Singapore is one of the most developed economies in the world, and it also became one of the most representative markets for developing and retaining talented employees, with a high degree of skills and knowledge. Investors interested in opening a company in Singapore are advised to know the local legislation in terms of payroll.
If you need to find out more details on this subject, our Singapore accounting company can provide you with an in-depth presentation on this subject. If you need other types of services, for example company incorporation services in India, we invite you to contact our partners – IndiaCompanyFormation.com.
|Employee/Emlpoyer Registration Services (Yes/No)|
Payroll Setup Services (Yes/No)
Employee Records Setup and Maintenace Services (Yes/No)
|Employee Remuneration Computation|
Salary, bonuses, overtime, incentives, allowances
|Mandatory Contributions for Employees||Registration with the Central Provident Fund, Skills Development Levy|
|Employment Contributions for Employers|
Skills Development Levy, Foreign Workers Levy for foreign employees
|Payroll Reporting Requirements|
Electronic filing requirements for companies with more than 10 workers
|Social Security Contribution for Employees||20% for employees with salaries above 20,000 SGD|
|Social Security Contribution for Employers||17% of the wages of employees|
|Employment Statutory Filing Requirements||March 1st of every year|
Table of Contents
Setting up the payroll in Singapore
The payroll starts once a Singapore company hires its first employee. For this purpose, the company must register as an employer followed by the registration of the employees with various funds and authorities. The payroll is usually handled by the Human Resources (HR) department, however, it is not uncommon for businesses to hire accounting firms in Singapore to perform these tasks, especially considering they can save important amounts of money by not creating an entire in-house department.
Payroll processing implies respecting specific regulations, however, compared to other jurisdictions it is worth noting that Singapore imposes fewer requirements for employers. For example, there is no obligation for companies to withhold taxes for the salaries they pay to employees, they are only required to withhold the contributions associated with the wages.
Payroll setup in Singapore also implies:
- issuing itemized paychecks (these can also be issued as online payslips);
- registering foreign employees for all mandatory contributions (the employer is also in charge of obtaining the work permit on behalf of the employee);
- registering for all contributions and funds as an employer and employees;
- keeping accurate and updated information on employees (work contracts, additional documents).
It is important to note that paychecks must contain specific information, such as the date of payment, the basic salary and the net amount, as well as the contributions (the amount and the percentage).
If you need payroll services, our accountants in Singapore are at your service in order to ease the tasks associated with the processing and payment of salaries. We also provide consultancy services in order for you to simplify payroll procedures. Furthermore, in case you need payroll services in another country like the Netherlands, we can put you in contact with our partner accounting firm – Dutch-Accountants.com.
Registration of employees with the Singapore authorities
Some of the most important steps when opening a company in Singapore are related to its registration with several authorities in order to pay the mandatory contributions as an employer.
In order to be able to pay the taxes on salaries and the social contributions related to each employee, a Singapore company must register with the Central Provident Fund (CPF) as an employer. Then, once the company starts hiring employees, it must also register them with the same fund.
It should be noted that the same procedure is available for foreign companies hiring employees in Singapore, therefore branches and subsidiaries have the same obligations are domestic ones from a payroll point of view.
When using the services of our accounting firm in Singapore, the payroll process, including the registration with the CPF can be handled by us so that you focus solely on the business operations.
The registration of employees for payroll in Singapore implies filing several documents with the CPF, however, these are slightly different for Singapore nationals and foreign citizens. While Singapore citizens will only need a copy of their IDs and the National Registration Identification Card for permanent residents, in the case of foreign citizens, the following additional papers are required:
- copies of the passport and IDs,
- educational background and proof of qualifications,
- CVs and photographs,
- police clearance and medical exam results.
For detailed information, our accountant in Singapore is at your service.
You can read about payroll in Singapore in the infographic below:
Payroll management in Singapore
Payroll management in Singapore is performed by the HR department and the finance department in a company. The HR department makes sure all the payroll documentation is correctly and accurately processed, while the finance department ensures all the payments are made within an appropriate time frame.
Payroll management in Singapore depends very much on the size of the company. While large companies in Singapore request the specialized services of experts, small and medium companies will hire personnel to handle these procedures. If you need services related to payroll in Singapore, you can rely on our local accounting experts.
Salary in Singapore
The Employment Act specifies that a salary in Singapore refers to the remuneration received by an employee in exchange for the work activity he or she performed for the benefit of the company. The salary is usually negotiated by the employer and the employee, and it is delivered as prescribed by the employment contract.
The following list highlights the most important elements when referring to payroll in Singapore:
- Salary: the remuneration agreed between the employer and the employee. It does not include elements such as payments for overtime work or bonuses given by the company; our Singapore accountants can provide you with more information on the elements which are not included in the salary.
- Payment frequency: in most cases, this is once a month, however, there are situations in which the remuneration is paid differently, such as in case of dismissal or resignation.
- Payment method: this is done using the employee’s bank account or as otherwise agreed between the two parties.
- Payslips: these are issued together with the salary and include the identification details for the employer and the employee, the payment period and the payment details (basic salary and any other additional paymePayslipsonuses, overtime, etc.).
- Adequate records: employers in Singapore are required to maintain accurate records of payslips as well as employee records (including personal details, the commencement of employment, holiday leave, etc.).
Apart from the salary, Singapore employees are also entitled to other benefits among which:
- overtime or bonus payments,
- annual bonuses,
- reimbursements for certain types of expenses,
- other types of allowances.
All these types of incomes must be included in the payroll in Singapore. The salary is calculated for a full month’s rendered services.
You can also rely on us if you want to register your company for GST in Singapore.
Mandatory contributions in Singapore
As mentioned above, a Singapore company must contribute to specific funds, among which:
- the Central Provident Fund;
- the Skills Development Levy – only the employer is required to contribute to this fund;
- the National Servicemen when specific training sessions must be completed;
- where the case requires, certain contributions to ethnic funds must be made with the purpose of helping unfavored ethnic communities.
When hiring foreign workers with S passes, the employer is also required to pay specific levies for each employee.
Singapore has specific regulations when it comes to payroll and our accountants can guide you through the legal requirements that must be met in order to respect them.
Apart from our payroll services, you can also rely on us for audit services in Singapore.
Payroll reporting requirements in Singapore
In 2017, specific statutory reporting requirements were enforced for Singapore companies. Employers are now required to file employment income documents electronically if they have more than 10 workers. The documents must be filed by the 1st of March each year for the previous year.
Singapore companies with foreign employees must also file Form IR21 for tax clearance purposes upon commencement, relocation, or termination of the work contract. The form must be filed at least one month before the change takes place. In the case of relocation, the form must be filed only if the employee will work abroad for at least 3 months.
Our accounting firm in Singapore can file all required documents with IIRAS in due time in order to avoid penalties.
Amounts to pay as payroll contributions in Singapore
From a taxation point of view, it should be noted that:
the first 20,000 SGD earned as a salary are not taxed in Singapore;
- employees are required to contribute to the social security scheme with 20% of their monthly income;
- the contribution of employers is set at 17% of the monthly salary of an employee;
- the employer must issue 12 paychecks per year.
It is also worth noting that foreign employees are not required to make social security contributions in Singapore.
Payroll services in Singapore
According to the Singapore legislation, a company set up here has several options for performing the payroll procedures. Some of the most representative payroll services provided by our Singapore accountants refer to the following:
– gathering information about the wages that have to be paid to the employees;
– payroll activities;
– centralization of wages and taxes related to salaries;
– delivering the payslips;
– reporting to the management of the company;
– consultancy dedicated to the employees on matters related to the salaries;
– registration with the local taxation authorities.
An important aspect, which can be further explained by our accounting firm in Singapore, is that companies with more than 15 employees are required to file employee’s income information on the online platform available at Income Revenue Authority of Singapore (IRAS), no later than 1st of March. Failure to comply with the requirements for salary payments and the other bonuses or incentives the employee is entitled to can result in fines and, in some cases, imprisonment. Working with an accounting firm in Singapore can help employers avoid these unwanted effects of non-compliance with the payroll requirements.
Payroll contributions in Singapore
Clients interested in payroll in Singapore should know that both employees and employers in Singapore are required to pay contributions to certain funds. Singapore residents working within a company are required to contribute to the Central Provident Fund (CPF) according to the rates provided by the CPF Board. CPF wages in Singapore are classified as ordinary and additional wages. The ordinary wages are represented by salaries alone, while the additional wages are represented by other bonuses, incentives or allowances. The amount of money withheld for the CPF starts at a minimum wage of 5,000 SGD.
Singapore companies are required to contribute to the Skills Development Levy for all their employees, no matter if they are locals or foreigners, or if they have a part-time or full-time work contract. Any amount resulting from the Levy is transformed into grants for employers and may be used for employee training. Singapore companies employing foreign individuals with S permits are also applied a Foreign Workers Levy by the Ministry of Manpower.
You can also watch the video on our payroll services in Singapore:
Payroll administration services for companies in Singapore
Among the services provided by our accounting firm in Singapore there is payroll administration from the beginning of the activities, which refer to the setup of the corporate bank account from which all payments will be made. Also, representation with the Singapore financial authorities is also offered in order to have all formalities in place from the beginning. Later, all relations with these authorities will be handled by the accountant representing your company.
We can also advise on various employment-related matters, such as the creation of compensation and benefit schemes for employees. You can also rely on us for assistance in the payroll of foreign employees and guidance on the provisions of the Employment Act.
Also, if you have any questions about our accounting services in Singapore, do not hesitate to write to us.
Payroll – a process that needs to be handled monthly
Payroll is one of the services that require a lot of attention as it needs to be managed on a monthly basis. Salaries, overtime, sick leave as well as vacations must be verified and considered when administering the payroll. Also, the fact that each employee has its own salary and benefits, can make it quite difficult for an accountant to handle such a large volume of work. This is where an outside accounting firm can be of help.
With the help of our payroll services in Singapore, our accountants will pay attention to all the details and specifications of each employee by handling the monthly payroll. Also, ensuring all documents associated with this task will be filed on time, thus removing the risk of being subject to fines imposed by the local authorities.
Through our monthly payroll services, your company will benefit from accurate and updated data input into the accounting system, and the issuance of the payroll statement and generation of paychecks.
Our Singapore accountants will also handle the creation of all payroll reports, as well as the preparation of annual statements related to employees’ salaries and employer’s contributions with the purpose of obtaining various benefits.
Also, if you need audit services in Singapore, we are at your service with tailored assistance in such matters.
Statutory payroll reporting requirements in Singapore
Starting with 2017, the Singapore Inland Revenue Authority requires employers to file electronic employment income statements. This requirement is available for companies with at least 10 employees. The statements must be filed by the 1st of March every year.
Companies with foreign employees are also required to obtain tax clearance which implies filing Form IR21 one month before the worker leaves the company temporarily or permanently. This requirement is also in place for foreign employees relocated to posts in other countries.
Payroll is one of the most sensitive and time-consuming tasks in the accounting department, and if you need assistance, our accounting firm in Singapore is at your service.
Why choose an accounting firm in Singapore for payroll services?
Payroll implies handling a large volume of documents, thus imposing a company to create an entire department to respect all provisions of the law. This is where an accounting firm in Singapore can be of help as it has the necessary infrastructure to take over or set up from scratch the payroll in a business without going through the additional procedures.
Our accountants in Singapore will make sure all employment contracts are duly recorded, all monthly paychecks are issued on time, all salaries are prepared in accordance with the status of the employee in the respective month, as well as the filing of documents with the IRAS in due time.
If you need further information on the payroll in Singapore, please contact our accounting firm, which can provide you with assistance on this matter. We can also help you in other accounting matters, such as GST registration in Singapore or performing an audit for your company.