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Employ Candidates Compliantly in Singapore

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  1. Overview: Singapore
  2. Global HR Compliance
  3. Global PEO and Payroll
  4. Work Permit and Visa for Hiring Expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
Other counrtries

Are you looking to engage and pay offshore IT developers in Singapore?

Find out how you can make an informed decision on whether you should engage and pay employees or independent contractors using our free ‘Employee vs. Independent Contractor’ Checklist.

Designed to be used by companies engaging the remote workforce in Singapore, the checklist is the best way to define why and in what cases companies should onboard new hires or convert existing contractors/freelancers into employees without missing any crucial aspects.


What Our Clients Are Saying?

I’d like to share my experience dealing with Acumen International company.

Speed & responsiveness: Very prompt in response to my first inquiry about converting contractors into employees to follow-up questions.

Completeness of information: I like how detailed the estimates and the transparency make us feel more confident in knowing where the money goes to.

Overall experience: I am pleased and impressed with how fast they respond to my inquiries. We can trust the company to employ the contractors we want to keep.

Quah Shen Dee,
People Success Officer

I have always found Acumen International very supportive, professional, and helpful. They pay salary on time and are always ready to sort out any issues that arise.

I must admit I truly enjoy my time as an Acumen International employee and feel like they care about me as an individual. I have a dedicated manager that provides me with detailed explanations when it’s needed. Payments are always prompt, and the entire team does its best to respond to any of my questions.

I highly recommend Acumen International to anyone that requires their services.

Andrew Yanchurevich,

Avoid Worker Misclassification Risk in Singapore

It is not uncommon for an employer to misclassify an employee as an independent contractor. An employer may misclassify an employee to save on taxes, overtime, and worker compensation. Working with Independent Contractors is also an invitation to a potential lawsuit. The employer can be liable if the tax authorities come after him for employee misclassification.

The tax authorities have been cracking down on independent contractors who are actually employees in disguise. This happens when a company misclassifies an employee as an independent contractor. Workers misclassified as independent contractors are not provided with certain benefits that are available to employees. These include unemployment taxes and workers’ compensation insurance.

The tax benefits of hiring independent contractors are only available for employers if the contractor is treated like one. That means they should be able to negotiate with you over their hours, rates, and projects; they should have ultimate control over how and where their work is done, and they should have the freedom to offer their services to multiple employers at once and incur entrepreneurial risk. If your employee seems more like an independent contractor, you should ask yourself why are you treating them like an employee and what are your potential misclassification risks.

If it turns out that your workers were misclassified, as an employer, you can be held responsible for back taxes owed on their behalf.

The tax authorities have developed multi-faceted tests to determine whether someone is an employee or an independent contractor.

How Tax Authorities Can Distinguish Independent Contractors from Employees

If you hire independent contractors regularly, it’s essential to understand how they may be misclassified and what steps you can take to avoid potentially costly litigation. If you’ve already employed independent contractors in the past, you might consider reevaluating how correctly they were classified and reviewing contracts or business relationships with them.

You should consider three main factors when determining whether your workers are appropriately classified as independent contractors: behavioral control, financial control, and the parties’ relationship. Behavioral control includes detailed instructions on how the work is to be performed. Financial control is demonstrated by withholding taxes and benefits from the worker or not reimbursing expenses incurred while working. The parties’ relationship is demonstrated by having a written contract specifying no employer-employee relationship. When in doubt, follow the checklist below.

  1. How the parties treat each other.
  2. The amount of control exercised by the principal over the details of how the work is done.
  3. Whether payments are made by time or by results.
  4. Whether the work is part of the regular business of the principal.
  5. Whether the contract was entered into as a means of carrying on business or for any other commercial purpose.
  6. Whether the work requires special skills and initiative and whether such skill is peculiar to any trade or business.
  7. The length of time for services to be provided, and more.
  8. Whether the worker is taking on financial risk.
  9. Whether the worker is providing their own equipment.
  10. Whether the worker is in receipt of employment benefits.
  11. Whether the worker can profit from their work. 
  12. Whether the worker has the right to terminate the contract.
  13. Whether the work performed requires special skills and initiative.
  14. The permanence or exclusivity of the relationship with the employer company.

The Case of an IT Freelancer You Most Certainly Want to Avoid in Singapore

Here is the litigation you would want to avoid… One American company worked with a Slovakian IT freelancer for approximately three years. The American HR director decided to contact Acumen International to employ this freelancer so that they would be in compliance with labor laws and avoid future misclassification issues.

The finance department of this US company did not approve of our offer to employ the Slovakian freelancer as it seemed higher than what they were currently paying the freelancer. An employee misclassification case did not seem imminent, so they decided not to act.

Half a year later, the company contacted us to employ a Slovakian freelancer. Our offer got approved, but the freelancer refused to sign our employment agreement. In this half-year, the relationship between the freelancer and the US company went sour. The freelancer decided to go to the labor authorities instead. We never heard the ultimate verdict, but from communication with the HR director, we understood that they risked owing social security taxes, vacation, severance payment, and additional fines totaling about seventy thousand euros.

5 Benefits of Hiring & Payrolling Employees Over Independent Contractors in Singapore

1. Employment Compliance & Cost Control in Singapore

Acumen PEO can help you streamline global employment and eliminate all legal and compliance complexities associated with expanding into Singapore. Engaging and paying foreign talent full-time via a global PEO solution is about 30% cheaper than engaging in-house.

PEO engagement can help you save up to 50% of the costs associated with working through your entity. PEOs can offer a wide range of services and benefits that can help you streamline your business processes and reduce expenses.

2. Benefits Administration in Singapore

Employee loyalty can be increased by up to 47% when using full-time employment to retain talented and successful employees. Freelancers who enjoy benefits such as paid leave or a company car often work harder than those without these perks. This is because they are motivated to do their best and feel appreciated. When offered a permanent position, they will bring their considerable skills and experience to your business, making it even more successful.

3. Expert Guidance on Employment Law in Singapore

If you’re looking for a quick and easy solution to help with your tax compliance challenges, a Global Employer of Record (EOR) or PEO arrangement could be a great way to go. With the help of your global PEO partner, you can quickly test out the Singapore market and then cancel if you decide it is not suitable for you. But make sure to understand all of your UK corporate income tax requirements before signing on the dotted line!

The benefits of using an official foreign employment service are clear. PEO partners with you to take care of all Singapore’s HR, risk, and compliance aspects. This way, you can focus on growing your business instead of navigating these complex waters alone. You can be sure that your operation is progressing smoothly by eliminating the risk of legal, financial, and business issues with a Global PEO partner. With just a few employees, starting in the United Kingdom is easy – so go ahead and explore this fantastic country!

4. Employee Misclassification Risk Prevention in Singapore

The Employee Misclassification risk becomes even more significant when a business owner hires independent contractors — who are classified as self-employed rather than traditional full-time employees. Businesses may hire independent contractors to save money on expenses typically covered for full-time employees: benefits, vacation time, and paid sick days. While this may save you money upfront, it also increases indirect costs down the line: you’ll have to do more paperwork at tax time and pay steep penalties if the government authorities audit you and discover a misclassification case in Singapore. In addition to severe financial repercussions, having an untrained staff of independent contractors means less productivity due to a lack of training and supervision.

Global companies are increasingly at risk of employee misclassification and the possibility of legal action against their organizations. A PEO can help you to enhance your HR compliance and avoid these risks by providing on-site customer support and in-depth expertise in local labor law and tax and compliance regulations. Acumen IInternational’s in-country managers will speak your language, making it much easier to employ legally, onboard, and payroll your globally distributed teams of professionals; you will save time and money with less need for recruitment or training.

5. Global Mobility Services for International IT Professionals in Singapore

At Acumen International, we offer expert guidance on all aspects of global mobility and immigration support. Our team of experts can help make your IT professional’s relocation as smooth and easy as possible. We will support you through everything, from knowing the tax and social security obligations in Singapore and their home country to obtaining business visas and work permits. And we will even help you set up a payroll administration so that everything is handled tax and social security compliantly in Singapore.

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the ‘Employee vs Independent Contractor’ Checklist

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