This is the second part of our ultimate guide to hiring employees in Singapore. In our last part we went over the basics and the legislation that guides the whole process here in Singapore. In this part we want to further explain what you need to do if you’re trying to hire local and/or foreign employees for your company here in Singapore.
So you’ve find the perfect people you would like to hire, now it comes down to the nitty gritty. What are the things you need to do or have to do to ensure that everyone is protected and gets the best out of their contract with you?
Reporting Earnings
As an employer you’re supposed to prepare tax forms for all your employees and you need to ensure that you report their pay packages and remuneration every year under the Income Tax Act.
The Central Provident Fund (CPF)
As a responsible employer, you need to ensure that for all your local employees, you need to make mandatory CPF contributions if a local Singaporean employee earns more than SGD 50 a month.
The maximum rate of contribution for employer and employee is 16% and 20% respectively and is varied by variables like employee age, PR status and a whole lot more.
What do you do when you want to hire students?
Students that are citizens or who have permanent residency statuses can be hired on a full time or part time basis without any restrictions placed onto them. They are also entitled to CPF contribution, unless they are exempted by certain restrictions.
You would not need to worry about CPF contributions if you are only hiring the students as interns. This is because they are only going through a training process in your business as part of their curriculum. Therefore, you should pay them a monthly allowance instead.
Contract Workers and/or Part Time Employees
A part time employee is someone who works less than 35 hours a week. Contract workers instead only work for a specified time frame and it will end when the job is completed.
One of the best parts about working in Singapore is that most of the part-time employees and contract workers enjoy very similar benefits as a full time employee. However, there is a way to have discussions and change up the terms of the contract with your employee.
One thing to note is that medical benefits usually don’t extend to part time or contract employees in Singapore.
What About The Legal Age?
In Singapore, the legal age to work in Singapore is that you have to be 17 years old or above to work.
You can employ someone younger, around the ages of 13 to 16 years old. There are restrictions on what types of work these younger employees can do.
The retirement age of people in Singapore is 62 years old.
Hiring foreign employees have been the trend because they seem to be easier to find and have a much wider skill set. Another reason is also due to the fact that Singapore’s economic growth has been so amazing that we just need more people and there isn’t enough local talent to compensate for the growing economy. Therefore, certain companies decide to go and hire foreign workers instead.
The Employment Act stipulates that a foreigner must have a valid work visa to work in Singapore. Therefore, if you’re an employer looking to hire a foreigner, you need to ensure that they either have a work pass or you would have to apply for a permit on their behalf before they can come and work for you.
These are the 3 passes that will be available to you when you decide to hire foreign employees. Please note that they are all very different and you should visit the Singapore Work Permit Schemes webpage to learn more about them!
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