Mandatory CPF contributions and social security

The Central Provident Fund (CPF) is a mandatory social security savings scheme for Singapore Citizens and Permanent Residents. It funds retirement, housing, and healthcare needs.Foreign employees on work passes (EP, S Pass, Work Permit) are not subject to CPF.

Employer CPF obligations include:

• Up to 17% of monthly wages (for employees aged 55 and above) 

Wage ceilings:

• SGD 7,400/month for Ordinary Wages (new as of Jan 2025)
• SGD 102,000/year for Total Annual Wages

Filing deadline: 

• CPF payments must be made by the 14th of the following month via the CPF portal.

Procuring work visa and permits

To hire foreign employees who are not Singapore citizens or PRs, employers must apply for the appropriate work passes. The type of pass depends on the employee’s role, qualifications, and salary.

Common work permits include:

• Employment Pass (EP): For professionals earning at least SGD 5,000/month with acceptable qualifications and relevant experience
• S Pass: For mid-level skilled workers earning at least SGD 3,150/month
• Work Permit: For semi-skilled or unskilled workers, typically in sectors like construction or domestic work
• Overseas Networks & Expertise (ONE) Pass: For senior professionals earning SGD 30,000/month or more, typically in leadership or niche roles

Only companies registered in Singapore can sponsor these passes, making it impossible for foreign employers to apply without a local entity.

Because of strict scrutiny and evolving eligibility criteria, visa applications can be complex and time-sensitive. Common rejections happen due to quota limits, role misalignment, or incomplete documentation. Processing times typically range from 3–8 weeks, and fees vary between SGD 105–225 depending on the pass type.

An EOR like Tarmack removes this burden entirely, helping you secure the right talent without delays or compliance risks.

What Does It Cost to Hire in Singapore?

Hiring in Singapore includes several statutory contributions, visa costs, and hidden administrative expenses that can add up quickly.

Here’s a quick breakdown of what employers typically pay:

CPF contributions: For Singapore Citizens and PRs, employers must contribute up to 17% of monthly wages if the employee is under 55. Rates decrease for older employees (e.g., 9% for ages 60–65, 7.5% above 70).

Average salaries: A mid-level software engineer earns around SGD 6,000/month, though costs vary based on role and experience.

Work visa expenses: For foreign workers, employers cover S Pass levies (~SGD 550/month) and application fees (~SGD 105–225) depending on the pass type.

Insurance coverage: Under the Work Injury Compensation Act (WICA), employers must provide insurance for manual workers and S Pass holders. Most companies also offer group medical insurance for EP holders (typically SGD 100–200/month).

Other costs: Think onboarding support, employment contracts, HR software, and equipment provisioning. These often go unnoticed but can push month-one costs to SGD 7,000+ per hire.

Say you’re hiring a 32-year-old Singapore citizen software engineer at SGD 6,000/month. Add CPF (SGD 1,020), insurance (SGD 100), onboarding (SGD 300), and you’re at SGD 7,420/month, before bonuses or hardware.

For businesses without a local entity, this setup gets complicated fast.

That’s where an EOR like Tarmack simplifies it all, with one monthly invoice covering everything from CPF to compliance.

How Tarmack Helps You Hire Employees in Singapore with Ease

Whether you’re hiring your first employee in Singapore or building a local team, Tarmack handles the complexity so you stay focused on growing your business.

Local legal compliance

We ensure every hire aligns with Singapore’s strict CPF, tax, and labor laws, so you avoid fines and compliance gaps.

Fast onboarding and offboarding

Contracts issued, work passes submitted, and employees onboarded within a week. 

CPF and tax contributions, handled end-to-end

We calculate contributions, process monthly payments, and handle IRAS filings, accurately and on time.

Work visa sponsorship and management

Tarmack sponsors and manages Employment Passes, S Passes, and other work permits on your behalf, for your foreign national employees. 

Unlike global plug-and-play platforms, Tarmack is purpose-built for Singapore, offering faster onboarding, real local expertise, and full peace of mind.

Ready to explore Tarmack’s super-competitive pricing plans? Get a Quote.

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