Accounting
Everything to
know about
Payrolls
What are the legal requirements?
Adherence to Employment Act
According to the Employment Act, you are required to:
- Pay salaries 7 days after the end of the salary period
- Issue itemised payslips for every payment
Central Provident Fund (CPF) Contribution
Mandatory for Singapore citizens and Permanent residentss Submit your employees’ and your CPF contributions by the 14th of the following month
Auto-Inclusion Scheme (AIS) for Income Tax Reporting
- Report their employees’ employment income to the Inland Revenue Authority of Singapore (IRAS) by 1 March every year
- Submit necessary forms like IR8A, Appendix 8A etc
Record-Keeping
Maintain accurate payroll for at least
- 2 years for local employees
- 5 years for foreign employees
According to the Employment Act, you are required to:
- Pay salaries 7 days after the end of the salary period
- Issue itemised payslips for every payment
Overtime and Holiday Pay
Pay 1.5x hourly rate for eligible employees working overtime
Leave management
Include entitlements like annual leave, sick leave, paternity leave etc.
Foreign Worker Compliance
Pay levies for workers on work permits or S passes
What happens if I don’t comply?
- If you fail to submit your employees’ CPF contributions punctually, you will be subjected to a 1.5% interest per month
- Non-Compliance would result in a fine of up to to $10,000 or imprisonment for severe cases
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Employment Act
Who does the Employment Act cover?
The employment act covers all employees, both local and foreign, working under a contract of service, except seafarers, domestic workers, statutory board employees, or civil servants.
What do I, as an employer, need to know?
Employment terms and contracts
Work hours and rest days
- A maximum of 44 work hours per week;
- An overtime rate which is 1.5x the hourly basic pay for work exceeding 44 hours per week;
- At least one rest day per week must be followed for employees who fall under the following categories:
- Workmen (doing manual labour) with a monthly salary of $4500 or less
- Employees (not workmen) who are covered by the employment act with a monthly salary of $2600 or less
Salary payment
- Pay salaries 7 days after the end of the salary period
- Issue itemised payslips for every payment
Termination of employment
Paid Annual Leave
Employees are entitled to paid annual leave after 3 months of service, and the number of days of leave increases with each year of service.
CPF contributions
CPF is a mandatory social security savings scheme that exists to meet retirement, housing and healthcare needs. CPF contributions must be paid to employees who are Singapore Citizens and Singapore Permanent Residents at current CPF contribution rates.
Here’s a table summary of the key numbers:
| Employee’s age (years) | Contribution rates from 1 January 2024 (monthly wages > $750) | ||
| By employer (% of wage) | By employee (% of wage) | Total (% of wage) | |
| ≤55 | 17 | 20 | 37 |
| Above 55 to 60 | 15 | 16 | 31 |
| Above 60 to 65 | 11.5 | 10.5 | 22 |
| Above 65 to 70 | 9 | 7.5 | 16.5 |
| Above 70 | 7.5 | 5 | 12.5 |
The contribution by the employer refers to the percentage of their employees salary that employers must pay to CPF. This is on top of their employees salary. The contributions by the employee refers to the amount deducted from their salary that goes into CPF.
What is the Auto-Inclusion Scheme (AIS)?
Am I required to participate in AIS?
- Employers with 5 or more employees
- Companies required to file the Form IR8E under the Income Tax Act
Alternatively, IRAS may just give you a notice to join AIS, regardless of how many employees you have.
What information must I report?
- Employment income
- This includes salary, bonuses, allowances, commissions, and other taxable benefits
- CPF contributions
- Other payments
- This encompasses gratuities, stock options etc
- Deductions
- Eg. donations
Forms to submit
- Form IR8A: Declaration of employee income.
- Appendix 8A: Benefits-in-kind.
- Appendix 8B: Gains from stock options and shares.
- Form IR8S: Contributions to CPF
For more specific information regarding forms to submit, click on this link.