Hiring a first employee is an exciting step, but the paperwork that follows is where many small businesses stumble. Preparing employment contracts for Singapore staff is not just good housekeeping. A clear, well-drafted contract sets expectations on day one and reduces the risk of disputes with the Ministry of Manpower (MOM) later. This guide explains the essential clauses to include and how to put them together.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
Whether you are a newly incorporated company or an established employer refreshing old templates, preparing employment contracts for Singapore staff involves more than copying a precedent from the internet. The Employment Act sets minimum standards, and your contract needs to sit comfortably alongside them.
Who this applies to
Every employer in Singapore who hires staff under a contract of service should put the terms in writing. This includes private limited companies, sole proprietorships, partnerships and branch offices of foreign companies. It applies to full-time, part-time and fixed-term employees, and to local and foreign hires alike.
- Directors who also work in the company as employees, where a service agreement is advisable.
- Foreign professionals hired on an Employment Pass or S Pass, where the contract should match the details declared to MOM.
- Work Permit holders, whose terms must also follow MOM’s conditions.
- Part-time staff, who are covered by the Part-Time Employment Regulations if they work fewer than 35 hours a week.
Independent contractors are different, but calling someone a contractor does not change the real nature of the relationship. If the person works under your control and on your schedule, the law may treat them as an employee.
Key rules and requirements in Singapore
The Employment Act covers most employees, including managers and executives since the 2019 amendments, though some groups such as public servants, domestic workers and seafarers are excluded. Beyond the Act, the Tripartite Guidelines on Fair Employment Practices and the Workplace Fairness Act shape how employers should recruit and treat staff.
Key Employment Terms (KETs)
Under the Employment Act, employers must issue written Key Employment Terms to employees covered by the Act within 14 days of the start of employment. The KETs include the following:
- Full name of the employer and the employee.
- Job title, main duties and responsibilities.
- Start date, and the duration if the contract is for a fixed term.
- Working arrangements, including daily working hours, rest days and place of work.
- Salary period, basic salary, fixed allowances and deductions, and any overtime payment period.
- Leave entitlements, medical benefits and other benefits.
- Probation period, if any, and the notice period for termination.
An employment contract can serve as the KETs document if it covers all of these items. Many employers prefer a full contract because it also allows them to add protective clauses.
Clauses beyond the statutory minimum
Good contracts usually go further. Common additions include confidentiality, intellectual property ownership, conflict of interest and outside work restrictions, the return of company property, and compliance with the Personal Data Protection Act (PDPA). Restraint of trade clauses such as non-compete and non-solicitation provisions are enforceable only if they protect a legitimate business interest and are reasonable in scope, duration and geography. Courts in Singapore look at these closely, so avoid blanket restrictions.
CPF and statutory contributions
Employers must pay CPF contributions for Singapore Citizens and Permanent Residents. The contract should state that the salary is subject to CPF contributions where applicable. Foreign employees on work passes are not subject to CPF, but the employer may need to pay the Skills Development Levy (SDL) and, for some pass types, the foreign worker levy.
Step-by-step process
- Confirm the employee’s status. Check whether the person is covered by the Employment Act, whether they are a citizen, PR or foreigner, and whether a work pass is required.
- Decide the commercial terms. Agree the job scope, salary, bonus structure, working hours, leave and probation before drafting. Changes after signing are much harder to manage.
- Draft the contract. Start with the KETs, then add protective clauses suited to the role. Use plain language so the employee can understand it.
- Align with the work pass application. For Employment Pass and S Pass holders, the salary and job title in the contract must match what you declare to MOM.
- Issue and sign. Give the employee time to read the contract, then have both parties sign and keep a copy in the personnel file.
- Update when terms change. If salary, duties or hours change, issue a written variation or an updated KETs notice.
Common mistakes to avoid
- Using a generic overseas template that refers to laws that do not apply in Singapore.
- Leaving out the notice period, which then defaults to what is customary or what the Employment Act provides.
- Writing a non-compete clause that is too wide to be enforced.
- Failing to issue KETs within 14 days of the start date.
- Stating a salary in the contract that differs from the figure submitted to MOM for a work pass.
- Describing annual leave or sick leave in a way that falls below the statutory minimum for covered employees.
- Forgetting to state the probation terms, including whether the probation can be extended.
Practical examples
Example 1: A new local hire at a small company
A newly incorporated trading company in Singapore hires an administrative executive on a monthly salary of SGD 3,200. The contract sets out the job title, a five-day work week, a three-month probation, 14 days of annual leave and one month’s notice. It also confirms that employer and employee CPF contributions apply. The employee signs on day one, which satisfies the KETs requirement.
Example 2: An Employment Pass holder
A technology firm hires a software engineer from overseas. The contract states the same monthly salary as the work pass application and sets out the job scope and the duration of the employment. It also includes confidentiality and IP assignment clauses. If the Employment Pass is not approved, the contract is conditional on the pass being granted, which protects the company.
Example 3: A role with a restraint clause
A sales manager has access to client lists and pricing. The employer adds a six-month non-solicitation clause limited to clients the manager dealt with directly. Because the clause is tied to a genuine business interest and is narrow, it is far more likely to be enforceable than a blanket two-year non-compete.
How a corporate secretary can help
A corporate secretary in Singapore is usually the first person a company turns to for governance and compliance matters. Where employment is concerned, the team at Raffles Corporate Services can help you:
- Prepare a contract template and service agreements for directors who are also employees.
- Coordinate filings with ACRA, such as changes in officers, alongside new appointments.
- Set up payroll, CPF submissions and IRAS filings so that the contract terms flow into the monthly payslips.
- Support accounting and tax needs that arise from new headcount.
This is general guidance and not a substitute for advice on your specific circumstances. Employers with unusual arrangements should seek tailored advice.
Frequently Asked Questions
Is a written employment contract compulsory in Singapore?
The Employment Act requires employers to provide written Key Employment Terms to covered employees. A full contract is not strictly required by law, but it is the most practical way to meet the KETs requirement and to protect both sides.
Can the employer change the contract after it has been signed?
Changes generally need the agreement of both parties. If an employer makes changes unilaterally, the employee may treat this as a breach. Any variation should be recorded in writing, and for covered employees, updated KETs should be issued.
How long can a probation period last?
There is no fixed statutory limit, but probation commonly runs from three to six months. The contract should state the length, whether it can be extended and the notice period that applies during probation.
Do the same rules apply to part-time employees?
Part-time employees are covered by the Employment Act and the Part-Time Employment Regulations. Their contracts should include hourly rates, working hours and pro-rated leave entitlements.
Should foreign employees have a different contract?
The core terms are the same, but the contract for a work pass holder should match what was declared to MOM and may include a clause making the employment conditional on pass approval.
Key takeaways
- Provide written Key Employment Terms within 14 days of the start of employment.
- Cover job scope, salary, hours, leave, probation and notice period clearly.
- Add protective clauses such as confidentiality and IP, and keep any restraint of trade clause reasonable.
- Make sure contract terms for foreign hires match the work pass application to MOM.
- Reflect CPF, SDL and other statutory obligations accurately.
- Review templates regularly as Singapore employment law develops.
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.