Payroll process steps in Singapore – Your Questions Answered
A tiny error in payroll output can damage your business’ credibility. It can also disturb your relationship with your employees and spoil the workplace environment. You must follow highly streamlined payroll process steps in Singapore as an employer.
And most worryingly, you may have to pay fines/penalties or even provide a valid explanation to the authorities. Yes, payroll management is a tough and resource-intensive task. It is why many companies hire payroll services in Singapore.
What Do Payroll Services in Singapore Do for You?
Payroll firms understand payroll and labour laws and have the latest updates. They know the steps to ensure your company’s payroll compliance. They help you meet your regulatory obligations in a prompt and timely fashion.
Payroll firms produce accurate output and keep you in the ‘good books’ of the regulating agencies. They also keep your employees happy and, in turn, enhance the productivity and efficiency of your business.
Let’s find answers to a few frequently asked questions related to the payroll process. You will find them most useful in ensuring your business’ compliance.
Which employee details do I need to know to generate their salaries?
- Employee full name –
- Date of birth –
- Date employed
- Immigration status –
- ID number –
- Pay frequency and currency
- Pay amount –
- Statutory contribution status –
- Preferred payment method
- Registered bank account
What are the ideal working conditions and wage rules I must follow in Singapore?
Working hours
A Singaporean workday is 9 hours long. A working week, on average, is 44 hours long. It is common for a business to have two days off per week.
Pay cycles
Most Singapore company follows a monthly pay cycle.
Minimum wages
Employees and employers negotiate salaries. There is no minimum wage in Singapore.
Overtime
The overtime rate is 1.5 times an employee’s basic hourly pay rate. It is capped at $2,600 ($13.60/hr) (manual labourers are excluded). Employees can put in up to 72 hours/month of overtime. Pay rates for rest days and public holidays vary.
What are the holidays and leave requirements?
- Paid holidays – 11 gazetted public holidays/year
- Annual leave – Employees get between 7-14 days of paid annual leave
- Sick leave – Employees get between 5-14 days of paid outpatient sick leave and 15-60 days of paid sick leaves in case of hospitalisation
- Maternity leave entitlements – New mothers can claim 16 weeks of paid maternity leave. You can claim reimbursement under the Government-Paid Maternity Leave Scheme
- Paternity leave – Employees can claim two weeks of government-paid paternity leave
- Childcare leave – Parents of a Singaporean child can claim six days of paid childcare leave
Non-compulsory leaves – Employees can also apply for leaves like;
- Marriage leave
- Compassionate leave
- Birthday leave
- Exam leave
What are the employer’s security and statutory contributions?
Singapore employers have to pay statutory contributions to be compliant. Here is a list of such contributions –
- Central Provident Fund (CPF)
- Self-Help Group (SHG) Funds
- Chinese Development Assistance Council Fund (CDAC)
- Eurasian Community Fund (ECF)
- Mosque Building and Mendaki Fund (MBMF)
- Singapore Indian Development Association Fund (SINDA)
- Skills Development Levy (SDL)
- Foreign Worker Levy (FWL)
Are itemised payslips compulsory in Singapore?
Yes. As per the dictate by the Ministry of Manpower (MoM), Singapore companies must prepare and issue itemised payslips to their employees that fall under the Employment Act.
Is the Annual Wage Supplement or 13th-month bonus compulsory for Singapore employers?
No. Sometimes an employer shows appreciation for the hard work put in by its employees by paying Annual Wage Supplement or a 13th-month bonus. However, it is not a compulsion. There is no binding on the company to pay it unless it is part of the employee contract.
Can business owners process their company’s payroll themselves?
Yes. It is wise to hire payroll services in Singapore. However, it is a time-consuming and resource-intensive task. Yes, it costs. However, you get accurate and compliant output.
Do Singapore companies pay payroll taxes?
It is not compulsory for Singapore employers to withhold taxes from their employees’ pay. However, they do so if the employee is a foreigner and ceases to work in Singapore or goes abroad for at least three months. They also deduct and pay statutory contributions like social security for their employees. They may also calculate and pay insurance for their employees.
Yes, it is difficult for a new business owner to grasp the complexities involved in the payroll process steps in Singapore. It becomes extremely complex if you have a geographically distributed team. And as the business grows and hires more employees, processing payroll accurately and on time becomes difficult.
If you have reached this point, consider hiring payroll services in Singapore. They start by installing a reliable payroll process. Their staff has the experience and latest knowledge to execute your payroll compliantly.
Give us a call at +65-6536 0036 or send a message at info@sbsgroup.com.sg to know our affordable payroll costs and how we can customise our payroll solutions for your company.
