First-Time Employer?

Here's What You Need to Know in Singapore

Imagine you're a new entrepreneur, ready to take your business to the next level. You're about to employ your first staff member, but you're swamped with concerns about compliance and administrative duties. It's like stepping into the shoes of Peter Parker in "Spider-Man: Homecoming"—exciting but daunting as you realise the responsibilities that come with new powers.

Hiring your first employee is a significant milestone, but it comes with its share of headaches. From understanding the Employment Act to managing CPF contributions, the process can be overwhelming. But with the right knowledge and tools, you can navigate these complexities smoothly.

General Recruitment Procedures

The Singaporean workforce is diverse, encompassing different races, genders, ages, and sexualities. This diversity means employers must adhere to fair HR practices during recruitment. According to the Singapore Ministry of Manpower, these guidelines include:

  • Employing a merit-based system.
  • Clearly communicating selection criteria.
  • Considering skills, abilities, and experience without bias.
  • Avoiding discriminatory job advertisements.
  • Conducting relevant tests and interviews.
  • Requesting only necessary personal information.

What You Need to Know Before Hiring Employees in Singapore

  • Employment Act (EA) : Ensure compliance with statutory requirements under the Employment Act and common law. This Act protects most employees except managers earning above S$4,500, seafarers, domestic workers, and civil service employees.
  • Employment of Foreign Manpower Act (EFMA) : If you plan to hire foreign workers, you need to comply with the EFMA. This includes ensuring proper work passes like Employment Pass (EP), S Pass, or Work Permit.
  • Singapore Employment Contract : Your employment contract should include key terms like job scope, working hours, salary, and leave entitlements.
  • Central Provident Fund (CPF) : As an employer, you're responsible for both employer and employee CPF contributions, based on the employee's total monthly wages.
  • Skills Development Levy (SDL) : You must also contribute to the SDL for all employees, which funds the training and development of the workforce.

CPF Contributions: Employer Responsibilities

The CPF system ensures employees save for retirement, healthcare, and housing needs. As an employer, here's what you need to know:

  • Paying Contributions: You must pay both the employer’s and employee’s share of CPF contributions monthly. This must be done by the end of the calendar month.
  • Recovering Employee's Share: Deduct the employee’s share from their wages for the same month.
  • Error Handling: If you miss a deduction due to an error, you must pay the contributions to the Board first and get written consent from the employee or the Board to recover the missed amount within six months.
  • Applying for CPF Submission Number: As soon as you plan to hire, apply for a CPF Submission Number using your Singpass and Unique Entity Number (UEN).

For detailed steps on the CPF submission process, visit the CPF Employer Guide.

Practical Steps for a New Employer

  1. Apply for CPF Submission Number (CSN): Do this as soon as you hire your first employee. You’ll need your Singpass and UEN.
  2. Set Up Direct Debit: Once your application is approved, set up direct debit to facilitate smooth payments.
  3. Meet Deadlines: CPF contributions are due by the last day of the month, with enforcement actions for late payments starting after the 14th of the following month.
  4. Check Records: Always review your Record of Payment (ROP) to ensure accuracy.

Final Thoughts

Employing your first staff member is an exhilarating step, akin to Tony Stark creating his first Iron Man suit. The challenges may seem insurmountable, but with the right support, they can be managed.

Don't let the complexities of recruitment, CPF submissions, and HR support services hold you back. Accounting Superhero is here to assist, ensuring you comply with all regulations and focus on what truly matters—growing your business. Contact us today to make your hiring process as smooth as possible.


What You Need to Know Before Hiring Employees in Singapore