Employing someone in Singapore can be overwhelming especially if you are dealing with an unfamiliar country. The risks involved in non-compliance to the various rules are high. You and your company need to be careful about navigating through the tax and employment laws of Singapore. The information you are visualizing can be outdated, inaccurate, or possibly in another language.
The consequences involving non-compliance in the country of Singapore are pretty high. Therefore you need to invest time and money to completely understand the jurisdiction of Singapore. Involving immigration and tax-related services providers early in the process should be the top method for managing the compliance risks for various businesses. Most businesses say that they outsource these services early at the start of the project.
Hidden costs you may not have noticed
When you hire in Singapore you will likely incur some unnecessary costs, especially while estimating the budget for an assignment. Normally these costs occur at the time of employment and they tend to be specific to a country, let’s say China. These costs are many times unavoidable and unpredictable and can end up costing you more than the business can afford. Hiring a single employee for a Singapore assignment does not justify the costing and efforts required for a business to learn everything from scratch about the employing process in Singapore.
Hire services of PEO
The most preferred way to hire in Singapore for the global mobility professionals is using outsourcing services. 71% of them say that they decided to hire the services of these agencies early to increase cost savings. This outsourcing is preferred over a reduction in the assignments or transfer or having to improve the in-house administration costs as a method for saving money. These are common considerations while hiring employees in any new country. You can use the services of a PEO. The PEO with experience in hiring employees in Singapore can help their clients with several issues. The hiring process will be easier and less overwhelming than usual. Also, the Singapore PEO can help with managing your employees after they are hired.
Common issues faced while employing in Singapore
Getting work permits and visas
There are different kinds of work visas available for employees in Singapore. One of the basic requirements that are being enforced at the moment strictly is that an employer with greater than 25 employees must advertise this vacancy in the local media before he can apply for a visa for a foreign employee. The rising restrictions on work visas have meant that there are delays in the period for processing. The immigration authorities have also raised their scrutiny level at the time of application review. The online applications that took one week to get an employment pass, which is the most popular kind of work permit in Singapore, now take up to 3 weeks. The in-person applications take even longer, up to 5 weeks.
Paid leave period
You will find an array of kinds of paid leaves for the employees working in Singapore such as,
- All public holidays.
- 6 days of paid leave for childcare.
- 7 days of annual leave with an additional day for each year of service.
- 14 days of paid sick leave.
- 60 days of paid hospitalization leave.
- 16 weeks of maternity leave. A minimum of 8 weeks of paid leave.
All the expats working in Singapore are entitled to these minimum leave periods. Even more, leave can be provided in the employment contract if so desired by the parties involved.
No tax-deduction system from the payroll
Employees working in Singapore are responsible for paying their taxes. The normal PAYE system of the tax deductions from their monthly checks is not necessary. But, in the event, employment has been terminated or there is a resignation, the employer has to file a tax clearance return to make sure that they have paid all the taxes necessary to date.
There were certain restrictions on hiring employees in certain sectors in Singapore earlier. But the city-nation has decided to loosen some of these restrictions taking into account the coronavirus situation. This action has been envisaged to aid the businesses in the services and manufacturing sectors that are worst-hit by the labor disruptions due to the outbreak of coronavirus. The Ministry of Manpower has declared that the state will permit businesses to hire workers in these sectors who are already in the country. The companies can hire the work permit holders only if they have left Singapore. These measures are taken to balance the labor needs of the economy.