Singapore Employment Act Guide for SMBs: Complete Overview (2026)

The Singapore Employment Act is the main legislation governing the employer-employee relationship in Singapore. It sets out the basic terms and conditions of employment — working hours, overtime, leave, salary payment, and termination — that every employer must comply with.

For SMBs, understanding the Employment Act is critical. Non-compliance can result in fines, prosecution, and reputational damage. The Ministry of Manpower (MOM) actively enforces these provisions, and employees can file claims through the Tripartite Alliance for Dispute Management (TADM). This guide covers everything you need to know.

Who Is Covered by the Employment Act?

The Employment Act covers all employees (local and foreign) who work under a contract of service in Singapore, with three exceptions:

• Domestic workers
• Seafarers
• Statutory board employees or civil servants

Part IV of the Act (which covers rest days, hours of work, and overtime) has additional salary thresholds:

Important: Even employees not covered by Part IV are still protected by the core provisions of the Act — salary payment, leave entitlements, public holidays, and termination procedures.

Working Hours

For employees covered under Part IV, the Employment Act sets clear limits on working hours:

• Maximum 8 hours/day or 44 hours/week
• If working more than 5 days/week: maximum 8 hours/day
• If working 5 days or fewer/week: maximum 9 hours/day (but still 44 hours/week)
• Maximum 12 hours/day including overtime (absolute cap)
• Employees must have a break after 6 consecutive hours of work
• 1 rest day per week (unpaid for daily/hourly-rated workers, paid for monthly-rated)

Overtime Pay

Overtime applies to Part IV employees who work beyond their normal hours. The rules are strict and frequently enforced:

• Rate: 1.5x the hourly basic rate of pay
• Maximum: 72 hours of overtime per month
• Payment deadline: Within 14 days of the last day of the salary period

The hourly basic rate is calculated as:

Special overtime rules apply for work on rest days and public holidays:

Leave Entitlements

The Employment Act mandates several categories of leave. These are minimum entitlements — employers may offer more but cannot offer less.

Annual Leave

Employees who have worked for at least 3 months are entitled to paid annual leave:

• Year 1: 7 days
• Year 2: 8 days
• Increases by 1 day per year of service
• Year 8 onwards: 14 days (maximum under the Act)

Sick Leave

• 14 days paid outpatient sick leave per year
• 60 days paid hospitalisation leave per year (inclusive of the 14 outpatient days)
• Employee must have served at least 3 months and be certified by a company-approved doctor
• Must notify employer within 48 hours of absence

Maternity Leave

• 16 weeks for eligible working mothers (employed for at least 3 months, child is a Singapore citizen)
• First 8 weeks: paid by employer
• Last 8 weeks: reimbursed by the Government (capped at $10,000 per 4 weeks)
• For non-eligible mothers: 8 weeks of employer-paid maternity leave

Paternity Leave

• 2 weeks Government-Paid Paternity Leave (GPPL)
• Child must be a Singapore citizen, father must be lawfully married to the mother
• Must be taken within 16 weeks of the child's birth

Childcare Leave

• 6 days/year per parent for children under 7 years old (3 employer-paid, 3 Government-paid)
• 2 days/year extended childcare leave per parent for children aged 7-12
• Employee must have worked for at least 3 months

Public Holidays

Singapore has 11 gazetted public holidays per year. Employees are entitled to a paid day off for each. If a public holiday falls on a rest day, the next working day is a paid holiday.

• New Year's Day
• Chinese New Year (2 days)
• Good Friday
• Labour Day
• Hari Raya Puasa
• Vesak Day
• Hari Raya Haji
• National Day
• Deepavali
• Christmas Day

Salary & Payment

The Employment Act has strict requirements around salary payment:

• Payment frequency: At least once a month
• Payment deadline: Within 7 days after the end of the salary period
• Overtime payment: Within 14 days of the salary period
• Itemised pay slips: Mandatory for all employees since April 2016. Must include date of payment, basic salary, allowances, deductions, overtime, and net pay
• Deduction limits: Total deductions cannot exceed 50% of salary in any one month (CPF and tax are excluded from this cap)

Termination & Notice Periods

Either party may terminate a contract of service by giving the required notice. If no notice period is specified in the contract, the Employment Act sets minimum notice periods:

Retrenchment: While not mandated by law, MOM's advisory guidelines recommend retrenchment benefits of 2 weeks to 1 month of salary per year of service for employees with at least 2 years of service. The norm is 1 month per year.

Salary in lieu of notice: Either party may pay salary in lieu of notice to end the contract immediately.

CPF Obligations

The Central Provident Fund (CPF) is Singapore's mandatory social security savings scheme. While governed by the CPF Act (not the Employment Act), it is a core employer obligation:

• Employer contribution: Up to 17% of employee's ordinary wages (for employees aged 55 and below)
• Employee contribution: Up to 20% of ordinary wages (for employees aged 55 and below)
• Applies to: Singapore citizens and permanent residents (PRs pay lower rates in the first 2 years)
• Ordinary Wage ceiling: S$6,800/month (2024 onwards)
• Additional Wage ceiling: S$102,000 - total ordinary wages for the year
• Payment deadline: Within 14 days after the end of each month

Use our CPF Calculator to compute employer and employee contributions for different salary levels and age groups.

Other Employer Obligations

• Skills Development Levy (SDL): 0.25% of each employee's monthly remuneration (minimum S$2, maximum S$11.25 per employee). Applies to all employees including foreign workers.
• Self-Help Group Funds (CDAC/MBMF/ECF/SINDA): Monthly contributions based on employee's ethnic group and wage level. Deducted from employee's salary.
• Key Employment Terms (KETs): Employers must provide written KETs to all employees within 14 days of employment start. Must include job title, salary, working hours, leave entitlements, and notice period.
• Employment records: Must maintain employee records for at least 2 years (current employees) and 2 years after departure (former employees).

For a detailed look at MOM regulations and how to stay compliant, consider using HR software with Singapore compliance features. See our Best HR Software for Singapore guide for recommendations.