Contractor Payroll in Singapore

Positioning a candidate internationally means navigating unfamiliar tax and payroll systems. Not only does this generally mean more work for you, but even small missteps can have serious financial or even legal consequences.

If you want to successfully place a contractor, you should first familiarize yourself with the contractor payroll process in Singapore, as well as how you can make the situation simpler.

Contractor Payroll in Singapore

Payroll options in Singapore

There are several different options for payroll in Singapore:

  • The client can provide payroll for the contractor, but not all clients offer this for temporary workers.  
  • The contractor can do it on their own, but this creates serious risk for the end client and possibly your agency, as well. Like most people, many contractors do not specialise in Singapore’s tax system, nor do they always have the time or means to pore over complex tax returns.
  • Your contractor can use a local payroll company.

The third option is the simplest and quickest. An even simpler and quicker option is to use an Umbrella Company, as they offer the same services as a local payroll provider in addition to other services that simplify international assignments (such as Work Permit sponsorship).

Check out our FAQ for specific quotes on payroll providers and Umbrella Companies. 

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Questions and Answers about

Questions and Answers about Payroll in Singapore

Q: How does payroll work in Singapore?
A: Your employer (the company sponsoring your visa) pays the candidate on a monthly basis. They deduct social security - where employers contribute 16% of gross salary and employees contribute 20% of gross salary into the CPF. They also deduct income tax - which is progressive and varies from 0-20% (Non-residents pay 15% on employment income and 20% on director's fees, consulting fees and other income) pendant on salary level. These deductions are made at source and paid to the Singapore tax authorities. Candidates are able to offset their taxable income with relevant business expenses. The World Bank estimates it takes employers in Singapore 10 man days to ensure compliance with payroll and labour taxes each year.

Q: What is the monthly cost to outsource payroll in Singapore?
A: $30 USD per person for simple pay-roll administration (calculation of tax and social security contributions)

Q: What is the estimated net retention for a contractor in Singapore earning USD 1000 per day?
A: Between 83-86%

Q: What is the minimum salary required per month in Singapore when a candidate is sponsored on an Work Permit?
A: $4000 SGD