How to Hire Employees in Singapore: Step-by-Step Guide

Last updated on June 27, 2022

employer talking to job applicant

If you own a business in Singapore, there may come a point where you might want to hire employees to assist you with running its day-to-day operations or accommodate your business expansion goals.

This article will cover the following step-by-step process of hiring employees in Singapore:

  1. Decide on whether you want to hire an employee on a full-time, part-time or term contract basis
  2. Apply for a Central Provident Fund (CPF) submission number
  3. Invite and shortlist job applicants
  4. Make an employment offer and sign the employment agreement
  5. Purchase work injury compensation insurance

It will also briefly discuss employer obligations with regard to:

1. Decide Whether You Want to Hire an Employee On a Full-Time, Part-Time or Term Contract Basis


A full-time employee is typically responsible for the day-to-day operations and core functions of a business. They are hired under a contract of service for an unspecified period of time, which will run until terminated by either the employer or employee.

Termination is to be carried out via written notice, and the length of which is to be determined either by the terms of the contract or in proportion to the length of employment, under the Employment Act (EA).


A part-time employee may play a more supportive function in a company or organisation as compared to a full-time employee. They are hired under a contract of service to work less than 35 hours a week and also enjoy protection by the EA through the Employment of Part-Time Employees Regulations. The contract of service must contain the following terms:

  • Hourly basic rate of pay;
  • Hourly gross rate of pay (the hourly basic rate plus allowances);
  • Number of working hours per day or per week; and
  • Number of working days per week or per month.

Term contract 

On the other hand, term contract employees are hired on fixed-term contracts of employment when the job is only available on a temporary or project basis or when they face a headcount constraint (i.e. the number of people the company can employ is restricted). These fixed-term contracts will terminate upon the expiry of a specific term or period (such as a date), unless it is renewed.

The Tripartite Standard on the Employment of Term Contract Employees specifies a set of term-contract employment best practices that all employers should implement at the workplace for their term contract employees. In particular, if your term contract employee has provided continuous service for 3 months or more, you must provide statutory leave benefits under the EA and the Child Development Co-Savings Act (CDCA), such as annual leave and medical leave. Continuous service refers to term contracts lasting 14 days or more, which are renewed within 1 month from the end of the previous contract.

For all types of employment contracts, you should abide by all the relevant Tripartite Guidelines on Fair Employment Practices.

2. Apply for a Central Provident Fund (CPF) Submission Number

To hire a Singaporean or Singapore PR employee, you need to apply for a CPF Submission Number (CSN) to make CPF contributions as an employer. Every month, you must contribute two portions of money to your employees’ CPF accounts: 

  1. The employee’s contribution, which consists of 20% of their wages; and
  2. The employer’s contribution, which consists of 17% of the employee’s wage.

As an employer, you are permitted to deduct the employee’s share of the mandatory CPF contributions from their wages if your employees are earning more than $500 per month.

For more information about CPF and the respective contribution rates of employees and employers, please refer to our other article on making CPF contributions.

The due date for CPF contributions is on the last day of the calendar month. You can easily submit your CPF contributions via CPF EZPay and CPF EZPay Mobile.

3. Invite and Shortlist Job Applicants

Next, you should put up fair job advertisements that do not discriminate against applicants based on age, gender, race, religion, marital status and family responsibilities or disability. You can post advertisements on several online platforms such as MyCareersFuture, LinkedIn, or Indeed. Do note that if you are looking to hire foreigners on an Employment Pass, you must first advertise the job on MyCareersFuture for at least 28 consecutive days.

When reviewing resumes or job application forms, you should assess information only directly related to the qualifications, skills, knowledge, and experience required for the job.

Lastly, set up interviews with the job applicants to ensure that you are hiring a suitable candidate for your business. Your interviews should focus on merit-based and non-discriminatory questions and/or assessments.

4. Make an Employment Offer and Sign the Employment Agreement

Once you have found a suitable candidate for the job, you will then negotiate the Key Employment Terms (KETs) and send them an offer letter. The offer can be verbal or in writing, although you are recommended to make a written offer to minimise potential disputes. 

You can use our Find a Lawyer service to engage an employment lawyer, who can help with the drafting of employment offers.

The KETs include:

  • Job title, responsibilities and main duties of employee
  • Working arrangements (working hours, working days and rest days)
  • Basic salary, salary period and other salary-related components
  • Types of leave and medical benefits
  • Probation period and notice period

A sample KETs form is available on the Ministry of Manpower (MOM) website. You can also use MOM’s KETs verification tool to check if work arrangements, salary and other components meet the EA requirements. 

Once your offer has been accepted by the job applicant, you will need to sign an employment agreement, also known as a contract of service, which sets out the terms governing the relationship between an employer and an employee. You must include the KETs in the employment agreement. Your employee is also required to sign and return the employment agreement to you.

For further information, please refer to this guide to employment agreements in Singapore. If you require an Employment Agreement template, you can purchase one here.

Nevertheless, since the employment agreement is an important legal document for both you and your employee, you are encouraged to engage an employment lawyer for the drafting of an employment agreement. This is to ensure the legal preciseness of the contract, as well as for it to be as comprehensive as possible.

5. Purchase Work Injury Compensation Insurance

You are also required to purchase work injury compensation insurance for all employees doing manual work (regardless of their salary levels), as well as all employees earning $2,600 or less a month. This requirement applies for both local and foreign employees.

For other employees (i.e. those not doing manual work and/or earning above the salary threshold of $2,600 or less a month), you have the flexibility to decide whether to purchase insurance for them.

You can find a work injury compensation designated insurer using this list

Hiring Foreign Employees in Singapore

There are additional steps involved if you are hiring a foreign employee in Singapore:

  • Set up a Work Pass Account to register for online accounts and declare your business activity
  • Familiarise yourself with all the rules about:
    • Dependency ceiling ratio (the maximum ratio of foreign employees to the total workforce that a company in a given sector can employ); 
    • Foreign worker levy (a pricing mechanism to regulate the number of foreigners in Singapore) for work permit and S pass; and 
    • The fair consideration framework, which sets out requirements for all employers to consider the Singapore workforce fairly for job opportunities.
  • Apply and obtain appropriate work passes for the foreign employees via Work Permit Online (WPOL) or Employment Pass Online (EPOL)

For more information, please refer to our other article on hiring foreign workers in Singapore

Hiring Remote Workers in Singapore

You may wish to consider whether you are able to implement Flexible Work Arrangements such as remote working into your business.

Remote working, also known as telecommuting, is a working style that allows professionals to work outside of a traditional office environment (e.g. working from home).

For more information, please refer to this article on hiring remote employees.

Ongoing Employer Obligations

Monthly obligations

All employers must issue itemised pay slips to employees covered by the EA. The payslips should include information such as your employee’s basic pay, overtime pay, bonuses, CPF deductions and other salary-related matters.

You must issue the payslips together with the salary paid to your employee. If you are unable to issue both together, then you must give the payslip within 3 working days of issuing the salary.

As an employer, you will also have to pay the Skills Development Levy (SDL) for all your employees working in Singapore, regardless of their employment type or nationality. The SDL funds will be collected by the CPF Board and channelled into a Skills Development Fund. 

Managed by the SkillsFuture Singapore Agency (SSG), these funds will be used to support workforce upgrading programmes under the national Continuing Education Training (CET) system.

Additionally, you are expected to deduct your employees’ contributions to self-help groups (SHG) from their wages. The SHGs were set up to uplift the less privileged, low-income households in Singapore. 

SHG funds are made payable to different organisations in accordance with the employee’s race or religion and are also collected by the CPF Board. Both the SDL and SHG funds can be paid together with your employee’s CPF contributions.

Yearly obligations

As an employer, you are also required to report the remuneration of your employees to the Inland Revenue Authority of Singapore (IRAS) by 1 March every year for tax purposes. Please check out the IRAS website for the relevant tax forms.

For employers with a total of 5 or more employees for the entire year or those who have received the “Notice to File Employment Income Of Employees Electronically”, there is a compulsory Auto Inclusion Scheme (AIS) for Employment Income.  

Employers will have to submit their employees’ income information to IRAS electronically and this information will be pre-filled in their employees’ electronic Income Tax Returns. AIS employers do not need to issue any hardcopy forms and appendices to their employees.

As an employer, there are several steps that you will need to undertake if you are looking to hire employees in Singapore. In addition, you should take note that you are required to comply with a number of legal obligations, such as making monthly CPF contributions for your local employees.

Although it appears that there is a lot to be done when hiring employees, this process can ultimately prove to be rewarding as your new employees can help to take over various business operations, grow your revenue and expand the business further.

To reiterate, you are recommended to consult an employment lawyer, who can advise you on the legal context that frames your employer-employee relationships and assist you with the drafting of offer letters and employment agreements.

Additionally, if you require assistance with human resources (HR) and payroll processing issues, you may choose to consult a corporate services firm to ensure that your business runs smoothly. To engage these services, please get in touch with us here.

Hiring Employees
  1. How to Hire Remote Employees for Your Singapore Company
  2. Letter of Consent in Singapore: Eligibility and How to Apply
  3. Employment for the Disabled in Singapore: Laws and Schemes
  4. Overview of Employment Law in Singapore
  5. How to Hire Employees in Singapore: Step-by-Step Guide
  6. What is the Minimum Legal Age for Working in Singapore?
  7. How to Hire Foreign Workers in Singapore
  8. Work From Home Policy: Things to Consider & How to Write One
  9. Preparing an Employee Stock Option Plan (ESOP) in Singapore
  10. Guide to Re-Employment and Retirement in Singapore
Employer Obligations
  1. Guide to Maternity Leave for Expecting Mothers in Singapore
  2. The Expecting Father's Guide to Paternity Leave in Singapore
  3. Can Muslims Legally Wear the Tudung at Work in Singapore?
  4. How to Issue Payslips to Your Employees in Singapore
  5. Code of Practice for Workplace Safety & Health: What Employers Should Know
  6. An Employer’s Guide to Reimbursement of Expenses and Claims
  7. Mental Health Policies for Singapore Workplaces (Tripartite Advisory)
  8. Work-Life Balance Laws and Policies in Singapore: A Guide
  9. Progressive Wage Model: Minimum Wage Laws in Singapore
  10. CPF-Payable Contributions in Singapore: A Guide for Employers
  11. A Guide to Company Leave Entitlements in Singapore
  12. Sick Leave Entitlements for Employees in Singapore
  13. What is the Difference Between Wages, Salaries and Remuneration?
  14. Ex Gratia Payments: What are They & When do Employers Pay Them?
  15. Who is Covered Under the Singapore Employment Act?
  16. Employment Rights of Interns and Trainees in Singapore
  17. Employee Salary: Calculations, Deductions, Unpaid Salary & More
  18. CPF Contribution of Employees and Employers, Rates & More
  19. Can Your Boss Ask You to Work on a Public Holiday in Singapore?
  20. How to Write a Fair and Accurate Employee Reference Letter
  21. What is the employer's golden rule in the prevention of workplace injuries?
  22. Every Parent’s Guide to Childcare Leave in Singapore
  23. Death of an Employee in Singapore: What Should Employers Do?
Employment Contracts
  1. Are Codes of Conduct Legally Binding in Singapore?
  2. Morality Clauses in Contracts: What is Considered a Breach?
  3. Employment Bond: What is It & Can It be Enforced in Singapore?
  4. Contracts OF Service vs Contracts FOR Service in Singapore: What’s the Difference?
  5. Is Your Non-Compete Clause Enforceable in Singapore?
  6. What are Non-Solicitation Clauses? Are They Enforceable in Singapore?
  7. Must You Pay Liquidated Damages to Terminate Your Contract?
Letting Go Of Employees
  1. Retrenchment in Singapore: Employer Obligations
  2. What to Know About Resigning from Your Singapore Job
  3. When Should Singapore Employers Use a Deed of Release?
  4. Blacklisting an Employee in Singapore: Is It Legal?
  5. What Happens at the Termination of Employment in Singapore?
  6. Retrenched in Singapore? Know Your Employee Rights
Employment Disputes
  1. Handling Employee Misconduct at the Workplace in Singapore
  2. Working Remotely in Singapore for an Overseas Company: Legal Issues to Note
  3. Victim of Workplace Abuse in Singapore: What to Do
  4. 6 Common Employment Disputes & What You Can Do
  5. Help! My Job Offer Got Rescinded, What Can I Do?
  6. Can My Employer Cut My Pay if I Choose to Work From Home?
  7. Where to Get Help for an Employment Dispute in Singapore
  8. Guide to Choosing a Good Employment Lawyer in Singapore
  9. Unfair Dismissal From Your Singapore Job: What to Do
  10. All You Need to Know About the Employment Claims Tribunals
  11. How to Claim Compensation for an Occupational Disease in Singapore
  12. Discriminatory Hiring: Penalties Against Employers in Singapore