The benefits of hiring independent contractors in Singapore

Singapore is a thriving hub for businesses, with a strong economy and a skilled workforce. As a startup or growing company, you may be considering hiring remote workers in Singapore to tap into the talent pool and expand your reach. One of the most efficient ways to do so is by hiring independent contractors.

When you’re hiring contractors, you’ll have to make sure you follow employment laws and tax legislation in Singapore and pay contractors quickly and compliantly. You must also classify your workers correctly, as misclassification can lead to penalties or legal repercussions.

This guide explores the key considerations for hiring and paying independent contractors in Singapore, and how using Remote Contractor Management can streamline the process.

Why hire independent contractors?

Hiring independent contractors in Singapore offers several advantages for startups and growing companies. As they work for themselves, contractors are responsible for their own taxes, insurance, and benefits, reducing the administrative burden for employers.

This also allows for greater flexibility, as contractors can be engaged on a project basis, without the commitment and costs associated with hiring full-time employees. Additionally, contractors often have specialised skills and experience, allowing businesses to access elite talent quickly and efficiently. This also means that you don’t have to spend extensive resources on training or onboarding them.

Because Singapore has a large population of skilled workers and a culture that values entrepreneurship, companies can easily find top talent in Singapore to suit a variety of requirements.

Key considerations before you hire independent contractors

Before you hire international contractors, you’ll have to make sure you have systems in place to hire, manage, and pay contractors quickly and compliantly.  Here are some other points to think about:

How to classify independent contractors

As mentioned, it’s essential to classify your independent contractors correctly, otherwise you risk facing serious consequences such as penalties, fines, or legal issues.

In Singapore, as in most countries, contractors are self-employed individuals who are responsible for their own taxes and benefits.  Employees, however, are hired by a company, are protected under employment laws in Singapore, and are entitled to certain benefits.

Some companies misclassify employees as contractors to avoid paying taxes or offering benefits. Even if unintentionally done, misclassification is still considered a serious offence. The employer could end up paying heavy penalties or face legal disputes.

To determine the correct classification, you have to consider:

• Whether you’re hiring them for a short-term project or regular long-term work
• How much control you have over the worker’s schedule and working hours
• Whether you want to offer them benefits such as holiday pay, overtime pay and sick leaves
• Whether you’re providing office equipment and material 

The rules around misclassification can be complicated, and it can often be challenging to classify workers correctly. Check out Remote’s Employee Misclassification Calculator to find your risk level and what you can do to remedy it.

Alternatively, you can sign up for Remote’s Contractor Management service. Our team of employment experts has a strong grasp of labor laws in Singapore and can classify your workers correctly and minimise misclassification risks.

Tax and compliance requirements

Employers don’t have to withhold taxes for employees, but they have to pay into the Central Provident Fund (CPF) fund. In contrast, independent contractors are responsible for filing their own taxes.

If you’re a US-based company, the Internal Revenue Service (IRS) will require you to fill out certain forms while hiring international contractors. Tax compliance for US companies can become simple if you partner with Remote.

Payment options

There are various payment options available to pay independent contractors in Singapore, such as bank wire transfer, check, credit card, Wise, MoneyGram, and PayPal.

Some of these payment methods have high transfer fees or exchange rates. Bank wire transfers can be expensive, and credit card payments may have processing fees.

To save time and money when you manage contractor payments, check out our contractor management platform. From automatic payments and easy invoice approvals to quick payments in the local currency, Remote helps you pay your contractors efficiently and compliantly.

The best way to hire independent contractors

Hiring independent contractors in Singapore can provide startups and growing companies access to elite talent. It’s also a flexible and cost-effective solution for companies that are looking for specialist skills or help with a short-term project.

However, it’s crucial to have a solid understanding of local labor laws and tax regulations to avoid any potential issues. You also have to make sure that you avoid misclassifying your workers. Working with Remote is the best way to minimise risks while hiring contractors abroad.

Our global contractor management platform is designed to make it easy for you to hire, manage, and pay contractors with a few clicks in Singapore and beyond.

By utilising this powerful tool, ambitious businesses can leverage the benefits of hiring independent contractors and drive global expansion.

Ready to hire contractors in Singapore with Remote? Sign up and grow your business today!