How to pay international contractors in Singapore [2025]

With many international companies leveraging skilled workers around the world, one country that's especially attractive to business owners is Singapore—known for its strong economy, high-tech infrastructure, and thriving freelancer scene. This bustling city-state is a hub for independent contractors in sectors such as information technology, finance, and creative services. 

If you're considering hiring contractors in Singapore, it's essential to understand the local laws on worker classification and payment. This article provides a step-by-step guide on paying international contractors in Singapore compliantly and efficiently.

Step #1: Classify your workers in Singapore

Before you can hire and pay a contractor in Singapore, you must accurately classify them. Misclassification of workers can have serious consequences. In Singapore, if a worker is incorrectly classified as an independent contractor, the company may be in breach of the Employment Act. This could lead to:

• Financial penalties, including paying CPF (Central Provident Fund) contributions, back wages, and entitlements such as public holidays and medical leave

• Fines, penalties, and surcharges on unpaid taxes and benefits

• Fines for unpaid social security contributions

• Imprisonment

To determine worker classification in Singapore, the courts assess a variety of factors, including the distinctions below:

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Step #2: Determine the best way to pay your contractors in Singapore

Once you've correctly classified your contractors, the next step is to determine how to pay them. The payment method you choose can have implications for your business and your contractors. Here are some common payment methods used in Singapore:

• Bank transfers: This is one of the most common methods of payment in Singapore. It's secure and efficient, with the funds transferred directly into the contractor's bank account.

• Wire transfers: For international contractors, wire transfers can be an effective way of making payments, though they may come with higher transfer fees.

• Payment apps: Some companies may opt to use international payment apps to facilitate transactions, particularly for small businesses or freelance arrangements.

• Global payroll services. Contractors generally aren't included in payroll. They invoice for their services, which goes through accounts payable at many companies. But with Rippling, you can pay Singaporean employees and contractors wherever they are in one system.

Each payment method has pros and cons, such as transaction fees, exchange rates, and processing times. Selecting the right method is crucial to ensure smooth and timely payment, which can significantly affect your relationship with your contractors.

Step #3: Use global payroll software to process payments for Singaporean contractors 

Using global payroll software like Rippling can greatly streamline your payment process in Singapore. Rippling offers an integrated system that manages HR, IT, and operations in one platform. This means you can automate payments, ensure compliance with local tax laws, and even manage benefits for contractors in multiple countries, including Singapore.

With Rippling, you can pay employees and contractors across the world in a single place. Here’s a preview of how Rippling’s global payroll system works:

Step #4: Ensure your Singaporean contractors have the right tax information 

As with all countries, Singapore has unique tax information that both businesses and contractors should be aware of. Here are some key points:

• Contractors in Singapore are considered self-employed and are responsible for their own taxes. They are required to declare their income and make necessary payments to the Inland Revenue Authority of Singapore (IRAS).

• They need to keep all records of income and expenses for at least five years.

• Unlike employees, contractors aren't subject to withholding tax. However, some exceptions might require the payer to withhold a percentage of the payment.

• Businesses don't need to contribute to the Central Provident Fund (CPF) for contractors. However, contractors may make voluntary contributions to their CPF accounts to secure their retirement, housing, and healthcare needs.

Remember, providing contractors with accurate and up-to-date tax information can help prevent future legal and financial complications.

Effortlessly manage contractors around the world

Expanding your global workforce is a breeze with Rippling. Use Rippling to pay international contractors in Singapore and around the world in one place.

Frequently asked questions about running payroll for contractors in Singapore

With Rippling, you can effortlessly manage contractors. And if you decide to transition them to a full-time role, we’ll take care of the paperwork, benefits administration, payroll, and more. Rippling handles it all, ensuring you stay compliant from onboarding to offboarding.