Hiring in Singapore: EOR Guide & Compliance Overview

Overview

If you are hiring your first 1-10 employees in Singapore, using an EOR is usually the lowest-risk option because onboarding often starts in 2-6 weeks, while entity setup can take several months.

Singapore is the most straightforward hiring market in Asia-Pacific. English-speaking, common-law based, with transparent employment legislation and a business-friendly regulatory environment. Employer costs are moderate, primarily Central Provident Fund (CPF) contributions at 17% for employees under 55. The main complexity is the work permit system for foreign nationals: Employment Pass (EP) requirements have tightened significantly since 2023, with COMPASS scoring now determining eligibility.

Incorporating a Singapore Pte Ltd through ACRA takes 1–2 days if you have a local resident director lined up — and that’s the catch. You need a resident director (citizen, PR, or EntrePass holder), a registered local office address, and a corporate secretary appointed within 6 months. After incorporation, ongoing obligations stack up: IRAS corporate tax filings, monthly CPF submissions for local employees, Annual Returns to ACRA, and GST registration once revenue exceeds SGD 1 million. None of this is difficult, but it’s overhead that makes no sense if you’re testing Singapore with 1–3 hires.

That’s why EOR remains popular here despite Singapore’s reputation for easy incorporation. Companies use it to skip the local director requirement, avoid setting up payroll infrastructure for a small team, and — increasingly — to let someone else manage EP applications under COMPASS. The COMPASS framework scores EP candidates across salary benchmarks, qualifications, workforce diversity, and strategic economic priorities, with a 40-point minimum to pass. The EOR entity’s own workforce composition directly affects the diversity criteria score, which means the same candidate can score differently depending on which EOR sponsors the application. This has made EP outcomes less predictable than they were before September 2023, and it’s the single biggest reason companies now lean on EOR providers with established Singapore entities rather than spinning up their own.

For comprehensive compliance detail, see our regional guide.

Key Employment Facts

Statutory Benefits

CPF is the backbone: employer contributes 17%, employee contributes 20% (for citizens/PRs under 55) across Ordinary, Special, and Medisave accounts. Foreign employees on Employment Passes are not covered by CPF, this significantly reduces employer costs for EP holders but means you’ll need to provide alternative retirement and medical benefits to stay competitive.

On top of CPF, every employer pays the Skills Development Levy (SDL): 0.25% of each employee’s monthly remuneration, with a minimum of SGD 2 and a maximum of SGD 11.25 per employee. It’s a small line item, but it applies to all employees — local and foreign. Separately, employers of S Pass and Work Permit holders pay the Foreign Worker Levy, which ranges from SGD 300–950/month depending on the pass type, sector, and the company’s dependency ratio ceiling. EP holders are exempt from the Foreign Worker Levy, another reason EP hires are cheaper on paper.

The annual wage supplement (AWS), commonly called the 13th-month bonus, is market practice in Singapore but not a legal requirement. Most employers pay it; not doing so puts you at a recruitment disadvantage. Your EOR should include AWS in compensation planning — if they don’t mention it during onboarding, ask.

The Employment Act covers all employees in Singapore except domestic workers, seafarers, and certain government employees. Part IV of the Act — which governs working hours, overtime, rest days, and shift limits — only applies to workmen earning up to SGD 4,500/month and non-workmen earning up to SGD 2,600/month. Employees above those thresholds still get core protections (sick leave, maternity, wrongful dismissal), but not the overtime and hours-of-work caps. This distinction matters for structuring compensation.

Other statutory entitlements: 14 days paid sick leave (60 days with hospitalization), 16 weeks government-paid maternity leave for eligible mothers, 2 weeks government-paid paternity leave, and 6 days childcare leave per year for parents of children under 7.

Work Visas and Immigration

Foreign worker hiring is central to Singapore’s economy, and the work permit system is where most EOR complexity lives. Unlike markets where nearly all EOR hires are local, Singapore sees a significant share of Employment Pass holders — particularly in tech, finance, and professional services. The COMPASS framework, live since September 2023, made EP approvals less predictable and more dependent on the sponsoring entity’s workforce composition.

The EOR entity acts as the employer-sponsor for EP and S Pass applications. This is standard and legally clean. The catch: under COMPASS, the EOR’s own workforce diversity and local-to-foreign ratio directly affect your candidate’s score. Two identical candidates can get different outcomes depending on which EOR sponsors them. Before committing to a provider for EP-heavy hiring, ask for their COMPASS diversity profile — specifically their nationality concentration within their Singapore entity.

S Pass holders are subject to a quota: employers can hold S Passes for no more than 10% of their total workforce in services, 20% in manufacturing. S Pass and Work Permit holders also trigger the Foreign Worker Levy (SGD 300–950/month), which EP holders avoid. For professional roles, EP is almost always the right path. The minimum qualifying salary rises periodically — MOM has increased it three times since 2020 — so budget for upward drift.

Top EOR Providers for Singapore

Deel and Multiplier both have strong Singapore operations with fast onboarding — 1–3 days for citizens and PRs, which is among the fastest globally. Remote operates through its owned Singapore entity, a genuine differentiator if entity ownership matters to your compliance team. Papaya Global provides detailed CPF calculations and reporting for finance teams that want granular payroll analytics.

Multiplier is headquartered in Singapore, and the home-market advantage shows in practice: their local support team responds during SGT business hours without routing through a global queue, and their EP application process is more hands-on than most competitors. For EP-heavy hiring, Deel’s volume of Singapore applications gives them pattern-matching advantages on COMPASS scoring — they’ll flag borderline candidates before you invest weeks in the process. Pricing across all four providers runs USD 500–700/employee/month for Singapore, with EP application management sometimes bundled, sometimes an add-on. Ask before you sign.

Employer Cost

Singapore’s employer cost structure splits sharply based on the employee’s citizenship status.

Singapore citizens and Permanent Residents (under 55): Employer CPF contribution: 17% of gross salary on the first SGD 6,800/month (contributions stop above this monthly wage ceiling). Employee CPF: 20%. Total employer cost above salary: approximately 18–19% (CPF 17% + SDL 0.25% + any applicable Foreign Worker Levy).

Employment Pass (EP) holders: No CPF obligation for the employer. Total mandatory employer cost: SDL at 0.25% (SGD 2–11.25/month) — effectively zero above salary. This is why EP holders are significantly cheaper to employ than citizens despite higher gross salaries.

S Pass holders: No CPF. Foreign Worker Levy of SGD 300–550/month applies (depending on the company’s dependency ratio). Budget this as a direct employer overhead.

For a citizen/PR developer at SGD 8,000/month gross: CPF employer contribution ~SGD 1,156 (17% on first SGD 6,800), SDL ~SGD 20 — total monthly employer overhead ~SGD 1,176 before EOR fee. For an EP holder at the same salary: total overhead is just the SGD 20 SDL plus the EOR fee (~SGD 900). The difference compounds significantly over a year: hiring an EP holder saves approximately SGD 13,500/year in CPF contributions at this salary level.

Termination Rules

Singapore’s Employment Act follows a contractual notice framework — termination terms are set by the employment contract, subject to statutory minimums. There is no general requirement to demonstrate cause for termination (unlike Germany or France), making Singapore one of the more employer-flexible developed markets.

Notice periods (statutory defaults): 1 day (first 26 weeks of service), 1 week (26 weeks–2 years), 2 weeks (2–5 years), 4 weeks (5+ years). Contractual notice often extends these to 1–3 months for professional and management roles. Either party can terminate by paying salary in lieu of notice.

Wrongful dismissal (Employment Act, Part 4A): Employees with 6+ months of service can claim wrongful dismissal if terminated without cause or just excuse, or for discriminatory reasons. The remedy is reinstatement or compensation — not an automatic right. The TADM (Tripartite Alliance for Dispute Management) mediates claims first; unresolved cases go to the Employment Claims Tribunal.

Retrenchment: No statutory severance requirement, but MOM guidelines recommend 2 weeks to 1 month’s pay per year of service as a retrenchment benefit. Companies with 10+ employees retrenching 5+ staff must notify MOM in advance. Retrenchments must be conducted fairly with transparent selection criteria.

EP holders: If terminated, the employee has 30 days to find a new employer and transfer their EP sponsorship, or they must leave Singapore. The EOR is responsible for EP cancellation within 1 week of the last day of employment — delays create immigration compliance issues.

Budget: notice period pay + any accrued annual leave payout + market-practice retrenchment benefit (if applicable). Most Singapore exits for mid-level roles cost 1–3 months’ salary total, with no statutory severance floor.

Frequently Asked Questions

Can I hire a foreign national in Singapore through an EOR, or do they need their own work permit?

The EOR applies for the Employment Pass (EP) or S Pass on behalf of the foreign employee. The EOR entity acts as the employer-sponsor. Since the COMPASS framework launched, EP applications are scored on salary, qualifications, diversity, and strategic skills. Minimum qualifying salary is SGD 5,600/month (SGD 6,200 for financial services), and approval rates have dropped. Budget 4–8 weeks for EP processing, longer than many companies expect. The EOR handles the application, but approval depends on the candidate’s profile, not the EOR’s influence.

Why is Singapore EOR significantly cheaper for EP holders than for citizens/PRs?

No CPF obligation for foreign employees. When you hire a Singaporean citizen through EOR, the employer owes 17% CPF on top of salary. For an EP holder, that 17% disappears, the employer cost drops to nearly zero above salary plus the EOR fee. This makes Singapore EP holders among the most cost-efficient international hires in APAC. Just factor in the EP application cost (~SGD 105) and insurance requirements.

What happens if I need to terminate an employee in Singapore?

Singapore follows a contractual notice framework, whatever the employment contract specifies. During probation, notice is typically 1 day to 1 week. After probation, standard contracts require 1–3 months’ notice from either side. There’s no general unfair dismissal statute like in Europe, but the Employment Act protects against wrongful dismissal (dismissal without cause or just excuse). For employees with 2+ years of service, retrenchment triggers market-practice severance of 2 weeks to 1 month per year of service, though this isn’t legally mandated.

How does the COMPASS framework affect my ability to hire foreign talent through an EOR?

COMPASS scores EP applications across four foundational criteria — salary relative to local benchmarks, candidate qualifications, the employer entity’s workforce diversity, and support for strategic economic priorities — plus two bonus criteria for skills in shortage and strategic partnerships. You need 40 points to pass. Each criterion scores 0, 10, or 20 points. The diversity component is where EOR matters most: it evaluates the nationality concentration within the sponsoring entity’s workforce. An EOR with a heavily concentrated employee base in one nationality may drag down your candidate’s diversity score. Salary above the 90th percentile of the sector benchmark guarantees 20 points on that criterion, which can compensate for weaker diversity or qualification scores. Candidates with skills on the Shortage Occupation List get a 20-point bonus that effectively guarantees approval if other scores aren’t zero. The practical impact: EP applications that would have sailed through before September 2023 now fail if the candidate earns near the minimum qualifying salary and doesn’t have strong qualifications or shortage-list skills. If you’re hiring mid-level roles through an EOR, confirm their entity’s COMPASS diversity profile before committing.

To connect this guidance with live hiring demand, see hiring your first international employee and remote jobs by country.

Further Reading

• Deel EOR Review — Fast Singapore onboarding and how Deel manages CPF calculations
• Multiplier EOR Review — Singapore-headquartered provider with deep home-market expertise
• Remote EOR Review — Owned-entity approach and what it means for compliance in Singapore
• Papaya Global EOR Review — Detailed CPF reporting and payroll analytics for finance teams
• Hiring in Australia — Common next market for companies with Singapore operations
• Compare EOR providers
• Remote jobs in Singapore
• Best EOR for Singapore
• Hiring your first international employee

Anchal Katyal · Founder, eorHQ

Anchal has spent over a decade in product strategy and market expansion across Asia and the Middle East. She evaluates EOR providers on compliance depth, entity ownership, payroll accuracy, and in-country support quality.

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