Singapore is one of the few nations without a minimum wage regulation, as you may already be aware. However, this guide outlines several things you need to know for proper payroll management if your company is expanding beyond a one-man operation.

1. Basic pay and allowances are included in salary. It excludes travel, food and housing allowances.

Salary is only remuneration for labour performed under a service agreement. In addition to not including housing, food, or travel expenses, it also excludes pension benefits, work-related expenses, and layoff compensation.

2. Paying the salary at least once a month is required.

Salaries must be paid by employers at least once a month, or more frequently if they so wish. Wage non-payment is an offense, and it must be resolved within 7 days of the end of the salary period.

3. You must have itemized payslips.

All companies must now provide itemized pay slips to employees who are protected by the Employment Act as of April 1, 2016. Hard copies or digital versions must include information such the payment date, basic salary and benefits, overtime pay, salary period, and any deductions made. A fine will be imposed if you don’t.

4. Maintain employment records.

Are you maintaining thorough records of your employees’ employment and pay? Employers are required to maintain such data for every employee in Singapore for a period of two years. After an employee leaves a job, records about them must be kept for a year.

5. Pro-rate an employee’s salary for incomplete work months.

An employee is only entitled to the pro-rated amount of his salary for the portion of the month he worked if he works for an incomplete month. The following formula is used to determine earnings for a partial month:

Monthly gross

rate of pay

——————— X number of days’ employee worked in that month

# Working

days in month

6. Accurately calculate overtime pay.

Any work performed after regular working hours is considered overtime labour (excluding breaks). A worker is limited to 72 hours of overtime each month. You will be required to pay at least 1.5 times the hourly base rate of pay for overtime work. After the wage period’s final day, payment must be given within 14 days.

7. Pay attention to statutory requirements, required levies, and contributions.

Employers are required to make the following monthly contributions in addition to Central Provident Fund (CPF) contributions:

• Ethnic organizations like CDAC, ECF, MBMF, and SINDA that work to aid the underprivileged in their particular ethnic communities;

• When you send your staff for training, the Skills Development Levy gives you training grants;

• National Servicemen are required to pay CPF payments even if they regularly attend NS training. Employers are not required to compensate NS personnel for their missed work, though.

• Employers who hire foreign nationals with work permits or S Passes must also pay monthly charges for each employee.

8. Pay attention to the legal reporting requirements.

Employers must electronically submit their employees’ income information to IRAS by the first of March each year starting with the Year of Assessment 2017 if they have either (i) received notice to file their employment income electronically or (ii) had 10 or more workers employed by them for the entire year.

As a Final Thought

Not only does precise processing of payrolls need to be done, but also appropriate maintenance and on-time disbursement. In addition to guaranteeing compliance, this boosts staff morale and keeps workers motivated.

Payroll processing may take more time and work from you as your company expands and your employee profile becomes more sophisticated.

If your small to midsize Singaporean business employs up to 25 people, outsourcing to a payroll service provider may be more affordable and less stressful than attempting to perform this operation internally.