Annual Leave Entitlement in Singapore

Every Employment Act employee who has worked for you for at least 3 months is entitled to paid annual leave — 7 days in the first year of service, rising one day per year to a statutory cap of 14 days from the eighth year. That floor comes from the Employment Act, administered by MOM, and since the 2019 amendments it covers everyone on your payroll, managers and executives included.

Last reviewed 10 June 2026 · Source: Ministry of Manpower (Employment Act).

Who gets statutory annual leave

Two gates, both simple. The employee must be covered by the Employment Act — which, since 1 April 2019, means every employee under a contract of service, including PMEs (professionals, managers and executives) — and must have completed 3 months of service with you.

An independent contractor invoicing under a contract for service gets no statutory leave; their time off is whatever the contract says. As with the salary deadlines, MOM looks at the substance of the relationship, not the label — someone working your roster under your direction is an employee for leave purposes too.

The first 3 months are a waiting period, not a void: once the employee crosses month 3, leave accrues from the start date, pro-rated by completed months.

The statutory ladder: 7 to 14 days

Year of service	Statutory minimum AL
1st	7 days
2nd	8 days
3rd	9 days
4th	10 days
5th	11 days
6th	12 days
7th	13 days
8th and after	14 days

Two things SME bosses regularly get backwards. First, the ladder counts years of service with you, not total career years — a 20-year veteran joining your firm starts at 7 statutory days. Second, these are minimums. The Singapore market norm for office roles is 14–18 contractual days from day one; offering the statutory 7 is legal but will cost you candidates.

If your contract grants more than the floor, the contractual figure governs everything below — accrual, pro-rating and encashment all run off the contractual entitlement.

Pro-rated leave for an incomplete year

An employee who has served at least 3 months but less than a full year gets a proportionate slice:

Completed months of service ÷ 12 × annual entitlement, with MOM's rounding rule: a fraction below half a day rounds down, and half a day or more rounds up to a full day.

Worked example — joins 1 March, wants to know her balance at 30 September, on a 7-day first-year entitlement: 7 completed months ÷ 12 × 7 days = 4.08 days → rounds down to 4 days.

The same formula prices the exit: an employee leaving mid-year is entitled to leave earned up to the last completed month of service. Anything already taken beyond that earned figure is an over-taken balance you may offset against final salary — provided the contract says so.

Carry-forward: Part IV employees get a statutory guarantee

What happens to unused leave at year end splits by whether the employee is protected by Part IV of the Employment Act — workmen earning up to $4,500 basic monthly and non-workmen up to $2,600:

Employee	Unused leave at year end
Part IV (workman ≤ $4,500 / non-workman ≤ $2,600)	Must be allowed to carry forward to the next 12 months; forfeitable if still unused by 31 December of the following year
Everyone else (incl. PMEs)	Whatever the contract says — carry-forward, encashment, or forfeiture as agreed

For the typical micro-SME this means your admin staff and ops crew likely carry a statutory guarantee, while your managers' leave is governed purely by your employment contract. A "use it or lose it by December" policy is enforceable against a PME but not against a Part IV employee's first carry-forward year.

Whichever regime applies, put the policy in writing. Most leave disputes are not about the law — they are about a policy nobody wrote down.

When leave can be forfeited

The Employment Act lets an employee's leave entitlement lapse in two situations:

• Absence without permission or reasonable excuse for more than 20% of the working days in the month or year.
• Dismissal on grounds of misconduct — following due inquiry.

Keep a separate threshold separate: an employee absent without approval for more than 2 working days triggers the Employment Act's abandonment test, and the practical consequence for payroll is that you are not required to encash their unused leave. The >20% test removes the entitlement itself; the >2-day test removes the encashment obligation. Mixing the two up is the most common error in DIY leave policies.

Encashment when someone leaves

On an ordinary resignation or termination, the employee's earned-but-unused leave — computed with the pro-rata formula above — is settled in the final payrun, normally as payment in lieu at the gross rate of pay. It lands on the same tight clock as the rest of the final salary: last day of employment when notice was served.

The exceptions follow from the forfeiture rules: no encashment is owed to an employee dismissed for misconduct, and none is required where the employee walked out — absent without approval for more than 2 working days.

Encashed leave is wages for CPF purposes, so it flows into the final month's CPF computation like any other Ordinary Wage.

Part-timers and the hours-based formula

Part-time employees (under 35 hours a week) get annual leave too, pro-rated by hours against a comparable full-timer and granted in hours rather than days. The mechanics — and the childcare-leave quirks that come with them — are a separate topic; the point for now is that "part-time" never means "no leave".

What to set up in practice

• Record each employee's start date and contractual entitlement — both feed every calculation above.
• Decide and document your leave year (calendar year is the default and the simplest).
• Apply the pro-rata formula with MOM's half-day rounding for joiners and leavers — by hand it is error-prone the moment you have more than two or three movements a year, which is exactly the calculation payroll software exists to do.
• Classify who is Part IV so carry-forward is handled correctly at year end.

Leave records are employment records: keep them 2 years for current employees and 1 year after someone leaves, the same retention clock as payslips.