Bringing on your first employee in Singapore feels like progress until you realize you're now responsible for CPF contributions, personal income tax (PIT) withholding, and probation-period compliance. Get any of these wrong and you'll face penalties from the Central Provident Fund (CPF) Board or the Inland Revenue Authority of Singapore (IRAS), plus a frustrated employee and a payroll that won't reconcile. This guide walks through the exact steps: what you register for, how withholding tables work, when probation rules apply, and which software automates the math so you don't have to recalculate CPF contribution caps and tax brackets each month. CPF registration and contribution tiers CPF is not optional and it is not a tax. It's a mandatory savings account split three ways: ordinary account (retirement), special account (retirement + medical), and medisave (healthcare). Your employee contributes a percentage, you contribute a matching percentage, and both are capped by age and income level. Before payroll starts, register your company with the CPF Board. You'll need: UEN (Unique Entity Number) Business registration proof Director and officer details Nominated payroll account CPF contribution rates are not flat. As of 2025, for an employee aged 30-55 earning above $750/month: Employee contribution: 8% of monthly wages (capped at $1,200/month contribution, not income) Employer contribution: 17% of monthly wages (capped at $2,550/month contribution) Additional employer contribution: 0.5% of wages for employees aged 55-60 (phasing to 0.75% for older workers) Wages include base salary and fixed allowances, but exclude bonuses, commission, and overtime paid at rates above 1.5x regular wage. An employee earning SGD 5,000 base generates SGD 400 employee contribution (8% × $5,000) and SGD 850 employer contribution (17% × $5,000), totaling SGD 1,250 in CPF outflow monthly. Critical point: The contribution cap is on the amount deducted, not the wage. This means a SGD 10,000 salary does not trigger SGD 1,700 in employer CPF; the cap limits it to SGD 2,550. Your payroll software must apply the cap correctly or you'll either under-remit (IRAS will audit) or over-deduct (your employee will spot it immediately). Tax withholding tables and resident status Singapore personal income tax is progressive and only applied to residents and deemed residents. A resident is someone physically present for 183 days or more in the calendar year, or someone with employment anchored in Singapore for the year. If your first hire is a Singapore resident, you must withhold tax at source each month. IRAS publishes withholding tax tables that vary by monthly salary band. For 2025, a resident earning SGD 5,000 monthly has roughly SGD 280–320 withheld, depending on whether they claim reliefs and deductions. Non-residents face a flat 15% tax on employment income, which simplifies withholding but is rarely the case for a full-time first hire. Tourist visa and short-contract workers are typically non-resident; permanent staff and signed appointees are resident. You should: Confirm resident status with your employee (ask for proof of entry or an existing tax filing) Apply the correct withholding table from IRAS (updated annually) Remit withheld tax to IRAS by the 7th of the following month File a statement of employee tax (Form ET) by 28 February each year Many payroll errors stem from using last year's withholding table or forgetting to deduct at all. Spreadsheet-driven payroll makes this easy to miss; HR software with built-in Singapore tax rules applies the correct table each pay period and flags manual adjustments. Probation, minimum wage, and termination rules Singapore does not have a statutory minimum wage or a defined probation period length. Instead, the Employment Act allows for a probation period agreement in the contract, typically 1–3 months. During probation, both parties can end the contract without notice or penalty. After probation, either party must give notice (typically 1–4 weeks, depending on contract terms). Failure to define probation in writing risks disputes if you need to terminate quickly. Your employment contract must specify: Probation duration (e.g., 3 months from start date) End date of probation or trigger for confirmation Notice period post-probation Salary and payment method CPF contribution commitment (you cannot opt out) Termination payment terms (salary in lieu, unused leave payout) If you terminate during probation without cause or false pretense, you still owe salary to date and any accrued annual leave (Singapore mandates minimum 7 days annually, prorated). If terminated for cause (misconduct, breach), you owe only to the date of termination. Either way, CPF contributions up to the last day of employment are due to the CPF Board. First payroll checklist: registration to settlement Week 1: CPF and tax setup Register company with CPF Board (if not already done). Expect 3–5 business days. Confirm employee reside