After starting your company, the next step is to hire employees. Outsourcing your company’s payroll processing function frees up resources, including valuable human capital, and allows you to focus on and engage in projects that add value to your business.
Tax in Singapore
Income Tax rates depend on an individual’s tax residency status. An individual qualifies as a tax resident if he/she is a:
- Singapore Citizen or Singapore Permanent Resident who resides in Singapore except for temporary absences; or
- Foreigner who has stayed / worked in Singapore (excludes director of a company) for 183 days or more in the year preceding the YA
If an individual does not meet the eligibility, they will be treated as a non-resident of Singapore for tax purposes.
What are the Recent Changes to Singapore’s income Tax Rates
Tax in Singapore changed over the years under the authority of Singapore Income Tax Department in 1947 and Inland Revenue Authority of Singapore (IRAS) that was established in 1992.
Here are two changes in the tax rates observed:
| Type of Tax | Previous | Current |
|---|---|---|
| Personal Income Tax / Employment Income | Residents: Progressive Rate from 0% to 20% | Residents: Progressive Rate from 0% to 22%Non-Residents: Higher of Flat Rate of 15% or Progressive Rate |
| Corporate Income Tax | Steadily declined from 26% over the years | Flat rate of 17% on Chargeable Income, for both foreign or local companies. |
Tax exemptions on international air travel and shipping income
Singapore offers tax exemptions to countries that are heavily involved in shipping and air routes to and from Singapore like Indonesia. These exemptions encourage the people of these countries to continue to engage with and conduct business activities in Singapore.
Partnerships
Although a partnership conducts business operations, the owners of a partnership are to be regarded as individuals.
Therefore, they are to be taxed as individuals or as corporate partners. They are thus taxed based on the share of the partnership income which they have generated.
What Are the Payroll Services Provided & How Much Does It Cost
Here at Paul Hype Page & Co, we have Payroll Services to help you pay your employees quickly and easily, such as:
- Payroll Basic
- Leave and Holiday Entitlement
- Giro Payment
- Year End Tax Procedure
We also offer extensive experience in the operation of the payroll function and better payroll experience that is service-focused and customised to meet your company’s unique needs:
- Calculation of monthly payroll
- Employer registration with the Singapore Central Provident Fund (“CPF”)
- Calculation of statutory deductions including CPF, skills development levy, foreign worker levy and ethnic/religious fund deductions
- Payroll processing and annual reporting
- Issuance and maintenance of electronic pay slips and remuneration reports
- Update of Annual leave and Medical Leave records
The cost of payroll services starts from S$680 per staff per annum, with a minimum of 1 year subscription.
| Services | Cost (SGD) |
|---|---|
| Payroll set-up | $280 per staff per annum |
| Monthly pay slip | $30 per month |
| Annual income tax summary statement compilation | $40 per annum per statement |
| CPF online submission | $150 per staff per month |
Thinking of setting up a company or looking for payroll services? Reach out to us for free consultation on company incorporation and other corporate services like taxation today!
FAQs
Yes, due to its stable political environment in South-East Asia, it offers entrepreneurs and investors security and comfort.
Yes, if the withholding tax payment is not received by the due date, a 5% penalty will be imposed. Additional penalties of 1% per month may be imposed if the tax remains unpaid 30 days after the imposition of the 5% penalty.
Payroll processing in Singapore has to be managed properly as it involves specific rules and regulations. If not handled properly then it may lead to discrepancies and affect payroll accounting which will result in inaccurate report data for income tax filing
Singapore has one of the most attractive corporate tax structures in the world, Singapore also has world-class infrastructure and is known to be a business-friendly environment.
