Along with Hong Kong, South Korea, and Taiwan, Singapore is one of the original Four Asian Tigers. The Singaporean economy is known as one of the most competitive and business-friendly, having a highly developed economy that is among the freest in the world. Unemployment is very low and the government is attempting to restructure Singapore’s economy by weaning its dependence on foreign labor, addressing weak productivity, and increasing Singaporean wages.
In this type of highly organized and structured economy, developing legally sound labor contracts and following labor laws to the letter is vital. Employment contracts need to spell out the terms of the employee’s compensation, benefits, and termination requirements. Why not let Globalization Partners do that for you?
By using Globalization Partners’ Global PEO Service, Singapore’s strict labor and legal requirements can be easily met. Contact us if you need more information about statutory or market norm benefits in Singapore or if would like to learn more about our Global Employer of Record Platform, whereby we hire your employees on our existing PEO in Singapore.
Tips to keep in mind when negotiating Employment in Singapore
An offer letter and employment contract in Singapore should always state the salary and any compensation amounts in Singapore dollars rather than a foreign currency. While bonuses are not required, they are a market norm in the country and usually are equal to 2 -3 months’ salary when the economy is strong.
Basic insurance is provided through the national system; however, supplementary health insurance may be provided to the employee as an added benefit. Most executives request supplementary health and life insurance, but a small company may provide an allowance in lieu of arranging insurance. It is generally recommended to budget 20% on top of gross salary to include all benefits costs when hiring an employee in Singapore. This also includes the CPF (Central Providence Fund) allocation – the main nationally mandated benefit and social security expense.
Probationary periods and termination:
A probation period of 3-6 months may be agreed upon in the employment contract, during which there is a shorter notice period; this is not a statutory requirement. One month’s termination notice on behalf of the employer or employee is the generally agreed term, but this is not fixed.