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Singapore Payroll

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Singapore Payroll

2021-02-04T13:14:19+08:00May 23, 2019|0 Comments

Every company needs proper management of its payroll. This is also true of Singapore companies. A company that manages its payroll well will cause its employees to be highly satisfied and build its reputation in its industry’s field.

The Singapore Payroll

In Singapore, employers are not mandated by law to pay a minimum amount of wages to their employees. This means that there is no recognized minimum working wage. However, when running a business that has grown beyond the point where one can confidently handle and preside over operations on one’s own, attention to how a successful Singapore payroll management system works must be paid. Information on this matter will be important to the running of the business.

The administration of an employee’s financial record which includes, but is not limited to, wages, salaries, bonuses, net pay, and deductions is referred to as payroll management.

Of course, before one can even begin to consider payroll management of the company, the company itself has to be incorporated. We at Paul Hype Page & Co are always willing to help you with this task. Our experts will ensure that the incorporation of your company is completed in a stress-free, orderly manner.

Why Payroll Management Is Important

A payroll management system is not only concerned part with overseeing the payment of salaries and benefits or the deductions of certain fees or levies from an employee’s pay. It also plays a crucial role in ensuring that the company complies with legislation regarding employee remuneration, payment, welfare, and other financial matters.

Here are some essential facts about employee payroll management in Singapore.

  • Salaries must be paid on a monthly basis. Salaries paid must be monthly and employees must be paid within a week of the end of the salary period. However, employees may occasionally be paid before the salary period ends. Failure to comply with this salary payment structure is punishable by law.
  • Salaries cover only basic pay and allowances. Other benefits such as travel, housing, and food allowances are excluded. Salaries only represent the basic pay of an employee during the working contract period. Salaries do not account for other benefits and allowances such as pensions, health insurance, housing, food, travelling allowances, and a host of other benefits.
  • Payslips must be itemized. All employers are required to issue payslips to all employees on their payroll as stipulated in the Employment Act. This payslip may be issued electronically or in hard copy and must carry information such as basic salary and allowances, payment date, salary period, overtime payments, and any deductions made during the payment period. Companies that fail to do this will be fined.
  • Employment records must be well-documented. Employers are obligated to keep at least a two-year employment record of all their current employees and at least a one-year record of erstwhile employees after they depart the company.
  • Overtime payments must be calculated fairly. Any extra work done after the regular work period (excluding breaks or timeouts) is referred to as overtime. An employee is limited to a maximum of 72 hours of overtime work every month. Overtime payments are 1.5 times the amount of the basic salary and are payable a fortnight after the last salary.
  • Employees’ salaries must be pro-rated when they work for incomplete months. If for any reason an employee is unable to work for the entire month, the employee is entitled to a pro-rated part of their salary for the specific period they worked. The standard method for calculating the pro-rated salary of an employee is calculated by dividing the employee’s monthly gross rate of pay by the number of working days in a month, then multiplying this result by the number of days the employee worked in that month.

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E A S I E R • F A S T E R • B E T T E R

  • Contributions, statutory requirements, and mandatory levies must be taken into account. Apart from the standard Central Provident Fund (CPF) contributions, employers are mandated to contribute to the following monthly:
  • Ethnic funds aimed at helping vulnerable people in their ethnic communities such as ECF, CDAC, SINDA, and MVMF
  • Skill Development Levy, which makes the company eligible for training grants should it wish to train its employees in the future
  • CPF levies for National Servicemen regardless of whether they are routinely sent for training.
  • A levy for each foreign employee who possesses an S Pass Work Permit.
  • There are strict requirements for statutory reporting.

The IRAS has directed that from 2017, all employers that have received a notice to electronically submit their employment income or employers that have at least 10 workers must electronically submit the complete income information of all their employees before March 1 every year.

IR21 forms for tax clearance must also be filed by employers with foreign employees not later than a month before they begin a posting abroad, resign or no longer be under the employment of the company, or be away from Singapore for more than three months.

IR21 forms are not, however, the only important part of Singapore taxation. Singapore taxes, which include income tax, corporate tax, and several others, can be somewhat complex to handle. This is where we at Paul Hype Page & Co come in. Our tax experts will help you solve any problems you may have which are related to tax. We will work with you to make payment of your taxes a problem-free experience.

In conclusion, an efficient payroll management system is one that is maintained and updated promptly, disburses wages and salaries punctually, and processes data accurately. Aside from helping the employer abide by the Employment Act and other applicable labour laws, employees will also benefit from a system where their pay and benefits are accorded to them when they are due.

Once the business starts to grow in terms of both financial might and number of employees, the business owner’s payroll management will begin to require a more advanced approach. This means that more attention and effort will be needed to adequately manage the business. Those who own or run a small or medium enterprise (SME) in Singapore which employs 25 staff members or fewer may discover that they are better off completely outsourcing their payroll management processes to a separate provider instead trying to form or manage an in-house team.  Not only is this bound to be less stressful and time-consuming, but it is also likely that an independent payroll service provider would do a better job at a lower cost.

Frequently Asked Questions

  • Are payslips mandatory in Singapore?

Yes. Starting from April 1, 2016, all employers in Singapore are mandated under the Employment Act to issue payslips to their employees monthly.

  • How late can employers pay their employees?

An employer must not pay an employee later than seven days after the end of the normal salary period. For overtime payments, the employer must not pay the employee later than 14 days after the last salary period.

  • What information must be on a payslip?

The Employment Act stipulates that a payslip must include the following:

  • Date of salary payment
  • Basic salary and allowances
  • Overtime pay (where applicable)
  • Salary period
  • Any deductions, levies, or fees charged

Singapore Payroll FAQs

What information must be on a payslip?2020-07-03T10:06:52+08:00

The Employment Act stipulates that a payslip must include the following:

  • Date of salary payment
  • Basic salary and allowances
  • Overtime pay (where applicable)
  • Salary period
  • Any deductions, levies, or fees charged
How late can employers pay their employees?2020-07-03T10:06:30+08:00

An employer must not pay an employee later than seven days after the end of the normal salary period. For overtime payments, the employer must not pay the employee later than 14 days after the last salary period.

Are payslips mandatory in Singapore?2020-07-03T10:05:53+08:00

Yes. Starting from April 1, 2016, all employers in Singapore are mandated under the Employment Act to issue payslips to their employees monthly.

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