Employing foreign talent is a crucial aspect that fosters business growth and brings diverse skill sets to your SME. To engage skilled foreign workers, certain statutory requirements must be met by employers in the employment contract when hiring employees in Singapore. The Employment Act governs the employer-employee relationship in Singapore, and the terms of an employment contract must comply with specific restrictions outlined in the Act. A standard employment contract in Singapore typically includes the following elements:

1. Application And Categorized Types For Work Passes:

– Work Permit: Intended for unskilled and semi-skilled foreign employees in sectors like construction, manufacturing, marine, process, or services.
– S Pass: Designed for mid-level skilled professionals with specialized roles, subject to a minimum qualifying salary.
– Employment Pass (EP): Sought after by highly skilled foreign professionals, managers, and executives, with a minimum salary requirement.

2. Importance Of Security Bond For Foreign Employees:

– Employers must provide a security bond of $5,000 for non-Malaysian migrant workers, fostering commitment between the government and the parties involved.
– The bond must be purchased from a bank or insurance company before the employee’s arrival in Singapore.

3. Fair Employment Practices And Guidelines: Salary Payment On Time:

– Employers are encouraged to hire based on merits, promoting fairness and respect in the workplace.
– Monthly salary details, including fixed income and allowances, must be declared to the Ministry of Manpower (MOM) for S Pass or Work Permit applications.
– Payment should be made before the seventh day of the following month.

4. Tax Clearance For Foreign Employees:

– Employers must ensure non-citizen foreign employees settle all owed taxes before leaving their position or the country for over three months.
– One month’s advance notice and tax clearance from the Inland Revenue Authority of Singapore (IRAS) are mandatory.

5. Medical Insurance Is Mandatory For Foreign Workers:

– Mandatory for S Pass and Work Permit holders, health insurance coverage should include basic and secondary healthcare costs.
– Minimum coverage of $15,000 per annum is required, covering inpatient care, day surgeries, and outpatient procedures.

6. Foreign Worker Levy Payment For S Pass & Work Permit Holders:

– Employers must promptly and fully pay the monthly foreign worker levy for S Pass and Work Permit holders.
– Payment can be made through GIRO or PayNow QR on specified dates.

7. Always Remember To Cancel Work Permit Within A Week Of Employment End:

– Work visas must be terminated within a week of employment termination, notice of departure, or the worker’s last day.
– Employers are responsible for repatriation costs, including airfare with checked baggage.

Understanding and adhering to these considerations will ensure a smooth and compliant hiring process for foreign workers in Singapore.


If you have any company-related queries, you may email us at [email protected]. When in doubt, seek legal advice or consult an experienced licensed Employment Agency with the Ministry of Manpower.

Yours Sincerely,
The editorial team at Singapore Employment Agency

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Little Big Employment Agency Pte Ltd is a licensed Employment Agency with the Ministry of Manpower with license number 19C9790.