Payroll regulations in Singapore can be complicated and tricky, especially if you’re a foreign business owner – outsource your payroll function to trusted experts to pay your employees on time, every time, and stay compliant.
About Payroll Outsourcing
Payroll outsourcing is the delegation of payroll tasks to external service providers, allowing businesses to streamline operations and ensure accurate employee salary processing. By leveraging specialized expertise, companies can offload the complexities of payroll calculations, tax compliance, and benefits administration, freeing up time and resources for core business activities. This strategic approach enhances efficiency, reduces costs, and provides peace of mind knowing that payroll processes are handled by professionals.
Reasons to Outsource Payroll in Singapore
Avoid complications and complexities of payroll in Singapore
Peace of mind with payroll services that are fully compliant with the regulations
Stay updated with the latest legislative changes to the Employment Act
Worry-free payment to employees according to the breakdown of CPF, funds, etc.
Save time settling payroll and focus on revenue-generating actions
Reduce long-term overheads of hiring a full time employee and training them
Singapore Payroll Management: Key Things to Note
To ensure that employees are well-protected, employers in Singapore have to fulfil these 6 requirements for a successful payroll management and avoid facing penalties from non-compliance.
Salary must be paid at least once a month
Salary to be paid within 7 days after the period of salaried work
Employers are required to make monthly contributions to their employees’ CPF accounts. The contribution rates vary based on the employees’ ages and monthly income. It is crucial to calculate and process CPF contributions accurately and submit the necessary documentation on time.
Issuance of itemised pay slips are mandatory
Pay slips must be itemised to include date of payment, basic salary and allowances, overtime pay, and other details – fines will be issued for non-compliance.
Salary does not include all allowances
Your employee’s salary covers basic pay and work-related allowances. Food, housing, traveling, transportation, pension, expenses incurred during the course of work, and retrenchment benefits are not considered under salary.
Overtime pay calculation
Ensure that all overtime pay is calculated accurately while noting that employees cannot work more than 72 overtime hours a month. The rate for overtime pay starts from 1.5 times the hourly basic rate and must be paid 14 days from the last salaried day.
Prorating for less than a month’s worth of work
If your employee did not completely work for his salary month, his salary will be prorated for the period of work.
Singapore employers must keep at least 2 years of employment records for every employee and ex-employee’s records to be kept for 1 year after leaving their role.
Data Confidentiality and Security
Handling sensitive employee information requires strict adherence to data confidentiality and security protocols. Employers must ensure that appropriate measures are in place to protect employee data, including secure storage, restricted access, and compliance with data protection regulations.
Payroll in Singapore: What Foreign Employers Need to Know
If you’re a foreign business owner in Singapore, there are 3 key things that you’ll need to know when it comes to payroll in Singapore.
1. Employee Central Provident Fund (CPF)
The CPF is one of Singapore’s mandatory social security savings scheme where both employees and employers contribute based on the salary. The employee is expected to contribute 20% of its gross salary, while the employer will contribute 17% of the employee’s gross salary.
For example …
Employee A’s gross monthly salary is S$3,000 and she is 25 years old. Employer has to contribute 17% of the salary.
Total cost to employer for Employee A = (Monthly Gross Salary CPF × Contribution Rate) + Monthly Gross Salary
Effective from 1 Jan 2023, the CPF contribution rates for seniors aged between 56 to 70 years old are set to increase on both employee and employer levels.
CPF Contribution Rates from 1 Jan 2023
(% of wage)
(% of wage)
(% of wage)
(% of wage)
55 and below
Above 55 to 60
Above 60 to 65
Above 65 to 70
Another key change from September 2023 is the increase in CPF monthly salary ceiling from S$6,000 to S$6,300, which will continue to increase incrementally, reaching to S$8,000 from January 2026 onwards. This means that the amount of CPF payable by the employer is set to increase if they have employees earning more than the current ceiling.
CPF Monthly Salary Ceiling
2. Community Funds
Aside from the CPF contributions, every employee is required to donate a small amount based on their monthly total wages to self-help groups in Singapore, unless they withdraw.
Chinese Development- Assistance Council (CDAC) Fund
Eurasian Community Fund
Mosque Building & Mendaki Fund (MBMF)
Singapore-Indian Development Association (SINDA) Fund
3. Tax Clearances
It is also Singapore employers’ obligation to do income tax clearance for all employees via Form IR8A. The Auto Inclusion Scheme (AIS) is also mandatory for all companies with 5 or more employees – all employers must submit their employee’s employment income for each year.
As such, employers need to know about income tax in Singapore. The current personal income progressive tax rate on employment income is from 0% to 24% for tax residents. For non-tax residents, it is a high flat rate of 15% or the progressive rate, whichever is higher.
Importance of Singapore Employment Contract
The Singapore Employment Contract is a critical aspect when hiring local or foreign employees in your company as the Employment Act does not fully cover every employee. For instance, if you are utilising payroll services for both your in-house and outsourced workforce, the policies will be different for each type of worker. Thus, you will need to understand the Singapore Employment Contract to know your rights as an employer and what you should provide your employees.
Employment Act Part IV
Rest days, hours of work, and other conditions of service
Applies only to:
Workman doing manual labour earning a basic monthly salary of below S$4,500
Employees who are not a workman with a basic monthly salary of below $$2,600
*Does not cover all managers and executives.
Your Questions, Answered
Payroll management can be daunting – here are the top 5 questions regarding Singapore payroll services that will clear your doubts!
The rates for payroll outsourcing in Singapore may vary depending on size of the company or the number of employees they have. This is because larger companies with more employees will require more payroll to process compared to smaller companies. Talk to us today for more precise quotations.
Can I do the payroll myself?admin2023-02-21T10:43:27+08:00
Yes, you can. Some companies do have their own HR department to work on their payroll. However, training HRs and finance officers can be taxing to do, especially for startup companies. Hiring outsourced payroll services can be more convenient in this case.
Do employers pay taxes on payroll?admin2023-02-21T10:44:44+08:00
Apart from the government issued holidays and leave requirements, payroll in Singapore may also consider the company policies about leaves. Thus, the requirements may be subjective and vary from one company to another.
Payroll in Singapore Articles
Supplement your existing knowledge with additional insightful readings that we’ve crafted based on our 14 years of experience.
We cover end-to-end payroll services in Singapore, including consulting and drafting of your employment contract to ensure all parties are well-covered. Whether you are a startup company or an established one that is in the midst of expansion, our payroll outsourcing can unburden your workforce with administrative tasks. Get to know more about our payroll services today!
Computation of gross and net salary
Partitioning of all contributions
Payment of salaries and CPF with pay slips
Submission of Auto-Inclusion Scheme (AIS) with IRAS
Monthly & yearly reporting
CPF registration & GIRO setup
Preparation of annual IR8A forms for tax submissions
Preparation of IR21, National Service Make-Up Pay (NS MUP), GML & CPF Refund