With a population of under six million and a labor force participation rate of 68.6%, Singapore is fertile ground for expanding your business or hiring remote employees. But employing labor in Singapore can be tricky, especially if it’s your first time hiring there or your organization doesn’t have the resources or expertise to handle the complexities of global expansion. Working with an Employer of Record Singapore is the safer option for many companies.
Atlas reports that 30% of APAC countries use EOR services to tackle hiring problems, retain talent, and solve other international expansion challenges. Below, we explore the perks of using an employer of record Singapore, how it works, and crucial things to consider before investing in it.
Benefits of Using Employer of Record Singapore
As a third-party organization, a Singapore employer of record takes responsibility for hiring and paying staff on behalf of another company without flouting employment regulations. Singapore EOR services save you the stress of setting up a legal entity or immersing yourself in Singapore’s labor laws to avoid compliance issues. Such companies optimize HR teams in the following ways:
Hire local talent
Hiring local talent without a Singapore EOR service is complex. First, you’d have to establish a legal entity in Singapore, which takes several months or even years and costs a lot. You’ll also have to open local bank accounts, organize payroll and benefits, and create a legal team. Furthermore, you’ll need to get familiar with the country’s labor laws regarding compensation expectations, annual leave, overtime, salary, etc.
Let’s face it—it’s an overwhelming process that can lead to burnout if care isn’t taken, especially if you plan to do this in all the countries you want to hire from. But with an EOR Singapore, everything gets easier.
A Singapore worker record helps you source, hire, and support employees in a foreign country without having to set up a legal entity. They also draft employment agreements and manage your employees’ payroll, fringe benefits, claims, and expenses while you retain control and autonomy over your workforce in your base country.
Compliance
Navigating Singapore’s Employment Act, payroll systems and tax rules can be complex and lead to costly mistakes if not handled properly. What better way to solve this than collaborating with a company well-versed in Singapore labor regulations?
EOR services Singapore have adequate knowledge of the local employment laws businesses should obey for HR compliance. These include regulations regarding taxation, global payroll, benefits, intellectual property, and many others. By partnering with a Singapore EOR, your company will legally and efficiently engage with Singapore employees without violating labor laws.
Read next: Comprehensive Guide to Global HR Compliance
Risk mitigation
International hiring poses legal and compliance risk factors. Hence, it should be treated intricately without misunderstanding or ignorance to avoid severe penalties. For instance, misclassifying a full-time remote worker as an independent contractor is a breach of Singaporean employment laws and attracts penalties or fines.
EOR services Singapore mitigate these risks by assuming responsibility for legal compliance in the country. With them, you’re sure of accurate worker classification and the proper documentation of employment agreements. Besides the risk of misclassification, they also tackle employee disputes, terminations, precise payroll processing and compliance with local regulations.
Ultimately, this reduces your company’s legal and financial risks, giving you peace of mind and a fair and compliant workforce.
Cost effective
Using an EOR is cost-effective because it provides value for money. They offer international expansion without the need to establish a branch office or subsidiary company in Singapore. They also remove the burden of recurring administrative expenses, reducing your payroll processing and accounting costs.
Moreover, since the employer of record services Singapore will ensure your company complies with labor laws, you don’t need to worry about the risks of fines or other penalties that will demand money from your business. Indeed, they not only offer convenience but also provide a return on investment.
Focus on core business
Companies can regain significant operational time by outsourcing routine employment tasks and liabilities to Singapore EOR companies. Your EOR will handle all HR related tasks from onboarding new hires to offboarding existing staff. They’ll also protect your business from potential legal issues, letting you manage your time more efficiently and effectively.
This gives you enough time to focus on other crucial matters and develop your business while your company retains control over its daily operations.
How does Singapore EOR work?
An EOR in Singapore acts as the legal employer for your workforce. Here’s how it works:
1. Hiring process
Singapore’s employment law is based on several regulations, including:
- The Employment Act
- The Child Development Co-Savings Act
- The Employment of Foreign Manpower Act
- Work Injury Compensation Act, and
- The Workplace Safety and Health Act
Besides ensuring full compliance with these regulations, EOR Singapore helps you find the right candidates. Simply list your desired skills and qualifications in a candidate and your EOR services Singapore will assist in recruiting suitable talent.
Ultimately, they help you save the time, money, and effort you’d have spent on screening several applications to find the perfect match. And once they find a new hire, the employer of record Singapore also manages the onboarding process and prepares the necessary documentation.
2. Employment contract
After recruitment and hiring, the employer of record Singapore drafts an employment contract that complies with Singaporean legal standards.
An employment contract in Singapore spells out the rights and obligations of the employer and employee. The key terms included in the contract are:
- Job title and description
- Employment commencement date
- Employment duration for temporary contracts
- Working hours, work days per week, and rest days
- Workplace details (optional)
- Salary, overtime pay, bonuses, and other forms of compensation.
- Probationary period
- Allowances and deductions
- Types of leave
- Additional medical benefits
- Identities of both parties (employer and employee) involved
- Notice periods for termination of employment
Additional resource: How to Define Your Employee’s Job Scope (With a Template!)
3. Payroll and benefits
Once the Singapore EOR legally employs the candidate on your behalf, they register the new employee for payroll and prepare payslips every month while making the necessary deductions.
Singapore’s Employment Act specifies that an employee’s salary must be paid at least once a month within seven days after the end of a salary period. It also stipulates that additional payments for overtime work must be paid not later than 14 days after the last day of the salary period during which the employee performed the overtime work.
4. Compliance
An employer of record Singapore helps you manage your overseas payroll to ensure compliance and achieve consistent and accurate pay and tax withholdings for your Singapore-based employees. They’re your company’s global HR team that understands the complex labor laws and payroll regulations of the Singaporean landscape.
For example, a Singapore worker record understands that all Singapore-sourced income is taxable regardless of resident status. Hence, they make the necessary deductions on your behalf to align with taxation in Singapore, as shown below:
| Salary Range | Income Tax Bracket |
| Up to S$20,000 | 0% |
| S$ 20,000 – 30,000 | 2% |
| S$ 30,000 – 40,000 | 3.5% |
| S$ 40,000 – 80,000 | 7% |
| S$ 80,000 – 120,000 | 11.5% |
| S$ 120,000 – 160,000 | 15% |
| S$ 160,000 – 200,000 | 18% |
| S$ 200,000 – 240,000 | 19% |
| S$ 240,000 – 280,000 | 19.5% |
| S$ 280,000 – 320,000 | 20% |
| Above S$ 320,000 – 500,000 | 22% |
| S$ 500,000 – 1,000,000 | 23% |
| Above S$ 1,000,000 | 24% |
5. HR administration
The employer of record Singapore handles HR tasks such as payroll, taxes, benefits, performance reviews, employee relations, and disciplinary actions. The Singapore EOR is the main point of contact between your international employees and your company for HR related matters. They ensure HR practices align with local laws and company policies.
Things to Consider When Choosing EOR Services Singapore
Before working with any EOR services in Singapore, consider the following:
Local expertise
Ensure the Singapore EOR services company thoroughly understands the country’s tax regulations and compliance requirements. They must have local expertise regarding the Employment Act, CPF contributions, work permits, and other legal employment matters to avoid penalties, fines, or other legal issues.
Furthermore, they must have legal entities, networks, and resources to handle Singapore’s operational requirements like payroll processing and benefits administration.
Compliance track record
Check for reviews on third-party sites like G2 or Trustpilot to be sure the Singapore EOR has actually achieved compliance for past clients. A good employer of record in Singapore should have a strong track record that proves their expertise in achieving compliance for businesses similar to yours.
Service offerings
Weigh the various services the EOR Singapore offers to ensure they can handle all aspects of employment and support your employees well enough.
An ideal employer of record Singapore should offer a comprehensive package that comprises relevant HR support and employee relations throughout the employee lifecycle. They include:
- Recruitment and hiring support
- Employment contracts
- Visa and work permit applications
- Employee benefits administration
- Payroll management
- HR advisory services
- Employee termination
A Singapore worker record with extensive service offerings can save you time and money, freeing your company from administrative burdens.
Technology platform
Assess the technology platforms the Singapore EOR uses for human capital management, payroll processing, and communication. This is necessary as a centralized, secure, and user-friendly platform will double efficiency, ensure data accuracy, and achieve clear communication between your company, the EOR, and your employees.
References and testimonials
Check for client testimonials and case studies that demonstrate the Singapore EOR’s reputation, work ethic, and successes. If their clients’ feedback is positive, the Singapore EOR is more likely to deliver reliable and compliant services.
Challenges and Risks for Singapore Employer of Record
Complex Singapore employment law
While EOR services Singapore specialize in navigating complex regulations, there’s still a risk of compliance. For one, Singapore’s legal environment may change over time, and if your EOR Singapore fails to adapt promptly, your business may incur fines, increased costs, operational delays, or other legal consequences.
Employer of record Singapore selection
With the many EOR Singapore options available, it may not be easy to select the right choice. A pro tip is to do your due diligence and research the reputation of various EOR companies before deciding. This is necessary as some EORs may claim to have local expertise, but their understanding of specific industry practices or niche legal requirements in Singapore may be limited.
Also, ensure the EOR has its entity in Singapore and doesn’t rely on external providers to provide some of their services. If they depend on external providers, their charges will be more expensive.
Protecting employee data
Singapore’s 2021 Pandora papers leak reveals that any organization can be hacked or suffer data leaks if it lacks the right data protection systems.
Since a third party will be handling your employment affairs in Singapore, there is a risk of employee data breaches. Hence, an employer of record services in Singapore should adopt strict data protection standards to safeguard your data from the wrong hands.
Ensure your EOR company works in line with the Personal Data Protection Act (PDPA) Singapore. The PDPA comprises the demands governing the collection, use, disclosure and protection of personal data in Singapore. It also recognizes organizations’ need to collect and use employee data for legitimate purposes while protecting such data.
Frequently Asked Questions for Employer of Record Singapore
1. What is an EOR?
An EOR is a third-party agency that legally hires, recruits, pays, and manages overseas employees and HR processes on behalf of your company.
2. How long does it take to hire an employee through an employer of record Singapore?
Hiring an employee through an Employer of Record Singapore typically takes one to three weeks if you’ve already found a candidate. It takes three to six weeks if an EOR Singapore helps with recruitment. The duration depends on factors such as the EOR’s efficiency and the complexity of the role.
3. What are the costs associated with using an employer of record Singapore?
The costs associated with using an Employer of Record (EOR) in Singapore vary depending on the Singapore EOR provider, workforce size and location, industry complexity, compliance management, and additional services.
But generally, EOR costs range from S$599 to over S$2,000 per employee per month. Some EOR services Singapore charge per employee. Some take a percentage of your employees’ salary while others offer a custom or fixed pricing,
4. Can I terminate an employee through Singapore EOR?
Yes, you can terminate an employee through an EOR. But the process has to be fair and compliant with the Singaporean Employment Act.
5. Does an employer of record Singapore provide benefits to employees?
Yes, an employer of record Singapore provides benefits to employees. They include health insurance, paid leave, statutory benefits like Central Provident Fund (CPF) contributions, and other benefits the law requires. The Singapore EOR services may also offer additional benefits depending on your company’s preferences and industry standards.
6. Can an employer of record Singapore help with visa and work permit applications?
Yes, an EOR Singapore can help with visa and work permit applications, especially if your company intends to hire workers who need the appropriate authorization to work legally in Singapore.
Maximize Your Business Potential with Employer of Record Singapore
Omni makes it easy to support employees across multiple countries, time zones, and currencies.
Our centralized document management solution makes gathering the necessary data required to apply for employment passes and other country-specific initiatives seamless and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.
Omni offers a comprehensive payroll solution tailored to Singapore’s specific requirements. With features like support for SGD, automated tax calculations, and managed CPF contributions, Omni can help HR teams simplify their payroll processing and ensure compliance.
Additionally, Omni’s customizable dashboard allows your teams to set and manage calendars pre-loaded with country or region specific holidays and timezones, seamlessly onboarding individuals in various locations.
Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Singapore’s labor laws. Book your product tour with our team to learn more about how Omni can help maximize your business potential.
