Key Things to Consider When Managing Payroll in Singapore
Yes, Singapore payroll processing is difficult and time-consuming. It is why many employers trust outsource payroll services in Singapore for the task. Doing so helps you stay focused on business growth.
As a Singapore employer, you must follow the Singapore Employment Act and pay employees within seven days of the end of your payroll cycle. The law also states that you have to pay a salary at least once a month per the terms and conditions of the employee contract.
These professional payroll services in Singapore are experienced and competent. They know the latest payroll and labour rules changes that can affect your payroll processing.
They know the things to consider when managing payroll in Singapore. They accurately calculate your employees’ CPF contributions, statutory levies, taxes, holiday pays and leaves, benefits, bonuses, loans, Etc.
You can trust your provider of payroll services in Singapore to generate accurate salaries within the deadline and ensure your compliance.
Things to Consider When Managing Payroll in Singapore
Definition of Salary
Salary is the remuneration employers pay their employees for the work done following the employment contract. It covers the allowances paid to an employee. However, it does not include the employer’s provident fund share, the employee’s on-the-job expenses, travelling allowances, or retirement benefits.
Frequency of Salary Disbursement
Following Employment Act, you, as a Singapore employer, must pay the salary at least once a month. You must pay your permanent employees within 7 days at the end of the pay cycle. You must also pay overtime salary within 14 days after the pay cycle.
Payment of Salary
Your provider of outsource payroll services in Singapore generate itemised payslips for your employees. They also deposit salaries in the employee’s registered bank account online or directly.
Components of Itemised Payslips
Singapore companies must deliver detailed and itemised payslips to their employees.
- Full name of employer
- Full name of an employee
- Date of payment (or dates if the payslips consolidate multiple payments)
- Basic salary – for hourly, daily or piece-rated workers, indicates:
- The basic rate of pay
- Total number of hours or days worked or pieces produced
- Start and end date of the salary period
- Allowances paid for salary period, such as:
- All fixed allowances
- All ad-hoc allowances
- Any other additional payment for each salary period, such as:
- Rest-day pay
- Public holiday pay
- Deductions made for each salary period, such as:
- All fixed statutory deductions
- All ad-hoc deductions
- Overtime hours worked
- Overtime pay
- Start and end date of overtime payroll processing
- Net salary paid in total
Maintaining Payroll Record
As per the law, you must retain and maintain all the payslip records (in hard or soft form) for at least two years for all your current employees. It also mandates maintaining payslips of your ex-employee payslips for a year.
Statutory Payroll Contributions in Singapore
As a Singapore employer, you must pay mandatory contributions to benefit your employees. Outsource payroll services in Singapore helps you calculate:
- Central Provident Fund (CPF)
- Ethnic Fund
- Skill Development Levy
- Foreign Workers Levy
Deductions Not Permitted in Foreigner’s Salary
As per Singapore’s Employment of Foreign Manpower Act, you cannot deduct the expenses listed below from the foreign worker’s salary.
- Cost of recruitment
- Medical expenses/insurance premiums
- Cost of work pass renewal
- Repatriation costs
- Statutory levies
- Security bond payment
- Cost of mandatory training
Salary Payments that are not Compulsory
You have the choice of not paying the 13th month Annual Wage Supplement, bonuses and variable pay to your employees. It is not compulsory. However, you must pay if it is mentioned in the employment contract or the agreement with the union of employees.
Payroll management is a non-core business activity that can distract you from achieving your business goals. It is why modern business owners like you trust outsource payroll services in Singapore. Doing so helps you save time, resources, and money.