How to Prepare a Singapore Employment Contract: Probation, Hours, Leave and Termination

Classify the person first; only then does the contract have the right starting point

For a foreign founder making a first direct hire in Singapore, the safest sequence is not to begin by cutting down an English template. First answer two questions: is this a genuine employer-employee relationship? Which terms for this employee are directly regulated by the Employment Act and its Part IV, and which need to be completed through the contract and company policies? Only once those answers are clear will probation, rostering, leave and exit terms fit together.

MOM defines a contract of service as a relationship between an employer and an employee; a contract for service is an arrangement between a client and an independent contractor. There is no decisive test based only on the contract's name. The facts must be considered together, including control, who supplies tools and premises, who bears business risk, and whether the work forms part of the company's own business. MOM: What is a contract of service

In general, local and foreign employees working under a contract of service are covered by the Employment Act, with express exceptions including seafarers, domestic workers, statutory-board employees and civil servants. Part IV is not a version for every employee: it applies to workmen with a basic monthly salary of no more than S$4,500, and non-workmen with a basic monthly salary of no more than S$2,600; all managers and executives are outside Part IV. Basic salary here excludes overtime pay, bonuses, annual wage supplements, reimbursements and all allowances, so total compensation or a job title alone is not enough. MOM: Employment Act: who it covers

This article does not repeat employer registration after incorporation, first-employee onboarding, or the monthly payroll process. It addresses only how, once a direct hire has been decided, the contract and daily management can operate on the same facts. If worker classification, Part IV coverage, work-pass status, collective agreements, cross-border work location or the nature of the work cannot be confirmed, obtain advice from a qualified Singapore employment, tax, immigration or HR professional before allowing the person to start providing services.

An original tool: the four-card contract review

Reading a contract clause by clause is not the same as completing a review. A more practical approach is to put every item on one of four cards, without hiding a blank card behind the phrase “to be handled under company policy later.”

1. Relationship and coverage card. Record the actual working relationship, employee category, duties, basic monthly salary, whether the person is a manager or executive, whether they mainly perform manual work, and whether the arrangement is part-time or fixed-term. This determines which layer of Employment Act rules to check first; HR should not work backwards from an exit.
2. Written commitments card. Lock down the employer legal entity, start date, role and reporting line, pay period and pay components, working arrangement, leave, medical benefits, probation and notice. This is the same version the employee, line manager and payroll owner should all read.
3. Daily delivery card. Put rosters, rest, overtime applications, leave, performance feedback, disciplinary grievances, remote work, equipment and data permissions into accessible, versioned policies, and state who keeps the records.
4. Exceptions and escalation card. Mark classification disputes, repeated extensions, pregnancy or illness, possible discrimination, misconduct investigations, retrenchment, unions or collective agreements, and tax issues when a foreign employee exits as matters a template must not decide automatically.

The card is not a statutory form and will not determine an employer's termination conclusion. Its value is in putting statutory rules, contractual facts and changeable policies in their proper places: it can be used to check KET items such as working arrangements, pay, leave, probation and notice, while changes to rosters or policies must be traced back to the version the employee actually received. MOM: Key employment terms (KETs)

Make the contract deliverable as KETs, rather than leaving only an offer letter

MOM requires eligible employers to issue written KETs to employees covered by the Employment Act whose employment is for 14 days or more, within 14 days after they actually begin work. KETs may be in soft or hard copy, while shared leave policies and medical benefits may sit in an employee handbook or company intranet. Management should nevertheless settle a deliverable version before the start date: 14 days is the statutory delivery deadline, not a recommendation to leave key terms for their first confirmation on day 14. MOM: What is a contract of service

An executable principal contract or KET should at least make the following four sets of facts easy to find:

• Who and when. The employer's full name, the employee's name, role, main duties, start date, and the period and end arrangement for a fixed-term contract.
• How work is done. Daily working hours, working days each week, rest day, whether the role requires shifts, and the boundaries of the actual work location and remote work.
• How payment works. The pay period, basic salary, fixed allowances, fixed deductions, and the nature of other bonuses or incentives; where applicable, the overtime payment period and overtime rate.
• How terms change or end. Annual leave, outpatient sick leave, hospitalisation leave and other leave types, medical benefits, probation and notice; where the work location differs from the employee's address, the work location should also be made clear.

These items do not turn a contract into an employee handbook. Application routes, rostering systems, expense receipts, equipment lists and performance forms can sit in separate policies, but a statement that the company may change policies at any time cannot override pay, working arrangements or statutory minimums that have already been promised. MOM's KET list specifically includes, where applicable, trial period, notice period, leave and working arrangements. For PMEs who are not eligible for overtime pay, KETs may omit the overtime payment period and rate, but that does not leave the other working arrangements free to remain blank. MOM: Key employment terms (KETs)

Making the relationship between versions clear prevents many situations where the contract exists but cannot be used on the ground. The principal contract is suited to relatively stable commitments such as the role, basic salary, normal working arrangement, probation and notice. Attachments can contain the job description, bonus plan or optional work locations; policies explain how to apply, who approves, where records go and when a version takes effect. Every change should at least record its reason, effective date, affected people, approver and how employees obtain the new version. This is not to turn every small adjustment into a legal process; it prevents payroll, rostering tools, a manager's oral instructions and the employee's document from producing four different answers.

In practice, a “version exercise” can be completed when KETs are delivered: the business owner checks duties and working hours, payroll checks the pay period, fixed items and payment date, the employee confirms receipt of the handbook link or attachments, and HR keeps the version actually delivered. If the proposed change concerns basic salary, fixed allowances, normal hours, notice or statutory leave treatment, do not silently amend wording in a shared document. First mark it as a change requiring Singapore local professional review, then decide how it should be communicated and recorded in writing.

Probation is an assessment period, not a period outside the law

Singapore confirmation arrangements depend on the contract; the Employment Act does not itself set a uniform “confirmation date.” An employee's service is counted from the actual date work begins, rather than from confirmation. A three-month probation clause therefore does not turn the first three months into a gap without service, salary records or minimum protections. MOM: What is a contract of service

A probation clause should state the management actions, rather than merely saying that the company may terminate at its discretion: the start and review dates, observable standards relevant to the role, who gives feedback, what training or support the employee can receive, and who makes confirmation, extension or termination in writing. An extension should have a new duration and review point. A standard not mentioned in advance should not suddenly become the sole reason on the final day. If the company wants a different notice period during probation, it should expressly state each party's period; where the contract says otherwise, the probation notice period is the same as the notice period after confirmation. MOM: What is my notice period during probation and upon confirmation?

Probation does not pause service-based leave assessments. Employees covered by the Employment Act who have served at least three months are entitled to paid annual leave, calculated pro rata by completed months of service between three and 12 months, even while still on probation. The threshold for paid sick leave likewise depends on coverage under the Act and at least three months of service, rather than on confirmation. MOM: Annual leave eligibility and entitlement MOM: Sick leave eligibility and entitlement

Daily management from rosters to leave: do not put every employee under one rule

Hours, rest and overtime: assess Part IV before setting the roster

Part IV-covered employees have direct rules on hours, rest and overtime. In a common arrangement, where an employee works five days or fewer each week, contractual hours may be no more than nine hours a day or 44 hours a week; where they work more than five days a week, the maximum is eight hours a day or 44 hours a week. In general, an employee must not work more than six consecutive hours without a break, and the employer must provide one whole rest day each week. Overtime is work beyond normal working hours. Eligible employees must be paid at least 1.5 times the basic hourly rate; it is generally capped at 72 hours a month, and overtime pay must be paid within 14 days after the end of the salary period. MOM: Hours of work, overtime and rest day

Managers, executives and other employees outside the Part IV thresholds cannot be written up as automatically receiving the same statutory overtime calculation; their hours and rest terms are dealt with first under the contract. Equally, non-application of Part IV does not mean that rosters need not be recorded or that work can be extended without limit. The contract should state the normal working arrangement, working days, rest day, shifts if any and the overtime-approval route; actual attendance, rosters, rest and approved overtime should then be evidenced through daily records. Part IV coverage depends on the actual role and basic monthly salary, not a job title or an impression of total income. MOM: Employment Act: who it covers

Leave is not one uniform “benefits package”

The thresholds for annual leave, sick leave and public holidays cannot be replaced by the phrase “employees receive statutory leave.” Employees covered by the Employment Act who have served at least three months are entitled to paid annual leave. The statutory minimum is seven days in the first year of service, rising annually to 14 days in the eighth and later years; incomplete service years are calculated pro rata by completed months of service. MOM: Annual leave eligibility and entitlement

Paid outpatient sick leave and hospitalisation leave also require an assessment of service and notification conditions. They increase according to the rules from three to six months of service; after six months, the maximum is 14 days of outpatient sick leave and 60 days of hospitalisation leave a year, with the latter including the former. An employee unable to work should notify, or try to notify, the employer within 48 hours. A company may provide better medical benefits, but the contract or policy should distinguish statutory eligibility, additional company benefits and any required medical evidence. MOM: Sick leave eligibility and entitlement

Employees covered by the Employment Act have 11 paid public holidays each year. The outcome differs when a public holiday falls on a rest day or non-working day, or when the employee is required to work that day. For employees outside Part IV, public-holiday work may be dealt with by time off in lieu if both parties agree, but the term must not be blurred into “the company may offset all holiday work at its discretion.” The applicable policy should state how public-holiday substitution, extra pay, time off in lieu and actual working hours are treated, and apply that treatment through the year's rosters and records. MOM: Public holidays: entitlement and pay

Notice and salary in lieu: separate the method of ending employment from the reason

A notice clause should be specific enough for both sides to calculate the last day, rather than merely saying that a reasonable notice is required. Notice must be given in writing. Where the contract states a notice period, the employer and employee should have the same period. Where it does not, the default periods based on service are one day for less than 26 weeks, one week for 26 weeks to less than two years, two weeks for two years to less than five years, and four weeks for five years or more. The parties can also agree in writing to waive notice; the party that does not serve notice may pay salary in lieu equal to the salary for that period. MOM: Termination with notice

Notice or salary in lieu answers how the contract ends; it does not automatically validate why it ends. The principal contract can set out delivery methods, the final working day, handover, equipment return, closure of data access and the route for dealing with unused annual leave. It should not use a broad authorisation in place of a factual review of performance, discipline or business restructuring. Except where employment ends for misconduct, unused annual leave at termination is generally paid at the gross rate of the final salary. Approved annual leave taken during notice and using annual leave to offset the remaining notice period are different arrangements and should be expressly confirmed by both parties. MOM: Termination with notice

Suspected misconduct: investigate first, then discuss discipline

Where misconduct is suspected, a notice clause cannot be used as a shortcut around the process. MOM requires an employer to conduct a formal inquiry before taking disciplinary action: the employee should be told of the alleged conduct, given an opportunity to respond, and the inquiry should be led by someone who does not create an appearance of bias. The employee may be suspended while the inquiry takes place, but without the Commissioner for Labour's approval the suspension must not exceed one week and at least half salary must be paid. If the inquiry does not find misconduct, salary withheld during the suspension must be restored. MOM: Termination due to employee misconduct

After a due inquiry establishes misconduct, the permitted options include immediate demotion, suspension without pay for no more than one week, or termination without notice and without salary in lieu. The current Tripartite Guidelines on Wrongful Dismissal further state that an employer dismissing for misconduct or poor performance must prove that reason; misconduct is the only legitimate reason for dismissal without notice, and still requires a due inquiry. This article does not determine whether any employer's evidence meets that standard. “Failed probation,” “poor performance” or a manager's impression must not automatically be relabelled as misconduct. MOM: Tripartite Guidelines on Wrongful Dismissal

Retrenchment is not ordinary dismissal under another name

Redundancy or business restructuring is a different management route from a performance or disciplinary matter involving one person. MOM defines retrenchment as dismissal because of redundancy or reorganisation of the employer's business, trade or work; where the same position is not refilled soon after the contract ends, the dismissal may be presumed to be retrenchment. The definition applies to permanent employees and to fixed-term employees with a complete contract term of at least six months. MOM: Responsible retrenchment

Accordingly, do not select a person first and then look backwards for a “business need,” or use an ordinary notice letter to mix organisational change, the disappearance of a role, role replacement and individual performance. TAFEP guidance says that where redundancy is the reason, responsible retrenchment procedures should be followed; selection criteria should be fair and objective, and alternatives should be considered before actual notice. Registered Singapore businesses with at least 10 employees must submit a Mandatory Retrenchment Notification to MOM within five working days after notifying any employee of retrenchment. Retrenchment benefits, collective agreements, notice and tax or work-pass follow-up are outside this article's calculations and require separate local professional review when they arise. TAFEP: Dismissal and Termination of Employment MOM: Responsible retrenchment

On the exit date: settle, retain records, then close access

The due date for final salary changes with the way employment ends. Where an employee resigns and serves the full notice period, it should be paid on the last day of employment; where the employee resigns without serving notice, it is generally due within seven days after the last day. Where employment ends for misconduct or the employer terminates the contract, it should be paid on the last day, or, if that is not possible, within three working days after dismissal or termination. This section should not be expanded into a monthly-payroll process, but before issuing any termination document, payroll should at least confirm that salary, approved leave, salary in lieu, permitted deductions and the final payment date use the same version of the facts. MOM: Paying salary

An exit does not mean records may immediately be cleared. For employees covered by the Employment Act, an employer must keep detailed records for the latest two years for current employees; for employees who have left, the last two years of records must be kept for one further year after departure. Employment records include start and exit dates, working hours and rest, public holidays and leave details. Salary records include the salary period, payments, allowances, deductions, overtime and net salary. Closing access, returning equipment and revoking data access can be handled in company policy, but do not delete evidence before completing those record-keeping and lawful-retention assessments. MOM: Employment records

Stop-point checklist before termination

If any of the following applies, stop applying a template. Retain the contract version, KETs, rosters and attendance, pay and leave information, performance or inquiry materials, business decisions and service records, then have an authorised decision-maker and Singapore local professionals review the full facts:

1. Employee or contractor status, Part IV coverage, or whether the role is a manager, executive or workman has not been confirmed.
2. Probation, performance or the end of a fixed term is being treated as a reason for immediate exit, without agreed standards, feedback, a written decision or valid notice arrangements.
3. The relationship is proposed to end for misconduct, but the allegation, employee response, inquiry leader or suspended-pay arrangement is still incomplete.
4. The employee has pregnancy, illness, disability, a discrimination complaint, exercise of employment rights, a union or collective agreement, or another fact that may change the assessment.
5. The actual reason is disappearance of a role, restructuring, downsizing, a hiring freeze or replacement by another person, and may amount to retrenchment.
6. The contract, employee handbook, payroll system, roster, leave balance and manager's account are not the same version.
7. Responsibility has not been allocated for final salary, unused annual leave, salary in lieu, tax clearance, work-pass cancellation or data-retention duties.

If a salary or dismissal dispute has already begun, TADM's mediation guide lists the employment contract, salary or attendance records, CPF information and correspondence between the parties as materials that may support a salary-related claim, and distinguishes the procedural routes for salary-related and wrongful-dismissal matters. That does not mean either party will necessarily succeed, nor does it replace case-specific advice on the facts and law. It shows precisely why a company should first put the evidence chain in order before deciding. TADM: Mediation guide for salary-related claims and employment disputes

A good contract is not designed to let a company end a relationship faster. It lets both parties find the same set of checkable facts when work begins, in daily rostering, leave, assessment and exit. Complete the four-card review first, then put stop points in the hands of the people who are genuinely responsible. That prevents a foreign founder from mistaking a seemingly complete template for an answer that fits every employee and every situation. This article is based on public information current to 2026-08-24 and is not legal advice on any particular contract, disciplinary action, retrenchment or dismissal.