For all employees, the employment contract is the most important document as it specifies the terms and conditions of employment between you and your employee.
Below are important TO DOS that you should be aware of:
Reporting Employee Earnings
Employers are required to prepare tax forms for all employees to report their renumeration every year under the Income Tax Act.
Central Provident Fund (CPF) Contributions
CPF contribution is mandatory for employees earning more than $50 SGD a month. As of 2017, the maximum contribution rate for employer and employee is 17% and 20% respectively and can be lower depending on certain factors such as age, permanent resident status, etc.
For low-skilled and unskilled foreign employees a Foreign Worker Levy (FWL) is collected by the government. The foreign worker levy is a pricing control mechanism to regulate the demand of foreign workers in Singapore.
Hiring Foreign Employees
Most companies in Singapore hire foreign talent to supplement their local workforce. Under the Employment Act, a foreigner must have a valid work visa to be able to work in Singapore. If you wish to hire a foreigner, you will need to apply for a valid work pass or work permit on his/her behalf before he/she can commence employment with you. Please note that certain work passes place a restriction or ceiling on the number of foreign employees you can hire.
The foreign work force is comprised of three main groups:
- Skilled professionals (e.g. software engineers, doctors, etc) are issued an Employment Pass.
- Semi-skilled professionals (e.g chefs, administrative assistants) are issued an S Pass.
- Unskilled professionals (construction workers, domestic help) are issued a work permit (R Pass).