Hire staff in Singapore: Fast, without a local entity and in 100% compliance with local laws
As Asia’s leading corporate & HR administrative specialist, New Horizons can legally employ staff in Singapore on your behalf and second them back to you under a services agreement (i.e. New Horizons becomes your employer of record in Singapore). This arrangement massively simplifies your expansion, enabling you to effectively hire staff to perform your sales activities, market research, set-up activities without the need for the various costs, times and commitment associated with setting up an entity.
New Horizons ensures compliant day-to-day guidance regarding national labor laws and regulations, providing mandatory monthly payroll requirements, and absorbing all local employment liabilities.
Contrary to popular belief, the easiest, most flexible and cost-effective way to enter the Singapore market is NOT by setting up a legal entity in Singapore. The easiest and most cost-effective way to enter the Singapore market is by using PEO employment or hiring staff under a Professional Employment Organisation (PEO) arrangement which New Horizons provides.
Benefits of Payroll & PEO
Income Tax & Social Charges
New Horizons manages all aspects of payroll for workers in Singapore, including taxes, withholding, social security payments and other statutory requirements. New Horizons becomes the Employer of Record and employs the staff on behalf of the client.
There are no employee or employer tax contribution on monthly basis in Singapore. The individual tax is required to be submitted by March 30th each year for the previous calendar year income.
For example, New Horizons will submit your staff’s individual income tax by March 30th for his/her income earned for January 1st to December 31st of the previous year. In practice, the tax assessment from the IRAS (authority) would come about within a month or two, of which full settlement of the tax payable is required by the individual (normally payment by May). In other words, there is no tax withholding or deduction on a monthly basis and it is the responsibility of the individual to file his/her tax.
If your employee is a Singapore Citizen or Permanent Residence, he/she will need contribute to the CPF. Depending on his age, the percentage varies.
Below age of 55 year old, the employee will need to contribute 20% of his/her income (capped at S$6,000/ month). For example, if the monthly salary is S$10,000, he/she will received net of S$8,800 (10,000 less 20% of 6000) in his/her bank account.
As the local employer of records in Singapore, New Horizons will contribute to the employer CPF on your company’s behalf in case the employee is a Singapore citizen or Permanent Resident. Depending on his/her age, the percentage varies.
Below age of 55 year old, the employer will need to contribute 17% of his/her income (capped at S$6,000/ month). For example, if the monthly salary is S$10,000, the employer will need to pay S$1,020 a month to the authority
Concerning foreign employees who would be on employment pass with New Horizons, they are not required to contribute to the Singaporean state pension scheme (CPF). Henceforth, there will be no deduction on his/her gross salary and there is no additional payment/ contribution required by the employer of record (New Horizons).
Employing Foreigners in Singapore
Yes, we can hire staff from every nationality as long as their profiles are approved by the immigration authorities in order to obtain the working permit. New Horizons provide recruitment services and PEO services, available for both foreign and local professionals from any background.
Foreign workers are required to have the proper visas and work permits in Singapore, as established by immigration laws. You can use New Horizons to sponsor the employee for the necessary permits. The most common work permit is the Employment Pass which is for suitably qualified foreign workers making at least SGD 3,300 per month.
New Horizons’ appointed employment agent (EA) or local Singapore entity applies for the Employment Pass via EP Online. The approval process takes 7 working days. The Singapore Ministry of Labour issues an In-Principle Approval (IPA). New Horizons prints the letter and couriers the employees copy to them.
For guidance on the application costs in local currency with New Horizons, each application to the Ministry of Manpower (MOM) is $70 and on issue of employment pass is another $150. New Horizons also requires the individual to go for medical checkup in Singapore if the employment pass is approved. Renewal costs is $120, possibly required after a year or 2 depending on how long the pass is issued.
About the Employment Passes application with New Horizons
Employment Passes application are carefully assessed by MOM on a case by case basis. MOM takes into consideration a number of factors such as the applicant’s qualifications, work experience, job scope, economic contribution, employer track record and ability to complement Singapore’s local workforce.
Requirements & Considerations
To be considered for an Employment Pass, New Horizons must possess one or more of the following requirements:
- A recognized Diploma/Degree qualification
- Professional qualifications (professional or educational)
- Specialist skills
- Relevant work experience
We also advise tour clients to take into account some other considerations:
Salary and Position
The minimum salary for an employment pass holder is S$3,600 per month. The salary should be commensurate with the employee’s designation at New Horizons and should not be set too low. When determining the salary, New Horizons’ payroll team will consider the applicant’s last drawn salary and current market standards to ensure approval by the immigration officer.
Your Employer of Record’s Paid-up Capital
New Horizons makes sure that our paid-up capital (with proof of receipt in our local entity bank account) is always reflective with our employees and company’s financial projection. Be aware that employers of record which are setting it too low may lead to questions about their company’s sustainability and its ability to support your staff and business expenses.
Business Plan, Business Spending and Commitment to hiring and developing
When selecting an employer of record to sponsor your staff in Singapore, it is advantageous to select a partner that demonstrates well-defined business plans to operate in Singapore.
The reputation and track-record of the New Horizons’ local entity, our shareholders and directors matters, and may improve the chances for a successful application. Our commitment to business spending through local vendors and our expertise in hiring local individuals may also improve your chances for a successful application with New Horizons.
In short, all employment pass applicants must demonstrate that they are specialists in their field or having a strong track records in doing what they are going to do for your company. Our HR specialists will confirm that your staff are always educationally qualified with enough years of related work experience.
New Horizons will consequently demonstrate that your staff can contribute to the Singapore economy (e.g. job creations, tax paying, etc..) with our local entity support to pay staff and your management support to run the business.
• Procedure & Timeframe
New Horizons will submit your employees’ Employment Pass applications to the Ministry of Manpower (MOM). Applications may be filed online or manually. The employment pass process generally takes about 5 to 8 weeks in total from application to collection of the employment pass, if successful.
Online applications require the uploading of relevant supporting documents by New Horizons’ HR Director. Approximately 80% of applications via this route take 3 weeks or longer to process. To do online submission, we need to confirm the new hire and his/her documentation. Our legal department process each case in about 1-2 weeks.
Manual applications are preferred by applicants whose supporting documents (eg. testimonials from previous employers, writing samples, etc.) highlight other merits. The processing time for this route takes at least 5 weeks from the date of receipt of the application.
Please note this merely serve as a guidance provided by New Horizons, and the actual duration may take longer due to many other reasons.
Prior validating any application for a foreign candidate, we suggest you to send to our Immigration Department a copy of the individual detailed CV, a copy of the highest educational certificate and his/her proposed designation with your company.
We can assist to run an assessment to guide if an employment pass would be granted.
On formal application, the following documents are needed from your side:
- Copy of passport with clear facial features. Validity of passport should be at least 6 months.
- Degree certificate/s or Diploma/s; For India qualification, it shall include all mark sheets (transcript); For China qualification, it shall include certificate of graduation.
- Copy of Other Professional / Trade/ Specialist Certificate/s, if any
- Detailed Curriculum Vitae and Declaration Forms
- Employment Contract with New Horizons, approved by your company.
*any document not in English must be accompanied by its official English translation.
Labor Contract Termination
In Singapore, most employees commence their employment on a probationary period (usually 3-6 months), and are appointed as permanent employees upon successful completion of the probation. However, the employer is entitled to terminate the employment before the probationary period ends, by providing notice (usually 1-2 weeks or as stated in the contract) or by paying salary in lieu of notice.
The actual severance pay in Singapore depends on the company policy. At New Horizons, we usually follow the local practice as below:
- Less than 26 weeks of employment: 1 day salary;
- 26 weeks to less than 2 years: 1 week salary;
- 2 years- less than 5 years: 2 weeks salary;
- 5 and above: 4 weeks salary.