Looking for a PEO in Singapore? Here’s what you need to know

The island nation of Singapore is increasingly attractive to employers worldwide looking for top talent. As the most globalized economy in the world, with an educated and talented workforce known for its cross-cultural communication and collaboration skills, Singapore offers a wide range of opportunities for companies in virtually any industry.

Hiring internationally from another country presents a unique set of challenges. It's critical to understand and comply with that country's employment laws to avoid problems that may bring serious financial, legal, and reputational consequences. Unless you have specialized knowledge or experience in handling Singaporean employment regulations, for instance, it's best to enlist expert help.

One way to do so is to engage the services of a professional employer organization (PEO). As a co-employer of your staff, a PEO partner will handle HR functions, including onboarding, payroll, benefits administration, and taxes, while you and your new team member focus on achieving your business goals.

Let's take a closer look at what's involved when hiring talent in Singapore, and how a PEO can help.

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What is a professional employer organization (PEO)?

A professional employer organization (PEO) acts as a co-employer for your Singapore team members, handling payroll, benefits, taxes, and local compliance while you maintain control over daily operations.

Here's how the responsibilities split:

• You handle: Day-to-day management, performance, company culture, and strategic direction
• PEO handles: Payroll processing, tax filings, benefits administration, and employment law compliance

It's essentially a way to hire in Singapore without the complexity of establishing your own legal entity.

Why hire in Singapore

Singapore stands out as a global hub for talent. Here's why it's attractive for international hiring:

• Skilled workforce: Highly educated, multilingual professionals with strong technical abilities
• Strategic location: Gateway to the Asia-Pacific market with business-friendly policies
• Industry depth: Access to talent pools across finance, technology, and other key sectors

This combination makes Singapore ideal for building distributed teams.

Benefits of using a PEO in Singapore

Singapore is one of the most business-friendly countries in the world, so it's a great place to set up an entity and recruit talent. But handling all the compliance, admin, and logistics in-house can become burdensome. This is where a PEO can help.

When you work with a PEO, the PEO becomes the co-employer of your staff and handles all your HR functions. You still manage the day-to-day activities of your employees, but the PEO takes care of payroll, benefits, and other routine functions. This arrangement offers many benefits, not the least of which is the opportunity to offer a more attractive benefits package to overseas employees, thanks to the existing relationships provided by the PEO.

Contracting with a Singapore PEO also provides:

• Streamlined onboarding: A PEO with experience in Singapore makes it easy to get new employees up and running quickly. They can easily prepare contracts and new hire paperwork that adheres to local laws and get your workers set up for payroll in the local currency. The process is faster and more organized, getting your new team member off on the right foot.
• Compliance with the Employment Act: PEOs take their responsibility to maintain compliance seriously, which means they stay abreast of all the latest developments in local employment laws to ensure their clients stay on the right side of the law. From the rules about contracts and terminations to correctly calculating social contributions, the PEO knows what has to be done and when, so you don't make mistakes that hurt your company's reputation or bottom line.
• Cost savings: It might seem counterintuitive to pay for a service to perform functions that your in-house HR department typically handles, but in the long term, a PEO can save your company money. For instance, they might be able to negotiate better rates when it comes to local benefits, and help you avoid compliance mistakes that might lead to costly fines.

Working with a PEO to manage HR for overseas employees also saves time. Instead of devoting their time and skills to research and paperwork, your HR team can focus on more strategic priorities that help your company reach its goals.

Employment law in Singapore

So, what makes Singapore employment law tricky? The complexity leads to costly mistakes—more than 30% of small businesses face fines annually for payroll errors alone.

Common compliance pitfalls include:

• Employee misclassification: Treating employees as contractors when they should be classified as full-time staff
• Payroll errors: Incorrect calculations for CPF contributions, SDL, or overtime
• Contract violations: Missing required terms or failing to follow termination procedures

The Ministry of Manpower (MOM), the government body overseeing employment practices in Singapore, prioritizes employee rights and penalizes companies that don't comply with employment laws. In addition to fines and potential jail time, the Ministry maintains a public record of employers who violate the Employment Act. This record includes offenses like unpaid wages, forced overtime, or denial of earned time off.

Working with a PEO in Singapore can help protect your business against the costs and embarrassment of employment law violations. They can handle the intricacies of managing employees and keeping you compliant with applicable laws such as the following:

Working hours and time off

Singapore follows a five-day, 44-hour workweek. Overtime pay eligibility depends on whether employees are covered under the Employment Act and earn a monthly basic salary not exceeding SGD 2,600 or an hourly basic rate of pay not exceeding SGD 13.60. Overtime is calculated at 1.5 times the hourly rate, with a maximum of 72 overtime hours allowed per month unless exempted by the Ministry of Manpower (MOM). Certain categories, such as managers and executives, may have different regulations.

In addition to the 10 standard holidays per year, employees get at least seven days of paid time off. Most employers offer between 14 and 22 days off per year. Employees can also take up to 14 days of sick leave (60 days for a hospitalization), up to 16 weeks of maternity leave, and up to two weeks of paternity leave. Singapore provides reimbursement for maternity leave via Government-Paid Maternity Leave.

Employment contracts

Although Singapore doesn't require written employment contracts, the Ministry of Manpower strongly recommends written contracts for all employees. Contracts should include the employment date and expected duration (for contract positions) and details about the probationary period, which is typically three to six months.

Minimum wage

Singapore does not have a minimum wage, but hourly employees who work outside of regular working hours or more than 44 hours are to be paid 1.5 times their regular wage for overtime hours. Employees must be paid at least monthly within seven days of the end of the pay period.

It's important to note that non-workmen earning more than SGD 2,600 per month and workmen earning more than SGD 4,500 per month can't claim overtime pay.

Contributions to the Central Provident Fund (CPF)

Employees in Singapore must contribute to a Central Provident Fund, a savings plan designed to cover housing and healthcare costs in retirement. Employers must set up these accounts for workers and calculate contributions to withhold automatically. The calculations aren't necessarily straightforward, as the individual's earnings, age, current government plans, and industry rules all factor into the contribution. Employers also need to contribute to these accounts.

Skills Development Fund

Employers must contribute to Singapore's Skills Development Fund on behalf of each employee, including foreign employees and those employed on casual, part-time, or temporary basis This is a fund that issues grants to employers who send their workers for training. The Skills Development Levy (SDL) is set at 0.25% of each employee's monthly remuneration. For employees earning below SGD 800 per month, the SDL contribution is a minimum of SGD 2. For higher earners, the maximum SDL contribution is capped at SGD 11.25 monthly for those earning more than SGD 4,500.

Tax filings

Singapore tax law requires employers to prepare and submit multiple tax forms for each employee by March 1 each year and provide copies to employees so they can submit their own income tax filing.

These are just some of the provisions of the Employment Act designed to protect employees. To learn more, check out our comprehensive guide to hiring and paying employees in Singapore. You can also use Oyster's free cost calculator to get a detailed breakdown of the cost of hiring in Singapore.

PEO costs in Singapore

Most Singapore PEOs charge a flat monthly fee per employee. But what's actually included in that fee?

Typically included:

• Payroll processing and tax filings
• Benefits administration
• Ongoing compliance support

Potential extra costs:

• Employee onboarding and offboarding
• Special HR support or complex queries
• Termination processing

Look for providers with transparent, all-inclusive pricing to avoid surprises.

How to choose a PEO in Singapore

Not all PEOs are created equal. When choosing a partner for your Singapore team, consider these factors:

• Local Expertise: Does the provider have deep, in-house knowledge of Singapore's Employment Act, CPF contributions, and other local regulations?
• Technology and Platform: Is the platform easy to use for both your HR team and your employees? Can it handle onboarding, payroll, and benefits in one place?
• Support Model: When you have a complex question, can you speak to a human expert? Understand the level of support included in your plan.
• Transparent Pricing: Are the costs clear and predictable? Avoid partners with hidden fees for standard services like terminations or HR guidance.

A PEO alternative: Oyster's global employment platform

Not sure if a PEO is right for you? Here's how it compares to other options:

The challenge with traditional EORs? You'll need separate partners for each country you expand into.

A better alternative is to use a global employment platform like Oyster. Our automated platform offers an affordable, compliant, and streamlined way to hire, pay, and manage an international workforce, with global expansion services making it easy to hire talent in 180+ countries.

Oyster is ideal when you want to hire internationally from multiple countries, including Singapore. Instead of working with multiple PEOs or EORs around the world, our platform makes it possible to keep track of everyone and comply with local laws in one place. From payroll and benefits to workplace culture, Oyster makes it simple for your company to go global with just a few clicks.

Getting started with global employment in Singapore

Hiring in Singapore opens up a world of opportunity, but navigating its employment landscape requires expertise. Whether you choose a PEO or a more comprehensive global employment partner, the right support ensures you can hire quickly and compliantly. By handling the complexities of payroll, benefits, and local laws, you can focus on building a great team and growing your business. If you're ready to access top talent without the operational headaches, Oyster can help.

Start hiring globally with a platform that combines technology with human expertise.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. We let growing companies give valued international team members the experience they deserve, without the usual headaches and expense of hiring abroad.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll and great local benefits and perks.