Do you have employees in Singapore? Learn about Social Security, Statutory Leaves, and Recent Employment Act changes
The Employment Act is Singapore’s primary labor law and provides the necessary terms and conditions at work for employees covered by the Act. All employees working under a contract of service are covered except managers, executives with a monthly basic salary of more than $4,500, seafarers, domestic workers, statutory board employees or civil servants.
Amendments to the Employment Act. As of April 2016, all employers are required to issue itemized pay slips and key employment terms (KETs). Read more here
The Central Provident Fund (CPF) is Singapore’s mandatory social security savings plan that is funded by contributions from employers and employees.
- Employers are required to pay both the employee and employer contributions for all employees earning more than $50 a month. Late payments are liable for a fine and interest is calculated daily at the rate of 1.5% per month, starting from the first day of the following month after the contributions are due (e.g. interest for January contributions will be calculated from 1 February).
- CPF contributions are mandatory for Singapore Citizens and Singapore Permanent Residents who are working in Singapore under a Contract of Service.
- In addition to the monthly salary, CPF contributions are also payable for certain allowances (e.g. meals).
- In recent months, the government had made changes to CPF wage ceiling, and interest rates for those 55 and older.
- The frequent updates mean payroll teams have to on their toes and ensure they continuously update their payroll system to ensure that CPF contribution rates are up-to-date with the local laws.
Skills Development Levy (SDL) is a compulsory levy that employers pay for all employees working in Singapore, on top of CPF contribution and Foreign Worker Levy. CPF Board collects SDL on behalf of the Singapore Workforce Development Agency.
The SDL collected are channeled to the Skills Development Fund, which is used to support workforce upgrading programs and to provide training grants to your company when your employees are sent for training under the National Continuing Education Training system.
- Employers must pay SDL for all employees working in Singapore, including: permanent, part-time, casual and temporary workers, foreign employees on work permits, and those holding employment passes.
- The SDL for foreign employees is in addition to the Foreign Worker Levy payable to the Ministry of Manpower.
The Foreign Worker Levy, commonly known as ‘levy,’ is a pricing mechanism to regulate the number of foreign workers (including foreign domestic workers) in Singapore. An employer does not need to pay CPF contributions for foreign workers. Companies need to pay monthly levies to hire workers who hold Work Permits or S Passes. No levy is due for employees on Employment Passes. A 2% penalty is charged for late payment.
- Annual Leave: All employees covered under the Employment Act and who have worked for at least three months, are entitled to annual leave. This entitlement applies even when an employee is on probation. Annual leave is partly based on years of service.
- Adoption Leave: Eligible adoptive mothers, including those who are self-employed, are currently entitled to four weeks of Government-funded adoption leave to bond with and care for their adopted infants.
- Childcare Leave: Eligible working parents of Singapore citizen children are entitled to six days of paid childcare leave per year. Parents of non-citizens can get two days of childcare leave a year under the Employment Act.
- Maternity Leave: Working mothers are entitled to either 16 weeks of Government-Paid Maternity Leave or twelve weeks of maternity leave, depending on whether the child is a Singapore citizen and other criteria.
- Sick Leave: Employees are entitled to both paid outpatient and hospitalization sick leave if they have worked for at least three months with the employer.
- Paternity Leave: Eligible working fathers, including those who are self-employed, are currently entitled to one week of paid paternity leave funded by the Government. They may be eligible for one additional week of paid paternity leave if their employers voluntarily agree to provide it, funded by the Government.
- Shared Parental Leave: Working fathers can apply to share one week of the wife’s sixteen weeks of Government-Paid Maternity Leave, subject to the wife’s agreement.
- Unpaid Infant Care Leaves: Working parents are entitled to six days of unpaid infant care leave a year if the child is a Singapore citizen.
The information shared in this article is general information only and not professional or legal advice. If you would like more information on Singapore terminations, work passes and permits, workplace safety and health requirements, procuring Employee benefits or other global expansion issues, please connect with us at firstname.lastname@example.org or call +1-408-913-9130 to speak to our experts.