Hiring your first employee is a significant milestone for any Singapore company — and one that comes with a set of statutory obligations that every employer must meet from day one. Get it right and you build a compliant, productive team. Get it wrong and you face MOM investigations, CPF penalties, and potential employment disputes.

This checklist covers every step a Singapore employer must take when hiring their first employee in 2026: from the employment contract and CPF registration to payslips, leave entitlements, and work pass obligations for foreign hires.

Step 1: Decide Between an Employee and a Contractor

Before you hire, confirm whether the arrangement is an employment relationship or an independent contractor engagement. The distinction matters because CPF contributions, employment benefits, and the Employment Act apply only to employees — not independent contractors.

MOM and IRAS apply a “substance over form” test. Key indicators of employment include: the company controls how, when, and where work is done; the worker cannot subcontract the work; the worker is economically dependent on one client; and the company provides equipment and tools. If your arrangement looks like employment in substance, it will be treated as employment even if you label the person a “contractor.”

Misclassifying an employee as a contractor is a serious compliance risk. The company may be liable for unpaid CPF contributions (with interest and penalties), unpaid employment benefits, and potential claims under the Employment Act.

Step 2: Draft a Compliant Employment Contract

All employees under the Employment Act must receive a Key Employment Terms (KET) document within 14 days of starting work. The KET must include:

  • Full name of employer and employee
  • Job title and main duties
  • Start date and duration (if fixed-term)
  • Working hours and days
  • Salary (basic rate, allowances, and other components)
  • Fixed allowances and deductions
  • Overtime rate of pay (where applicable)
  • Leave entitlements (annual, sick, maternity/paternity)
  • Notice period
  • Probation period (if any)

The Employment Act covers all employees (except domestic workers and seamen). Employees earning S$2,600 per month or less — and workmen earning S$4,500 per month or less — receive additional protections including overtime pay, rest days, and public holiday pay on top of the base KET requirements.

Step 3: Register with CPF Board as an Employer

The Central Provident Fund (CPF) is Singapore’s mandatory social security savings scheme. Employers must register with CPF Board and make monthly CPF contributions for all Singapore citizen and Permanent Resident employees.

CPF Contribution Rates for 2026

For employees aged 55 and below earning more than S$750 per month, the combined employer and employee CPF contribution rate is 37% of ordinary wages — 17% from the employer and 20% from the employee. The rates reduce for employees over 55. CPF contributions are capped at the Ordinary Wage ceiling of S$7,400 per month (effective from January 2026).

Employers must submit CPF contributions by the 14th of the following month (or the last day of the month for GIRO payments). Late payment incurs interest of 1.5% per month and late payment fees.

Skills Development Levy (SDL)

In addition to CPF, employers must pay the Skills Development Levy (SDL) on the first S$4,500 of each employee’s monthly gross remuneration, at a rate of 0.25% (minimum S$2 per employee per month). SDL is paid together with CPF contributions and supports the SkillsFuture Credit system.

Step 4: Understand Leave Entitlements Under the Employment Act

Annual Leave

Employees with at least three months of service are entitled to paid annual leave. The minimum entitlement starts at seven days per year and increases by one day for each additional year of service, up to a maximum of 14 days under the Employment Act. Many employers offer more than the statutory minimum.

Sick Leave

Employees are entitled to paid outpatient sick leave (up to 14 days per year) and paid hospitalisation leave (up to 60 days per year, inclusive of the 14 outpatient days) once they have been employed for three months. A medical certificate from a company-approved doctor is required.

Maternity and Paternity Leave

Female employees who are Singapore citizens or PRs and have worked for the employer for at least three months are entitled to 16 weeks of paid maternity leave (the first 8 weeks at employer’s cost; the Government reimburses the last 8 weeks). Male employees who are Singapore citizens or PRs are entitled to two weeks of paid paternity leave, fully Government-reimbursed.

Public Holidays

Singapore has 11 gazetted public holidays per year. Employees required to work on a public holiday must receive an additional day’s salary or a day off in lieu.

Step 5: Issue Itemised Payslips

All employers covered by the Employment Act must issue itemised payslips to employees within three days of each salary payment. The payslip must include:

  • Employer’s name and UEN
  • Employee’s name and last four digits of NRIC/FIN
  • Payment period and payment date
  • Basic salary and each allowance component
  • Deductions (CPF employee contribution, salary advance, etc.)
  • Overtime pay (where applicable)
  • Net salary paid

Failure to issue payslips is an offence under the Employment Act, carrying fines of up to S$1,000 for a first offence.

Step 6: Hiring Foreign Employees — Work Pass Requirements

If your first hire is a foreign national, they must hold a valid work pass before commencing employment. The main work pass categories for professionals are:

Employment Pass (EP)

For foreign professionals, managers, and executives. The minimum qualifying salary is S$5,600 per month (S$6,200 for the financial services sector) as at 2026 for new applications. The EP holder’s employer must demonstrate that they have fairly considered Singaporean candidates through the Fair Consideration Framework (FCF) requirements, including job advertising on MyCareersFuture for at least 28 days for roles paying below S$22,500 per month.

S Pass

For mid-skilled workers. Minimum qualifying salary is S$3,600 per month (S$4,000 for financial services). The employer must stay within the S Pass quota — up to 10% of the company’s total workforce in most sectors. The S Pass Dependency Ratio Ceiling (DRC) and levies apply.

COMPASS Assessment

Both EP and S Pass applications are assessed under the COMPASS framework (Complementarity Assessment Framework), which scores applicants on salary, educational qualifications, diversity, and local PMET support. Applications that do not meet the minimum COMPASS score are rejected even if they meet the salary threshold.

Step 7: IRAS Employer Obligations

IR8A Filing

By 1 March each year, employers must submit Form IR8A to IRAS reporting each employee’s earnings for the preceding year. This includes salary, bonuses, benefits-in-kind, and any stock options or share awards. IRAS uses the IR8A data to pre-populate employees’ personal income tax returns. Failure to submit by the deadline attracts penalties.

Form IR21 for Departing Foreign Employees

When a foreign employee ceases employment and leaves Singapore permanently (or for more than three months), the employer must file Form IR21 with IRAS and withhold the employee’s final salary until IRAS issues tax clearance. See our 2026 compliance calendar for key IRAS deadlines.

Step 8: Register for Work Injury Compensation Insurance

Employers must maintain Work Injury Compensation (WIC) insurance for all employees who are manual workers and all non-manual workers earning S$2,600 or less per month. The insurance must be in place before the employee starts work. Failure to maintain adequate WIC insurance is an offence under the Work Injury Compensation Act.

Your Hiring Compliance Checklist at a Glance

  • Confirm employment vs contractor classification
  • Issue Key Employment Terms within 14 days of start date
  • Register as employer with CPF Board before first salary payment
  • Pay CPF and SDL by the 14th of the following month
  • Issue itemised payslips within 3 days of each salary payment
  • Ensure annual leave, sick leave, and public holiday entitlements are applied correctly
  • For foreign hires: obtain valid work pass before commencing work; comply with FCF job advertising requirements
  • Obtain Work Injury Compensation insurance for qualifying employees
  • File IR8A by 1 March each year
  • File IR21 and withhold final pay when a foreign employee departs Singapore permanently

Get Help Setting Up Your Singapore Employment Framework

Raffles Corporate Services assists Singapore companies with employment contract drafting, CPF registration, work pass applications (EP, S Pass), and HR compliance reviews.

Contact us at [email protected] or via WhatsApp at +65 8501 7133.

— The Editorial Team, Raffles Corporate Services