Table of Contents
We’re here to help you on your journey to hire, manage and pay.
Employee Benefits and Deductions
In addition to salary and CPF contributions, employers in Singapore are required to provide statutory benefits to their employees. These benefits include paid leave, public holidays, and maternity and paternity leave. Additional benefits, such as medical insurance or bonuses, are typically included in employment contracts and are subject to agreement between the employer and employee.
Leave Entitlements and Paid Holidays
Employees in Singapore are entitled to various types of leave, including annual leave, sick leave, and maternity/paternity leave. The minimum statutory annual leave is seven days per year, increasing with the employee’s length of service. For example, an employee with more than 10 years of service is entitled to 14 days of paid annual leave.
Sick leave entitlements depend on the employee’s length of service and whether they are hospitalized. Employees are entitled to up to 14 days of outpatient sick leave and 60 days of hospitalization leave per year.
Singapore recognizes 11 public holidays each year. Employees who work on public holidays are entitled to an extra day’s salary or a day off in lieu.
Additional Benefits and Statutory Deductions
Employers in Singapore often provide additional benefits, such as private health insurance, transportation allowances, or flexible work arrangements, to attract and retain talent. While these benefits are not legally required, they can help employers remain competitive in the labor market.
Employers must also comply with statutory deductions, such as Skills Development Levy (SDL) and Foreign Worker Levy (FWL). SDL applies to all employees and is used to fund skills upgrading programs for workers. FWL applies to foreign workers and varies depending on the sector and type of work pass held by the employee.
When Non-Compliance May Occur
Non-compliance with payroll regulations in Singapore can lead to significant penalties, including fines, interest charges, and legal disputes. Below are some common areas where non-compliance may occur and how to avoid them:
Late Salary Payments
Failure to meet salary deadlines can lead to employee disputes and fines imposed by the Ministry of Manpower (MOM). Employers must ensure that salaries are paid on time, and that any deductions are clearly communicated to employees.
Missed CPF Contributions
Missing CPF contribution deadlines can lead to interest charges and penalties. Employers who fail to remit CPF contributions on time may also face prosecution by the CPF Board. To avoid this, employers should implement automated payroll systems that calculate contributions accurately and ensure timely submission.
Incorrect Tax Withholding
Misreporting or underreporting employee income can lead to fines from Singapore’s Inland Revenue Authority. Employers must ensure that they understand their reporting obligations and file accurate tax returns for all employees. Proper payroll software can help automate the calculation and filing process.
Non-Compliance with Benefits
Failure to provide statutory benefits, such as paid leave or CPF contributions, can result in legal claims from employees. Employers should familiarize themselves with Singapore’s employment laws and ensure that all benefits are provided as required by law.
How AYP Can Help
Managing payroll in Singapore requires expertise and attention to detail. AYP offers a range of services to help businesses comply with payroll regulations and avoid penalties.
Professional Employer Organisation (PEO) Services
With AYP’s PEO services, businesses can outsource payroll management, including salary payments, CPF contributions, and tax reporting. We take care of all employer obligations, ensuring that your business stays compliant with Singapore’s labor laws and payroll regulations.
Employer of Record (EOR) Services
As an Employer of Record, AYP assumes responsibility for your workforce in Singapore, handling payroll, statutory contributions, and compliance on your behalf. This allows businesses to focus on growth while ensuring that payroll is managed accurately and efficiently.
Payroll Outsourcing Management (POM) Services
AYP’s Payroll Outsourcing Management (POM) services provide a complete solution for managing payroll in Singapore. From calculating salaries and deductions to submitting CPF contributions and filing tax returns, we ensure that your payroll processes are compliant and efficient.
By partnering with AYP, businesses can streamline their payroll processes, reduce compliance risks, and avoid costly penalties.
