Hiring your first employee is one of the most significant steps in building a Singapore business. It is also one of the most administratively complex. Between CPF registrations, employment contract requirements, MOM obligations, and the Fair Consideration Framework, there is a meaningful compliance burden that catches many first-time employers off guard.

This guide covers every step a founder needs to take before, during, and after hiring their first employee in Singapore in 2026.

Step 1: Before You Advertise — Know Your Obligations Under the Employment Act

Singapore’s Employment Act is the primary legislation governing employment relationships. Most employees in Singapore are covered by the Act, which sets minimum standards for salary payment, overtime, leave entitlements, and termination notice. From 1 April 2019, the Act was extended to cover all employees (including managers and executives) regardless of salary level, so all your hires — from operations staff to your first director-level hire — fall under its umbrella.

Before advertising the role, familiarise yourself with these core Employment Act entitlements:

Annual leave: A minimum of 7 days of paid annual leave per year, increasing by one day per year of service up to 14 days. This applies to employees who have served at least 3 months.

Sick leave: 5 days outpatient sick leave (14 days if hospitalised) per year for employees who have served at least 6 months, prorated for shorter service.

Overtime: Non-workmen earning up to S$2,600/month and workmen earning up to S$4,500/month are entitled to overtime pay at 1.5 times the hourly basic rate.

Public holidays: 11 gazetted public holidays per year, with a substitute day or extra pay if a public holiday falls on a rest day.

Step 2: Fair Consideration Framework — Post the Job First

Before hiring a foreign Employment Pass (EP) holder, you must first post the job on MyCareersFuture.sg for at least 14 calendar days if your company has 10 or more employees. This is mandatory under the Fair Consideration Framework (FCF).

For your first hire as a small company (fewer than 10 employees), this posting requirement does not apply. However, TAFEP (Tripartite Alliance for Fair and Progressive Employment Practices) expects all employers to apply fair and merit-based practices regardless of company size. Documenting your hiring decision — why you selected this candidate over others — is good practice from day one.

If you are hiring a foreign employee who requires an Employment Pass or S Pass, the application must be made via the MOM EP Online portal. Note that qualifying salaries were raised significantly from January 2027: EP holders will require a minimum fixed monthly salary of S$6,000 (higher for financial services and experienced candidates), and S Pass holders will require S$3,600.

Step 3: The Employment Contract — What Must Be Included

Singapore law does not require a written contract, but the Employment Act requires employers to issue a Key Employment Terms (KETs) document to all employees covered by the Act within 14 days of employment commencement. In practice, a comprehensive written employment contract that incorporates the KETs is essential for any employer.

A compliant employment contract for a Singapore employee should include:

Full name, job title, and commencement date. Salary, salary period, and payment method. Overtime rate (if applicable). Leave entitlements including annual, sick, and maternity/paternity leave. Notice period for termination by either party. Confidentiality and intellectual property clauses. Non-solicitation provisions (note: non-compete clauses are enforceable in Singapore but must be reasonable in scope and duration to be upheld by courts).

For employees who may handle sensitive data, include a Personal Data Protection Act (PDPA) acknowledgement and, if your company processes personal data, consider whether a Data Protection Officer (DPO) appointment is now required.

Step 4: CPF Registration and Contributions

This is the step most first-time employers underestimate. CPF (Central Provident Fund) contributions are mandatory for Singapore citizens and Permanent Residents employed under a contract of service. As the employer, you must register with CPF Board before your first Singapore citizen or PR employee starts work.

CPF contribution rates for 2026 for employees aged 55 and below:

Employer contribution: 17% of ordinary wages (capped at ordinary wages of S$6,800/month for CPF purposes).

Employee contribution: 20% of ordinary wages (deducted from salary).

Total CPF contribution: 37% of ordinary wages, with a combined cap of S$2,516/month for the ordinary wage ceiling.

CPF contributions must be paid by the 14th of the following month (or the last day of the month for GIRO submissions). Late payment attracts a late payment interest charge of 1.5% per month. This is not optional — CPF Board actively enforces compliance, and repeated late payment can result in prosecution.

For employees on Skills Development Levy (SDL) obligations, note that SDL is payable at 0.25% of each employee’s gross wages up to a maximum of S$11.25 per month and a minimum of S$2 per month. SDL is administered separately from CPF and is submitted via the CPF e-Submit@web system.

Step 5: MOM Registration and Payroll Records

You do not need to register the employment relationship with MOM unless your employee requires a work pass. However, you are required to maintain proper payroll records for at least 2 years under the Employment Act. These records must include:

  • Employee’s salary, allowances, and deductions for each salary period
  • Number of hours of overtime worked
  • Leave taken and leave balance
  • CPF contributions paid

From 1 April 2016, all employers with 10 or more employees must issue itemised payslips to every employee. Even with fewer than 10 employees, issuing payslips is strongly recommended as it protects you from disputes about what was paid.

Step 6: IRAS and Year-End Tax Obligations

At the end of each calendar year, you are required to submit IR8A forms to IRAS for every employee who received income during the year. The deadline for employer submissions to IRAS is 1 March of the following year. If your company is part of the Auto-Inclusion Scheme (AIS), these figures are submitted electronically and appear directly in each employee’s personal income tax return.

If an employee ceases employment before the end of the calendar year and is a foreign national, you must file an IR21 (Tax Clearance) form with IRAS. This must be filed at least one month before the employee’s last day of work, and you must withhold all monies due to the employee until IRAS issues a tax clearance certificate. Failure to do so can result in the employer being personally liable for the employee’s unpaid taxes.

Step 7: Work Safety and Insurance

Under the Work Injury Compensation Act (WICA), employers are required to purchase work injury compensation insurance for all employees doing manual work, regardless of salary, and for non-manual employees earning S$2,600/month or less. The insurance covers medical costs, hospitalisation, and disability compensation for work-related accidents.

Even if your first employee is an office worker earning above the threshold, many insurers offer combined employer liability policies that cover both WICA-mandated and voluntary categories. This is advisable for any employer with staff working on premises.

Common First-Hire Mistakes to Avoid

The most common mistakes made by first-time Singapore employers are: treating an employee as a contractor to avoid CPF obligations (IRAS and CPF Board actively audit this); failing to register for CPF before the first payroll run; not issuing Key Employment Terms within the required 14-day window; and failing to set up a proper payroll system that correctly computes CPF contributions on variable components.

If your first hire is a foreign national requiring an Employment Pass, the timeline for pass approval must be factored into your onboarding plan. Allow 3–5 weeks for standard EP applications, and ensure the candidate does not begin work until the pass is approved and issued — working before pass issuance is an immigration offence for both the employer and the employee.

Getting the HR Foundation Right

Hiring your first employee in Singapore is not complicated once you understand the framework, but the steps must be done in the right order and with the right documentation. A clean employment contract, timely CPF registration, proper payroll records, and accurate year-end tax submissions form the foundation of a compliant employer.

Singapore Secretary Services works with founders at every stage of company growth, from annual compliance filings to supporting the corporate governance that underpins responsible employment. Speak to us about your company’s secretarial and compliance needs as you scale.