Singapore Global Payroll and Tax Information Guide

June 27, 2022 | 5 Mins Yana Todorova

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Payroll in Singapore – 2022 Updates

For 2022 the following payroll updates were taken by the Singapore authorities:

Singapore Payroll – Basic Facts

Government approval is generally not required for foreigners to establish business in Singapore and 100% foreign ownership is permitted. There is an exception for banks and other financial institutions, which require approval from the Monetary Authority of Singapore and must obtain certain special licenses.

In-country bank account is not mandatory to make global payroll payments to employees or authorities in Singapore. An office address is a minimal requirement by law, if you plan to register a:

    • Incorporated company
    • Subsidiary
    • Branch office (In this case you have to appoint at least two local agents which will act on your organization’s behalf)
    • Representative office

Global payroll in Singapore is regulated by law and there are no payroll taxes. Employers in Singapore are responsible for submitting income tax returns and paying social taxes for employees. The tax year matches the calendar and runs from 1st of January to 31st of December.

Tax and Social Security Considerations

Income Tax

Income tax rates depend on an individual’s tax residency status. You will be treated as a tax resident for a particular Year of Assessment (YA) if you are a:

  1. Singapore Citizen or Singapore Permanent Resident who resides in Singapore except for temporary absences; or
  2. Foreigner who has stayed/worked in Singapore:
      • For at least 183 days in the previous calendar year; or
      • Continuously for 3 consecutive years, even if the period of stay in Singapore may be less than 183 days in the first year and/or third year; or
  1. Foreigner who has worked in Singapore for a continuous period straddling 2 calendar years and the total period of stay is at least 183 days. This applies to employees who entered Singapore but excludes directors of a company, public entertainers, or professionals.

If you do not meet the conditions stated above, you will be treated as a non-resident of Singapore for tax purposes.

Singapore’s personal income tax rates for resident taxpayers are progressive. This means higher income earners pay a proportionately higher tax, with the current highest personal income tax rate at 22%.

Non-residents are taxed at a flat rate of 22%. The employment income of non-residents is taxed at either a flat rate of 15% or at the resident rates with personal allowances, whichever yields the higher tax.

Social Tax

Only Singaporean citizens and permanent residents are required to contribute to the Central Provident Fund (CPF) which is the national pension scheme. Expatriates are not required to make social security contributions. Employees are required to contribute 20% and employers are required to contribute 17% of ordinary monthly wages to social security.

Corporate Tax

The corporate income tax rate is 17% on chargeable income.

Compensation and Benefits

Minimum Wage and Wage Payment

There is no national minimum wage for all workers and employee’s salary can be negotiated by employers and employees.

Overtime

For employees who are covered by the Employment Act, overtime is 150% of the hourly basic pay rate.

Holidays

Employees are entitled to 10 paid holidays. The days of general and presidential elections also are considered public holidays. An employee who is required to work on a public holiday is entitled to an extra day’s salary at the basic rate of pay. Alternatively, the employer and employee may mutually agree to substitute a public holiday for another working day.

There is a “13th month payment” but it is not compulsory.

Employee Leaves

• Annual leave: You are entitled to paid annual leave if you have worked for your employer for at least 3 months. Your annual leave entitlement depends on how many years of service you have with your employer.

• Maternity leave: As a working mother, you will be entitled to either 16 weeks of Government-Paid Maternity Leave or 12 weeks of maternity leave, depending on whether your child is a Singapore citizen and other criteria.

• Paternity Leave: From 1 January 2017, eligible working fathers, including those who are self-employed, are entitled to 2 weeks of paid paternity leave funded by the Government.

• Sick leave: You are entitled to both paid outpatient sick leave and paid hospitalization leave if you have worked for at least 3 months with your employer.

Foreign Workers in Singapore

Foreign employees are entitled to the same rights as Singapore citizens and are generally covered by the same tax and workplace laws.

Visas

Different types of visas exist for foreign workers depending on skill level. The following are the types of visas employees may apply for when working abroad in Singapore.

    •  Employment Pass (EP)
    •  Entrepreneur Pass (EntrePass)
    • Personalized Employment Pass (PEP)
    •  Work Permit
    •  S Pass.
    •  Miscellaneous Work Pass

Taxes:

The employment income of non-residents is taxed at the flat rate of 15% or the progressive resident tax rates, whichever is the higher tax amount.

 

For more information about how our Global Payroll Control Platform integrates with local payroll providers in Singapore, contact us today.

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