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UPDATED JUL 6, 2026💡 Everything you need to know to hire and manage employees in Singapore through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.
At a Glance
| Item | Detail |
|---|---|
| Currency | Singapore Dollar (SGD) |
| Payroll cycle | Monthly. Toku runs one payroll per month in Singapore. |
| Estimated employer costs on top of salary | Approximately 17-18% for Singapore citizens and permanent residents (CPF is capped, so the effective rate falls at higher salaries); minimal for foreign employees, who are outside CPF |
| Onboarding lead time | 5-7 business days |
| Standard working week | 44 hours |
| Probation period | 6 months (per Toku's employment agreement) |
| Annual leave | 7 days statutory in year one, rising to 14 days by year eight (most employers offer more) |
| 13th month salary | Not required (the Annual Wage Supplement is common market practice) |
| Minimum notice on termination | 1 day to 4 weeks depending on length of service (contracts often set longer) |
Onboarding a New Hire
Plan for 5-7 business days between submitting a new hire and their start date. Your new hire needs a valid Employment Pass or other work authorization before starting, and provides their NRIC or FIN; Toku handles CPF registration for citizens and permanent residents.
Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.
Employer Costs
On top of gross salary, employers in Singapore pay the following:
| Cost | Rate | Notes |
|---|---|---|
| CPF (employer share) | 17% for employees aged 55 and below | Citizens and permanent residents only; wage ceiling of SGD 8,000 per month and SGD 102,000 per year; lower rates apply above age 55 |
| Skills Development Levy | 0.25% of monthly wages | All employees; capped at SGD 11.25 per employee per month |
As a rule of thumb, total cost of employment is roughly 100-118% of gross salary: near the top of that range for citizens and permanent residents aged 55 and below earning under the CPF ceiling, and near the bottom for foreign employees, who are outside the CPF system. There is no mandatory 13th month salary, though many employers pay an Annual Wage Supplement by contract.
Employees who are citizens or permanent residents pay their own CPF share (20% for those aged 55 and below, capped at the same wage ceiling). Income tax is progressive from 0% to 24% and is generally not withheld monthly for residents: employees settle it directly with IRAS after year-end, while Toku reports employment income on their behalf. Employee costs are deducted from gross salary, not charged on top. Toku calculates and remits all of the above.
Compensation & Payroll
Toku runs one payroll per month in Singapore, and employees receive an itemized payslip each cycle. Singapore has no universal minimum wage (sector-specific Progressive Wage Models cover certain occupations such as cleaning, security, and retail). Salaries are paid in SGD, and any Annual Wage Supplement or bonus is governed by the employment contract.
Employment Contracts & Probation
- Toku issues a compliant local employment agreement for every hire, including the Key Employment Terms Singapore law requires in writing.
- Indefinite (permanent) contracts are standard; fixed-term contracts are also permitted, and consecutive renewals count as continuous employment for statutory entitlements.
- Probation under Toku's employment agreement is 6 months. Probation is not mandated by statute, and a shorter notice period applies during probation as set out in the agreement.
Working Hours
The standard working week is 44 hours, typically 8 hours per day (or 9 hours on a 5-day week), with one rest day per week and no more than six consecutive hours without a break. The Employment Act's hours and overtime rules (including 1.5x overtime pay, a 12-hour daily cap, and a 72-hour monthly overtime cap) only apply to lower-salary workers: managers and executives above the salary thresholds are outside those provisions, and their hours are governed by the employment agreement.
Leave Entitlements
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | 7 days statutory in year one, plus 1 day per year of service up to 14 days | Employer |
| Sick leave | 14 days outpatient plus up to 60 days including hospitalization, after 6 months of service | Employer |
| Maternity leave | 16 weeks (Singapore citizen child) or 12 weeks (non-citizen child) at full pay | Employer and Government share (citizen births); Employer (non-citizen) |
| Paternity leave | 4 weeks (citizen children born from 1 April 2025) | Government (capped at SGD 2,500 per week) |
| Shared parental leave | 10 weeks from 1 April 2026 | Government (capped at SGD 2,500 per week) |
| Childcare leave | 6 days per year per parent (citizen child under 7) | Employer (3 days) and Government (3 days) |
| Bereavement leave | Not statutory; 2-3 days is market practice | Employer |
Government funding covers much of the parental leave cost for Singapore citizen children, including reimbursement of the later weeks of maternity leave. Employees on maternity, paternity, shared parental, or adoption leave cannot be dismissed while on leave.
Public Holidays (2026)
Singapore has 11 gazetted public holidays. When a holiday falls on a Sunday, the following Monday is a public holiday in lieu (in 2026: 1 June for Vesak Day, 10 August for National Day, and 9 November for Deepavali). Hari Raya dates are subject to lunar confirmation.
| Date | Holiday |
|---|---|
| 1 January | New Year's Day |
| 17 February | Chinese New Year |
| 18 February | Chinese New Year (Day 2) |
| 21 March | Hari Raya Puasa |
| 3 April | Good Friday |
| 1 May | Labour Day |
| 27 May | Hari Raya Haji |
| 31 May | Vesak Day (Monday 1 June in lieu) |
| 9 August | National Day (Monday 10 August in lieu) |
| 8 November | Deepavali (Monday 9 November in lieu) |
| 25 December | Christmas Day |
Employees required to work on a public holiday are entitled to an extra day's salary at the basic rate.
Benefits: Required vs. Common Extras
Statutory (included in employer costs above): CPF contributions covering retirement, healthcare (MediSave), and housing for citizens and permanent residents, work injury compensation coverage, MediShield Life basic health insurance for citizens and PRs, and the statutory leave entitlements above.
Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.
Common extras in the Singapore market include group hospitalization and surgical insurance, dental coverage, wellness benefits, transport and mobile allowances, professional development budgets, and the Annual Wage Supplement. Equity participation is widespread in tech and startups. Most benefits in kind are taxable to the employee; Toku can advise on the cost impact of any benefits you want to add.
Ending Employment
Singapore is comparatively employer-friendly, but terminations must still have just cause and follow a fair process, and misconduct dismissals require a proper inquiry first. Involve Toku early: final pay is due on or within a few days of the last day, and wrongful dismissal claims can be filed within a month. For the process, see How to Terminate an Employee or Contractor.
| Service | Notice |
|---|---|
| Less than 26 weeks | 1 day |
| 26 weeks to less than 2 years | 1 week |
| 2 to less than 5 years | 2 weeks |
| 5 years or more | 4 weeks |
These are statutory minimums; the contractual notice period (which must be equal for both sides) usually exceeds them, and payment in lieu of notice is permitted. Severance is not mandatory for ordinary terminations. For redundancy, employees with at least two years of service are eligible for retrenchment benefits, with the market norm at two weeks' to one month's salary per year of service.
Hiring Someone from Overseas?
Foreign nationals need a valid work pass: the main route for professionals is the Employment Pass (minimum salary SGD 5,600 per month, or SGD 6,200 in financial services, assessed under the points-based COMPASS framework), with the S Pass covering mid-skilled roles. Roles must generally be advertised for at least 14 days before an EP application, and processing takes one to eight weeks. Talk to Toku before extending an offer to a candidate who needs sponsorship.
Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.