Singapore Employment Act: An Overview for Businesses [2026]

If you're setting up a business in Singapore, the Employment Act is one of the first things you need to understand: it sets the floor for how you structure contracts, leave, pay, and termination.

Getting the details right also helps you build compensation and benefits that actually attract talent, rather than just meeting the legal minimum.

This guide walks through who the Act covers, what it entitles employees to, and where the rules changed most recently, including two updates most existing guides on this topic still miss: the July 2026 retirement age increase and the expanded paternity and shared parental leave rules.

What Is the Singapore Employment Act?

The Employment Act is Singapore's main labour law. It sets out the basic terms and conditions of employment for covered employees, things like leave entitlements, salary payment timing, and termination rules, and it applies alongside whatever an employer and employee separately agree to in their own contract.

Foreign employees holding a work pass are also covered by the Employment of Foreign Manpower Act, which sets out an employer's specific obligations for hiring foreigners, separate from the Employment Act itself.

Who Is Covered Under the Employment Act?

An employment contract governs the relationship between an employer and employee, and both parties are free to negotiate most terms, as long as those terms don't fall below what the Employment Act guarantees.

You're covered by the Act if you work under a contract of service, whether full-time, part-time, temporary, or fixed-term, and whether you're paid hourly, daily, monthly, or by the piece. This applies to local and foreign employees alike.

Only three groups fall outside the Employment Act altogether:

• Seafarers
• Domestic workers (household helpers, maids)
• Statutory board employees and civil servants, who are covered by separate government employment terms

If you're not covered by the Act at all (one of the three groups above), your terms and conditions come entirely from your employment contract.

If you work less than 35 hours a week, you are considered a part-time employee and are covered by the separate Employment of Part-Time Employees Regulations, which adapt Employment Act entitlements (leave, public holidays, etc.) proportionally to your working hours.

Who Is Covered Under Part IV of the Employment Act?

Part IV covers rest days, hours of work, overtime pay, and public holiday pay. It only applies to:

• A workman (someone doing manual labour, including cleaners, construction workers, machine operators, and drivers) earning a monthly basic salary of SGD 4,500 or less.
• A non-workman employee who is covered by the Employment Act and earns a monthly basic salary of SGD 2,600 or less.

Basic salary here excludes overtime, bonuses, annual wage supplements, productivity incentive payments, and allowances.

This is not the same threshold as annual leave or sick leave. A common mistake is assuming the SGD 2,600 (or SGD 4,500) threshold applies across the board. It doesn't. Annual leave and sick leave are separate entitlements under the Act and apply to any covered employee, regardless of salary, once they've completed 3 months of service. Only rest days, working hours, overtime pay, and public holiday pay are restricted to employees under the Part IV thresholds.

Managers and executives, and professionals with tertiary education and specialised skills employed on similar terms (such as lawyers, accountants, and doctors), are excluded from Part IV specifically, not from the Act as a whole.

Employment Contract and Key Employment Terms (KETs)

An employment contract, sometimes called an employment agreement, appointment letter, or offer letter, is a written agreement specifying the terms and conditions of employment. It's strongly advisable to have one in writing, even though it's not strictly mandatory for every employee.

Key Employment Terms (KETs): since 1 April 2016, employers must issue written KETs to any employee covered by the Employment Act who is employed for a continuous period of 14 days or more. This can be a full contract, an offer letter, or even an employee handbook, as long as it covers the required items, including:

• Employer and employee full names, job title, and main duties.
• Start date and duration of employment (if fixed-term).
• Working hours, working days per week, and rest day.
• Salary period, basic salary (and basic rate of pay for hourly, daily, or piece-rated workers).
• Fixed allowances and deductions.
• Overtime payment period and rate (not required for managers and executives, who aren't entitled to overtime pay).
• Leave types (annual, sick, hospitalisation, maternity, childcare).
• Probation period and notice period.

Failing to honour these terms, by either party, is treated as a breach of contract. Senior management employees typically have more room to negotiate their specific terms, but the KETs themselves still need to be issued.

To make your offer competitive, make sure your contract terms are never less favourable than what the Employment Act guarantees. The Act sets a floor, not a ceiling.

Salary, Bonuses, and Benefits

Employee benefits in Singapore typically include leave (sick, annual, maternity, paternity, and childcare), bonuses, and incentives, on top of base salary. Common additional benefits include relocation assistance, healthcare, housing allowances, and transport reimbursements.

Hours of Work and Overtime

These provisions only apply to Part IV-covered employees (workmen earning SGD 4,500 or less, or non-workmen earning SGD 2,600 or less):

• No more than 44 hours of work per week.
• No more than 6 consecutive hours of work without a break.
• 1 rest day per week.

For employees above these thresholds, hours of work are freely negotiated between employer and employee. In practice, a Monday-to-Friday, 9am-6pm schedule is common, with some SMEs expecting 9-10 hour weekdays plus a half-day Saturday, though this is convention rather than a legal requirement.

Public Holidays

Singapore has 11 paid public holidays a year. For Part IV-covered employees (the same SGD 4,500 workman / SGD 2,600 non-workman thresholds above):

• You're entitled to a paid holiday on each public holiday.
• If a public holiday falls on a rest day or Sunday, the following Monday becomes the paid holiday instead.
• If a public holiday falls on a day you're not contractually required to work, you get an extra day's pay or a day off in lieu instead.

For employees above these thresholds, public holiday pay isn't legally required, though most employers extend the same treatment as a matter of common practice.

Annual Leave

Unlike hours of work and public holidays, annual leave is not restricted by salary. You're entitled to paid annual leave if you're covered by the Employment Act and have worked for your employer for at least 3 months, regardless of how much you earn.

Your entitlement scales with tenure:

These are statutory minimums. In practice, most Singapore employers offer around 14 days a year from the start, rather than making employees wait 8 years to reach that figure.

Sick Leave

Sick leave is also not gated by salary. You're entitled to paid outpatient sick leave and paid hospitalisation leave if you're covered by the Employment Act, have served at least 3 months, and notify your employer within 48 hours of your absence.

You need a certificate from a doctor registered under the Medical Registration Act or Dental Registration Act to qualify for paid outpatient sick leave. Paid hospitalisation leave covers being warded, undergoing day surgery, being quarantined under law, or needing rest or further treatment after a hospital discharge. It's not simply an extension of outpatient leave, and cosmetic procedures don't qualify for either.

Health Insurance

There's no statutory requirement to provide health insurance. In practice, larger companies commonly offer private medical insurance as a benefit, though smaller companies often don't.

Probation Period

There's no statutory requirement around probation length. Common practice is 3 to 6 months, usually with a shorter notice period during probation than after confirmation.

Maternity, Paternity, and Shared Parental Leave

Maternity leave: eligible working mothers get either 16 or 12 weeks of maternity leave, depending on the child's citizenship and other criteria:

• 16 weeks (Government-Paid Maternity Leave): available if the child is a Singapore citizen and the mother has served her employer for at least 3 continuous months before the birth. The employer pays the first 8 weeks at the mother's gross rate of pay for the first and second child, then can claim reimbursement from the government for the remaining weeks (capped at SGD 10,000 per 4 weeks, up to SGD 20,000 total for the first two children, or up to SGD 40,000 total from the third child onward, with all 16 weeks reimbursable in that case).
• 12 weeks: applies where the child isn't a Singapore citizen. This portion is funded by the employer, not the government.

Paternity leave: this is one of the biggest recent changes and it's easy to miss if you're working from an older guide. For children born, due, or formally adopted on or after 1 April 2025, eligible working fathers get 4 weeks of Government-Paid Paternity Leave (up from 2 weeks previously). Eligibility requires the child to be a Singapore citizen, the father to have been married to the mother between conception and birth (or within 12 months after), and at least 3 months of service with the employer. The employer pays during leave and can claim reimbursement, capped at SGD 2,500 per week or SGD 10,000 total. Since 1 April 2025, dismissing an employee while on paternity leave is also an offence, and fathers must give at least 4 weeks' notice before taking it.

Shared Parental Leave (SPL): parents can share an additional pool of government-paid leave between them, to be taken within 12 months of the child's birth, either continuously or split flexibly if the employer agrees. This sits on top of, not instead of, the maternity and paternity leave above.

Childcare leave: 6 days per year if your child is a Singapore citizen, under 7 years old, and you've worked for at least 3 months. If your child isn't a Singapore citizen, you're entitled to 2 days per year under the same service and age conditions.

Termination of Employment

Either party can end the contract by giving written notice or paying salary in lieu of notice.

If the contract specifies a notice period, that period applies. Common practice is around 2 weeks during probation and 1 month after confirmation.

If the contract doesn't specify one, the Employment Act supplies a default schedule based on length of service:

This default only kicks in when the contract is silent on notice. Most written contracts specify their own period, which then takes precedence.

Retrenchment

Retrenchment benefit is not a statutory requirement under the Employment Act. There's no law forcing an employer to pay a specific retrenchment amount. That said, MOM's Tripartite guidelines strongly recommend paying retrenchment benefits to employees with 2 or more years of service, and most established employers follow this as standard practice. Employees with less than 2 years of service are sometimes still given an ex-gratia payment out of goodwill, though this isn't required either.

What is required: you must pay all outstanding salary and benefits on the employee's last working day, and honour whatever notice period applies (contractual or the statutory default above).

Mandatory retrenchment notification: if your company has 10 or more employees, you must notify MOM within 5 working days of informing an affected employee of retrenchment. This applies to permanent staff and contract employees with contracts of at least 6 months. This requirement exists independently of whether you pay retrenchment benefits.

Retirement and Re-Employment Age

This changed very recently and most existing guides on this topic haven't caught up: as of 1 July 2026, the statutory retirement age in Singapore increased from 63 to 64, and the re-employment age increased from 68 to 69.

In practice, this means:

• You cannot dismiss an employee purely on the basis of age before they turn 64.
• Once an eligible employee turns 64, you must offer them re-employment (on updated but reasonable terms) up to age 69, rather than simply letting the employment end.
• You should extend the written re-employment offer at least 3 months before the employee reaches the new retirement age, so update your internal HR calendar and templates now if you haven't already.

Central Provident Fund (CPF) Contribution

CPF is mandatory for Singapore Citizens and Permanent Residents, though PRs contribute at reduced, graduated rates for their first two years before moving to full rates (matching citizens) from the third year onward. Foreign employees on work passes don't contribute, though they remain liable for Singapore income tax on their employment income. Contributions are split between employer and employee, and the employer's share depends on the employee's age.

Current employer contribution rates (from 1 January 2026, for monthly wages above SGD 750):

Different rates apply to Permanent Residents in their first and second year of PR status. Check the CPF Board's tables if this applies to your team.

Education and Training

There's no statutory requirement to offer training or skills-upgrading benefits. Some companies choose to offer reimbursements or allowances for this anyway, as a retention and development tool, but it's entirely discretionary.

Final Thoughts

The Employment Act sets the floor, not the whole picture. Knowing exactly where that floor sits, and where it recently moved, like the July 2026 retirement age change or the expanded paternity leave, is what keeps your contracts compliant and your benefits genuinely competitive rather than accidentally behind.

Get the basics right first: who's covered, what's salary-gated and what isn't, and which entitlements just changed. Everything else in your compensation package is a business decision on top of that foundation.