- Overview: Singapore
- Global HR Compliance
- Global PEO and Payroll
- Work Permit and Visa for Hiring Expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global PEO and Payroll in Singapore
9 Global Employment Challenges to Consider
If you’re thinking about expanding your operations to a global level, you’ll want to consider all the details that go into that decision. That includes everything from choosing the most cost-effective country and the right entity type to preparing for the challenges of doing business across borders. Choosing a location that works with your overall strategy and offers lower taxes could be one way to help improve profitability.
s you prepare to expand internationally, it’s crucial to understand how each factor impacts the overall success of your business. Here are some global expansion challenges.:
- Every country in the world has its own set of unique laws for businesses.
- The legislative and regulatory landscape is ever-evolving. Keeping track of changes is cumbersome
- Global HR Compliance challenges
- Need to understand and keep track of ever-evolving local labor laws and tax regulations across multiple jurisdictions
- Need to understand the local labor market
- Need to understand local business practices pertinent to employment
- Need to adhere to the company’s global employment policies
- Need to understand local competition and benchmark against common business practices
- Working with different languages, time zones, customs, and cultures
As your business expands globally, it is important to be agile to make the best decisions for your company. Markets and consumer demand are constantly changing, so it is vital to be as flexible as possible. The more agile you are, the easier it will be to make the right choices for your business.
Outsourcing can be an excellent way for organizations to save money and increase efficiency. By carefully selecting which global employment functions to outsource and working with a trusted partner, businesses can reap the benefits of outsourcing without putting themselves at risk. Outsourced standard functions include payroll, benefits, and absence management, but the decision of which functions to outsource should be made case-by-case. With careful planning and execution, outsourcing can help your organization run more smoothly and save money in the long run.
What is a Global PEO?
A global professional employer organization (PEO) is a company that provides payroll, human resources, and benefits administration services to businesses. Global PEOs typically enter into joint employment relationships with an employer, which allows them to operate within single or multiple jurisdictions or countries. A crucial part of PEO services is compliance with the laws and regulations governing payroll, benefits administration, and tax reporting in the countries where they do business. This includes paying taxes on employee wages following local labor laws and taxation regulations. By outsourcing these functions to a global PEO, businesses can focus on their core operations and leave the HR management to experts.
PEO vs. EOR: What’s the Difference Between a PEO & EOR?
Before hiring employees overseas, you should know a few key differences between a Professional Employer Organization (PEO) and an Employer of Record (EOR). While they may seem similar at first glance, they are legally distinct entities with different implications for your business. Understanding the distinction between the two is essential to ensure a smooth and successful international hiring process.
A professional employer organization (PEO) can be a helpful way to outsource some of the administrative tasks associated with running a business, such as a payroll and filing taxes. Co-employment is a term used to describe the relationship between a business and a PEO, where both entities jointly employ workers. This arrangement allows businesses to outsource their HR functions to a PEO. With co-employment, the company and the PEO share responsibility for employment-related obligations. However, it’s important to note that a PEO does not provide access to international hiring if you do not already have a local entity in place. A PEO can be a good option for companies that don’t have an HR department or want to outsource some of their HR functions.
An EOR is a company that takes on the legal risks of employing your workers, including finance, legal & compliance, and safety risks, saving you from any potential problems down the line. This means that all of the responsibilities that come with being an employer are shifted to them — from tax reporting to handling any injuries or issues on the job. You’ll have none of these hassles but will take responsibility for managing your employees’ tasks and performance. Additionally, because an Employer of Record talent engagement model can be used for employees in other countries without setting up a business entity, it is an ideal solution for businesses that want to maintain a presence in multiple countries.
Global PEO and EOR Comparison
|Employment Model||Co-employer||Sole Employer|
|Permanent Establishment Factor||Can only work with clients who have a registered in-country (state) entity||Facilitates foreign expansion without setting up an entity|
|Key Services||Global employment, payroll, benefits, immigration (visa, work permits), mobility||Global employment, payroll, benefits, immigration (visa, work permits), mobility|
|Responsibilities||Responsible for the entire array of HR functions||Responsible for a portion of HR functions|
|Tax Administration||Depending on local tax regulations may require taxes to be filed under the client’s taxpayer ID||Files taxes under own Taxpayer ID Number|
|Payroll Funding||Requires advanced payments from the client||Provides payroll funding|
|Local Entity Establishment||Required||Optional|
|Local Entity Ownership||Does not own the entities. Instead, partners with a local or global third-party provider. A PEO does not allow you to hire in countries where you do not have a local entity.||100 % owns legal entities in the country of service. Allows to hire a workforce in other countries without setting up a business entity|
|Liability||Shares responsibilities and liabilities||Assumes all responsibilities and liabilities. EOR hires employees in the new country under its local business entity and takes on all of the legal risks.|
|Legal Advice||Optional||100% compliance required|
|Global Labour & HR Compliance||Optional||100% compliance required|
|Insurance||May require the client to provide their own insurance.||Provide general liability (GL) and workers’ compensation (WC) insurance coverage.|
|Benefits||Provides higher quality employee benefits at competitive prices||Provides higher quality employee benefits at competitive prices|
|Employment Agreement||The client must draft and sign the employment agreement with an employee.||Drafts and signs the employment agreement directly.|
|Pricing Structure||– Fixed monthly fee per employee|
– Percentage of payroll plus applicable taxes
|– Fixed monthly fee per employee|
– Percentage of payroll plus applicable taxes
The Remote Work Revolution: How Global PEO Can Help You Adapt
As workforces continue to evolve, they demand that leaders like you shed the old work models of yesteryear and adapt to the new ones built in front of your eyes. Global PEOs are here to help you navigate this changing employment paradigm, but only if you are willing to have an open mind about where your business is going.
As we move into the latter half of 2022, leadership teams across the globe are still struggling to figure out the best way to manage their internationally distributed workforce. Global PEOs are uniquely positioned to help companies like yours deal with these significant changes, including the shift to remote work. Just a few years ago, the idea of an entirely remote workforce was unheard of, but today it seems like a permanent reality for many.
Why Use a Global PEO?
Global PEOs are an exciting new trend in the business world. They offer many benefits that can help companies save money, including the ability to bundle services from multiple providers, lower prices for employee benefits, coordinated global administration payroll and benefits administration, and streamlined global employment compliance.
The most significant benefit of Global Professional Employment Organizations is the ability to outsource the time-consuming tasks associated with running a company while focusing on your organization’s core business. PEOs also work well for companies with multiple locations or remote workers because they provide uniformity regarding worker experience. They can integrate any new hires into the overall culture of your organization.
10 Benefits Global PEO Can Offer Offers to Help Companies Go Global Cost-effectively
- A Professional Employer Organization (PEO) is a third-party staffing firm that provides its clients with administrative, HR, and insurance services. It takes over all the time-consuming, tedious, and risky tasks your HR, Finance, and Operations Team would have to do, allowing them to focus on what they do best.
- By paying a flat rate to a global PEO (Professional Employer Organization) partner like Acumen International, you hand off almost all the heavy burdens of HR management so that you can focus on what matters.
- A global PEO handles payroll and benefits administration for your employees in Singapore. It also takes care of tax withholding and filing, workers’ compensation insurance, unemployment insurance administration, regulatory compliance, employee handbooks, HR compliance, training and development programs, employee relations issues management, and more.
- PEOs can provide a range of benefits to employees that other companies may not be able to offer. A PEO will also help with keeping track of your employee’s benefits and insurance across multiple jurisdictions, as well as making sure they stay up-to-date while they’re working for you. You might be surprised at how much time it takes to manage health insurance or pension plans, but PEOs deal with this daily. They make it their business to know what the most up-to-date employee benefits there are,
- Reduced liability. Often, employers are unaware of potential liability issues regarding their employee’s insurance and benefits until it is too late. Using a global PEO to handle these matters instead of handling them on your behalf across foreign jurisdictions.
- A global PEO can help your company save on internal costs by acting as the single contact for insurance and benefits coverage. Global PEOs can also help improve the quality of your benefits coverage by providing access to a broader range of options.
- Your business faces many potential threats, from compliance issues to insurance costs. A global PEO can help you mitigate these risks by providing expert guidance and support.
- A global PEO can help with immigration challenges and other concerns that may impact your business.
- By partnering with a global PEO, clients can often secure more favorable terms on employee benefit plans.
- Streamlined payroll and tax filings: The global PEO processes payroll and does all the necessary tax filings for the company, significantly reducing administrative overhead for employers.
Global PEO and Payroll in Singapore
Global Payroll Management & Compliance Considerations
Managing employees in different countries can be a complex and challenging task. Employees may need to be registered and taxed differently in each country, and there may be other laws that need to be followed. This can make it very hard to keep track of everything and ensure everything is done correctly.
When it comes to payroll, there are many different regulations that you must follow to avoid penalties or litigation. Each country has its laws and regulations, but some standards apply internationally. You must know and adhere to tax deadlines, withholding and reporting laws, and regulations requiring employee tax slip signatures. If you fail to adhere to these payroll compliance rules, you could face severe penalties that could negatively impact your business.
Global payroll management is a complex process that requires careful consideration of various factors. Payroll specialists must consider local regulations and taxation requirements, which can be time-consuming and difficult to navigate. However, by addressing some key challenges and partnering with a Global PEO, organizations can ensure compliant, accurate, and timely payments.
|Employment risks mitigation||50%||50%|
|Tax compliance & payroll processing|
|Coverage||client’s home country only||client’s home country only|
|Employment risks mitigation|
|Tax compliance & payroll processing|
|Incorporation costs||own foreign entity required|
|Our Global PEO&Payroll||Client|
|Employment risks mitigation|
|Tax compliance & payroll processing|
|Incorporation costs||no need for own|
|Coverage||190 countries||190 countries|
Global Payroll Calculator
Global Payroll Calculator is the ideal international employment cost prediction tool to help you estimate the costs of employing staff in other countries, including employer and employee taxes. It allows you to stay on budget and avoid surprises when expanding Internationally.
Global Payroll Calculator enables you to explore and test new markets, make informed decisions about where to base your business, plan foreign employment budgets, help minimize payroll tax and employee wage costs, and decide where to establish your business most cost-effectively.
You can get instant estimates of the total employment cost for a local worker or ex-pat in any of your target countries, broken down by all in-country employee and employer taxes.
Global Employment Cost Estimation in a Matter of Minutes
With Global Payroll Calculator, you have the power to estimate the labor costs of your organization in a matter of minutes — without leaving your desk. Compare the time it takes to produce an employment cost estimation with manual methods or the number of hours spent on finding a local service provider — and you’ll see that this is a tool you couldn’t do without.
Our unique global employment cost estimate tool helps businesses better anticipate the costs of expansion internationally. It also helps reduce the risk of investing in new markets and ultimately enhances your company’s international growth strategy.
There are a lot of tools for managing labor data, but most are incomplete or complex. You need something simple and easy to use to get a complete picture of labor costs and taxes that can make strategic decisions about hiring across 190 countries. Global Payroll Calculator gives you a tool to make all your estimates and forecasts with only a few clicks.
PEO (Professional Employer Organization) & Payroll in Singapore
As your organization looks to expand globally, many potential benefits will be gained. However, before these benefits can be realized, many companies face various challenges. By being aware of these potential hurdles, your company can be better prepared to overcome them and reap the rewards of global expansion.
Acumen International is a leading provider of global EOR and PEO services, offering secure and efficient solutions for businesses that need to manage international payroll, HR & benefits administration across 190 countries. Our full-service management solutions are tailored to each client’s needs and can include everything from legal talent employment to benefits management and compliance to payroll and taxation.
- Processing Immigration requirements
- Visa applications & extensions
- Work permit sponsorships
- Streamline onboarding, benefits, payroll, PTO
- Local labor law compliance in Singapore
- Audit-proof compliance requirements
- Employee benefits management
- Handling employment contracts, terminations, and compensation
- Processing medical insurances and benefits
- Payroll, including year-end tax statements
- Relocation services & housing
- Special needs or requirements
- Multi-country employment without limitations
- Handling contract worker and ex-pat workforce management
- Compliant employment or termination within 72 hours.
Navigating the Singaporean legal system and adhering to regulations governing employment and taxation in Singapore can be challenging for businesses, especially if you are not a native Singaporean speaker. Partnering with Acumen International as a global Professional Employer Organization (PEO) provides you with the local knowledge and support you need to conduct business in Singapore without concern for legal and compliance risks.
Whether you represent international client companies or are taking your business operations abroad, Acumen International’s Global PEO and payroll service allow you to hire and payroll local and ex-pat employees in Singapore. With Acumen in your corner, you can quickly and efficiently onboard and compensate your employees without the risk of legal repercussions.
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Global Payroll and Taxation in Singapore
Personal Income Tax (PIT)
Income is taxable when it accrues in or is derived from Singapore, whether or not the individual is resident in Singapore. Income derived from sources outside Singapore is only taxable if it is received in Singapore by a resident individual through a partnership.
A resident individual’s taxable income (after the set-off of personal allowances) is subject to income tax at progressive rates.
Non-resident individuals are taxed at a flat rate. A non-resident director’s remuneration does not qualify for the reduced rate, and withholding tax must be deducted from remuneration paid to a non-resident director.
Social security contributions. Central Provident Fund (CPF). The CPF is Singapore’s national pension scheme. Contributions are payable by Singapore citizens and permanent residents only.
Payroll Cycle in Singapore
For employees, the following requirements apply:
- Employers must fix salary periods not exceeding one month; generally speaking, the default is one month.
- Salary must be paid within seven days of the last day of the salary period concerning which the salary is payable. Additional payments for overtime work must be paid within 14 days of the last day of the salary period.
- Where salary is paid other than into a bank account, salary payment must be made on a working day and during working hours at the place of work or any other place agreed upon between the employer and employee.
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Disclaimer: Any of the above information is subject to changes imposed by Singaporean laws. To get the latest updates on taxation in Singapore and in 190 countries worldwide, contact Acumen’s team of global employment experts.