BoardRoom People Expertise: Payroll Client Story

Payroll Expertise

BoardRoom People Expertise: Payroll Client Story

Client Profile

The Client is a multinational company that owns some of the world’s most iconic beverage brands that are enjoyed globally.

The Asia-Pacific branches make up almost one-fifth of their operations, where BoardRoom is currently the payroll outsourcing provider for 10 countries – Singapore, Australia, Japan, Korea, China, Taiwan, Thailand, Vietnam, Indonesia and Myanmar. In total, we are responsible for 100% of their APAC workforce, which totals 1687 employees.

Payroll Challenges

One of the challenges MNCs face when expanding or maintaining payroll operations within Asia-Pacific is the lack of understanding between subtle nuances across labour governance frameworks in the region.

About BoardRoom

17
Countries

We provide Payroll Outsourcing services across 17 countries, including Singapore, Malaysia, Australia, Hong Kong & Mainland China

24,000
employees

We take care of the payrolls of almost 24,000 employees across Asia Pacific

100%
first-time accuracy

100% first-time accuracy for payroll processing

01 Ensuring Compliance to Latest Payroll Regulations

With its diverse cultural landscape, Asia-Pacific is well-known for its intricate payroll needs that often require specialised knowledge. Payroll regulations change frequently, which can prove challenging for HR teams to keep track of, especially if they’re unfamiliar with the country’s labour laws. This lack of knowledge can negatively impact companies through payroll fines and dissatisfied employees that experience payroll miscalculations.

This is especially challenging for larger companies due to their diverse employee payroll profile which requires an in-depth knowledge of the different payroll calculations and deductions for each employee. As a result, some HR teams in MNCs can struggle to ensure payroll compliance while also performing administratively heavy tasks such as checking and dispersing wages.

02 Impact on Productivity

When operating across multiple countries, payroll processing can often be done in siloes by individual payroll teams resulting in a lack of standardization across processes and workflow. Moreover, as companies expand into new markets, it can be challenging for the HR management to maintain oversight with every country and or states unique legal and social landscape. This can reduce productivity of HR teams as more effort is required to check errors and ensure accuracy.

Companies with rapid expansion plans might find it hard to build their HR administrative operations within the quick timeframe required to meet growth ambitions. The Client recognised this fact and identified the need for an experienced regional payroll outsourcing partner who could support their growth across Asia-Pacific.

The Solution

With the above challenges in mind, BoardRoom focused on how we could streamline their payroll operations. With our expertise in processing payroll for large multi-national companies across the Asia-pacific region, we support them as they continue to grow.

01 Ready Access to Regulatory Advice

The first step was ensuring that they could access the depth of regional knowledge and expertise that the BoardRoom team possesses. Companies spanning multiple jurisdictions require timely guidance on regulatory updates or necessary deductions, which BoardRoom provides. From advice on ad-hoc bonus payouts and the deductions required or what reliefs for payroll-related taxes that the company can qualify for, BoardRoom has the expertise to advise accordingly. In addition, our team’s experience and expertise enables us to analyse existing HR frameworks and optimize processes for the best payroll performance.

02 Standardised Framework

Next, we looked into centralizing standard payroll operations across the APAC branches, meaning they were able to shift away from siloed payroll processing. Through analysis of existing structures, BoardRoom made informed recommendations to assist in streamlining of processes. This helped boost efficiency of their regional payroll processing and provide more control and foresight for planning.

Capitalise on BoardRoom’s Asia-Pacific payroll experience today

As a global company, payroll compliance is challenging to maintain consistently across the APAC region. That’s why picking the right payroll outsourcing partner is essential to keeping your payroll processing as compliant as possible. A reliable partner like BoardRoom will be able to:

  • Guide you on specific local payroll advice across the region
  • Advise you on regulatory concerns and relevant updates
  • Help you standardize processes across the region

Are you interested in engaging our expertise to optimize your regional payroll processing? Reach out to us to discuss in greater detail how you can capitalise on our experienced regional payroll experts.

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How to Start a Business in Singapore

how to start a business in Singapore

How to Start a Business in Singapore

How to Start a Business in Singapore

Looking to start a business in Singapore? You’re not alone.

Singapore’s thriving business environment attracts companies from around the world, and it’s easy to see why when the country is:

  • consistently rated by the World Bank as the best country in Asia to do business and the second-best nation in the world to do business;
  • ranked first in the world for political and operational stability in the Global Innovation Index 2020; and
  • ranked first in the Asia Pacific (APAC) region and fifth in the world for economic competitiveness by the IMD World Competitiveness Yearbook 2021.

Expanding into a new international market is exciting for any business, but it also presents its own set of significant challenges. For many executives, the first hurdle is understanding how the company formation regulations and processes work in the new jurisdiction.

 Our guide below gives you an overview of everything you need to know about how to start a business in Singapore.

Singapore Market Profile

Office rental pricing: Average monthly rent for grade A office space in Singapore was $SGD 9.90 per square foot for the second quarter of 2021. 

Average office space density: 10m2 per person 

Fixed internet download speed: 256.03 megabits per second in July 2021

Mobile internet download speed: 85.93 megabits per second in July 2021

Gross Domestic Product US$ bn: 340

Population (million): 5.70

Official languages: there are four official languages spoken in Singapore, including:

  • English;
  • Chinese;
  • Malay; and
  • Tamil
    Establish your startup in Singapore

    Benefits of Setting up a Company in Singapore

    As one of the largest business centres in Asia, Singapore offers many benefits to companies looking to establish a presence in the region. Here are seven benefits of why setting up a company in Singapore is a smart choice for businesses:

    Favourable Corporate Tax Structure

    Singapore’s corporate tax is set at a competitive rate of 17% on chargeable income, whether a company is local or foreign. To further support businesses, the government offers several corporate tax relief schemes.

    Tax Exemption Scheme for New Start-up Companies

    Qualifying companies are given the following tax exemptions for the first three consecutive years of assessment (YAs) where the YA falls in:

    YA 2020 onwards
    • 75% exemption on the first $100,000 of normal chargeable income; and
    • A further 50% exemption on the next $100,000 of normal chargeable income.
    YA 2010–2019
    • Full exemption on the first $100,000 of normal chargeable income; and
    • A further 50% exemption on the next $200,000 of normal chargeable income

    Partial Tax Exemption for All Companies

    All companies, including companies limited by guarantee, can enjoy the following tax exemption:

    YA 2020 onwards
    • 75% exemption on the first $10,000 of normal chargeable income; and
    • A further 50% exemption on the next $190,000 of normal chargeable income.
    YA 2010–2019
    • 75% tax exemption on the first $10,000 of normal chargeable income; and
    • A further 50% exemption on the next $290,000 of normal chargeable income.

    Corporate Income Tax Rebate

    Given to all companies:

    YA 2020 onwards
    • 75% exemption on the first $10,000 of normal chargeable income; and
    • A further 50% exemption on the next $190,000 of normal chargeable income.
    YA 2013–2019

    Attractive Corporate Tax Incentives

    Singapore offers a range of tax incentives designed to support business growth and innovation, making it an attractive destination for setting up a business.

    These are some of the key incentive schemes:

    Pioneer Certificate Incentive

    Granted to companies that locate “pioneering” activities that are not carried out in Singapore at the time. It is designed to attract companies in high-tech, innovative, or strategically important industries that can contribute significantly to Singapore’s economic development, helping to establish Singapore as a regional hub for advanced industries.


    Development and Expansion Incentive

    Encourages companies to develop capabilities and/or expand their activities in Singapore. The concessionary tax rate for this incentive is either 5% or 10%, depending on the size of economic investments these companies commit to bringing into Singapore.


    Enterprise Innovation Scheme (EIS)

    Effective from YA 2024 to YA 2028, is designed to help businesses which are focused on research, innovation, and digital transformation. The EIS provides enhanced tax deductions or cash payouts for qualifying expenditures in areas such as R&D, intellectual property registration, and training in innovation.

    Singapore also offers Foreign Income Tax Reliefs and Exemptions, where it does not tax capital gains on the sale of fixed assets or foreign exchange on capital transactions. However, companies (irrespective of tax residency) operating in Singapore are taxed on income sourced in the country and foreign income when remitted to and received in Singapore.

    According to the Inland Revenue Authority of Singapore (IRAS),companies that are Singapore tax residents can enjoy tax breaks on foreign income as follows:

    • Tax Exemption or Reduction: Upfront exemption or reduction in tax imposed on the foreign income when foreign income is derived in a jurisdiction that has an Avoidance of Double Taxation Agreement (DTA) with Singapore;
    • Specified Foreign Income Exemptions: Tax exemption of specified foreign income such as foreign-sourced dividends, branch profits and service income; and
    • Foreign tax credit: Credit for the taxes paid in the foreign jurisdiction against the Singapore tax payable on the same income.

    Generous Grants for Funding

    Supported by the government, the Enterprise Development Grant (EDG) and Productivity Solutions Grant are the initiatives designed to support local businesses:

    Enterprise Development Grant (EDG)

    This provides funding to cover up to 80% of the qualifying project costs, including consultancy fees, budgets for equipment and software and internal manpower costs, for projects that drive innovation, productivity and market success. To apply for the grant, the business must be registered and operate in Singapore with 30% of the local equity owned by Singaporeans or Singapore’s permanent residents. It should also demonstrate its capability to start and finish the project and have a minimum of SGD 400,000 turnover.


    Productivity Solutions Grants (PSG)

    This grant aims to cover the costs of IT solutions, equipment and consultancy services for SMEs, enabling them to adopt technology to improve their productivity. It offers up to 50% of the qualifying costs for each company. Similar to EDG, only registered and operating businesses in Singapore can apply for the grant. However, the project must involve the adoption of technology to be eligible.

    Whether you are setting up a business or have been operating an SME company for more than years, the government in Singapore provides many grant schemes in support of startups and companies across sectors. You can refer to GoBusiness Singapore for the full list of grants available.

    Enterprise Financing Scheme for SMEs and Startups

    Enterprise Financing Scheme (EFS) is offered in Singapore to assist SMEs and startups in securing financing for their business operations. This government-backed scheme provides financing to eligible SMEs for various business purposes, including Green Loans for sustainable projects, SME Working Capital Loans for investments in fixed assets, and Venture Debt Loans in support of innovative projects by enterprises.

    To be eligible for the scheme, the business must meet the following requirements:

    • Registered and physically located in Singapore;
    • 30% of the local equity must be directly or indirectly held by Singaporeans or Singapore’s permanent residents;
    • Group annual sales turnover should not exceed SGD 500,000,000.

    Highly Competitive Economy

    Singapore is one of the most competitive economies in the world, ranking first in the Asia Pacific (APAC) region and fifth in the world for economic competitiveness by the IMD World Competitiveness Yearbook 2021.

    No foreign ownership restrictions

    100% of the shares of incorporated companies in Singapore can be owned by foreigners or foreign companies (except for broadcasting and domestic news media).

    There are no export tariffs and foreign exchange controls in Singapore, but there are import tariffs on:

    • intoxicating liquors;
    • tobacco products;
    • motor vehicles;
    • petroleum products; and
    • biodiesel blends.

    Bilingual Business Communication

    As Singapore’s primary business and administrative language, English is widely used in Singapore, making it easier for foreign investors to establish companies within the region. Additionally, Singapore’s bilingual policy means that many professionals are fluent in both English and Mandarin, which is particularly advantageous for companies looking to tap into the vast Chinese-speaking market in Asia. This bilingual environment ensures that businesses can effectively engage with a diverse range of clients, partners, and stakeholders, bridging cultural and linguistic gaps while enhancing regional business operations.

    A Step-By-Step Guide to Start a Business in Singapore

    Here is our step-by-step guide for how to start and register a business in Singapore:

    Choose a Business Structure Type

    The most common types of business structures operating in Singapore are:

    • Sole Proprietorship: This is the simplest form of business structure, owned and operated by a single individual. It’s easy to set up and manage, with minimal legal formalities. However, the owner is personally liable for all debts and obligations of the business, meaning their personal assets are susceptible to risks.
    • Partnership: A partnership is a business structure formed by two or more individuals who agree to share profits and losses. There are two main partnership types — general and limited. In a general partnership, all partners have equal rights and responsibilities. In a limited partnership, there is at least one general partner with unlimited liability and one or more limited partners with limited liability.
    • Limited Liability Partnership (LLP): An LLP is a hybrid business structure that combines the characteristics of a partnership and a company. Similar to a company, it offers limited liability for all partners. However, unlike a company, an LLP is not a separate legal entity. While this protects partners’ personal assets from business debts, they remain personally liable for their own actions and liabilities, as well as for the actions of fellow partners within the scope of the LLP’s business.
    • Private Limited Company: A private limited company is a separate legal entity from its owners. Shareholders have limited liability, meaning their personal assets are generally protected from business debts. Private companies are typically owned by a small group of individuals, allowing up to 50 shareholders.
    • Public Limited Company: A public limited company is a separate legal entity that the public can own. Shares of the company can be traded on a stock exchange. Shareholders have limited liability, similar to a private limited company. Unlike private limited companies, this type of business structure must have a minimum of 50 shareholders.
    • Foreign Company Office: Established outside of Singapore, foreign companies can register in the country to start either a representative office, which is not for business purposes, or a branch office. Neither option creates a separate legal entity, however, so all liability extends to the parent company.

    Give Your Business a Name

    Your company must avoid choosing a name that is:

    • the same as an existing business name already approved by the Accounting and Corporate Regulatory Authority (ACRA);
    • undesirable names that are vulgar, obscene, or offensive; and
    • prohibited by order of the Minister for Finance.

    You can search the online business and company name register in Singapore, BizFile, to check if your preferred name is available.

    Set up Your Company Structure

    If you are setting up a company, you need to determine the structure of your company per the following requirements:

    • Directors: a minimum of at least one person. One director needs to be a natural person (i. an individual). Directors must be aged 18 years or older and be either:
    • a Singaporean citizen; or
    • permanent resident; or
    • a person with an Employment Pass; or
    • a person with an Entrepreneur Pass (EntrePass).

    BoardRoom offers a nominee director service to help you meet the local director requirements in Singapore.

    • Shareholders: a minimum of at least one shareholder. 100% of shares can be foreign-owned.
    • Company secretary: a sole director must not act as the company secretary. To start and register a company in Singapore, you must appoint a natural person who lives in Singapore as a company secretary. Companies like BoardRoom can provide expert company secretarial services so that your company can meet all of its statutory obligations in Singapore.
    • Share capital: the minimum issued capital must be at least $SGD1.
    • Registered address: must be a physical address in Singapore, not a P.O. Box. If your business does not yet have local office space, professional service firms like BoardRoom can help your company by setting up a registered office location.

    Submit Company Registration Application

    Once you have decided on a company name and the designated company share structure, you can now proceed to the company registration, officially setting up your own business. If you are a Singaporean or a permanent resident of Singapore, you can apply online via the ACRA’s BizFile+ Portal. Simply use your SingPass, which is digital identification designed specifically for the local citizens, to access the platform. Once you log in, please start the registration and provide the following documents and information to complete the application:

    • Approved company name from ACRA
    • Company constitution (Articles of Association)
    • Identification and residential address of shareholders and directors
    • Signed consent from each director
    • Registered office address in Singapore
    • SSIC code for business activities

    It generally takes only a day to approve the application. Please ensure you prepare all the necessary documents in advance.

    Receive the Business Registration Number

    After the application is approved, the ACRA will issue you a Business Registration Number (BRN). This number, also known as the Unique Entity Number (UEN) in Singapore, is an important legal identifier for the business it is assigned to, as it is required for corporate tax return filing, industry-specific permits, licences, and various transactions with the government. Even if the business details of the company are modified, its BRN will remain unchanged.

    Having a BRN streamlines the compliance processes by eliminating the need for multiple IDs or applications to interact with or fulfil regulatory requirements across various government agency platforms.

    Make Other Permit and Business Licence Applications (If Applicable)

    Depending on the type of business you operate, you may need to apply for other permits and business licences. Find more information about permits and licences here.

    Start a Business as a Foreigner in Singapore

    A foreigner looking to start a business in Singapore that is venture-backed or owns innovative technologies can apply for an EntrePass. This will allow them to submit their application online through BizFile. Additionally, they must also meet the following requirements when setting up their company in Singapore:

    • Appoint at least one director who is a local resident
    • Appoint at least one shareholder
    • Provide a physical address in Singapore as the registered office

    Foreigners without an EntrePass should consider engaging with the services of a registered filing agent, such as BoardRoom.

    Additional Considerations When Setting up a business in Singapore

    During the process of setting up a company in Singapore, it’s also imperative that you pay attention to certain business exemptions and taxes that you need to pay.

    Exemptions from Company Registration

    There are certain forms of businesses that are exempt from undergoing ACRA’s company registration, which include:

    • Sole Proprietorships and Partnerships: Businesses operating solely under the full names of individuals or partners can be exempt from registration. However, if any additional descriptive terms are used in the business name, registration is required.
    • Tax-Exempt Entities: Certain entities, such as specific institutions, authorities, and funds, may be exempt from registration if their income is tax-exempt under the Income Tax Act.
    • Registered Societies, Organisations, and Trade Unions: Societies, organisations, and trade unions registered under their respective laws are generally exempt from business registration.
    • Dormant Companies and Exempt Private Companies: While dormant companies and exempt private companies (EPCs) may enjoy certain exemptions, they still need to be registered and comply with specific requirements, such as maintaining accounting records and preparing financial statements.

    Corporate Income Tax Filing

    For businesses registered under the Companies Act, corporate income tax return filing is mandatory. Thus, when you are setting up a business in Singapore, you need to understand such obligations to ensure future compliance with regulations.

    The entire tax filing process is done through the online portal of the Inland Revenue Authority of Singapore (IRAS), involving 2 key steps:

    Estimated Chargeable Income (ECI): Companies must submit an ECI within three months from the end of their financial year. However, certain exemptions apply if a company’s annual revenue is below a specified threshold and if ECI is zero.

    Tax Return Filing: Companies must file the appropriate tax return form (Form C-S, Form C-S (Lite), or Form C) based on their eligibility and complexity of returns. The deadlines for filing these documents are typically within three months of your financial year-end for ECI and November 30th of the Year of Assessment for the tax return.

    As sole proprietors and partnerships are not classified as companies, they have separate tax filing requirements, which can be viewed in detail on the IRAS’s website.

    How Can BoardRoom Ensure You Successfully Start a Business in Singapore?

    While it can be complex, setting up a business in Singapore as a foreigner doesn’t have to be difficult. Our team of company incorporation experts at BoardRoom can guide you through every step of the incorporation journey to make it as smooth and seamless as possible.

    Not only can our team help you incorporate with ease, but we can also take care of your company secretarial needs.

    Speak to one of our specialists today to get started in setting up a business in Singapore.

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    Payroll Compliance: Keeping Abreast of the Evolving APAC Landscape for Global Organisations

    Payroll Compliance APAC

    Payroll Compliance: Keeping Abreast of the Evolving APAC Landscape for Global Organisations

    Payroll Compliance: Keeping Abreast of the Evolving APAC Landscape for Global Organisations

    Compliance is more than just a box-ticking exercise – it is the building block of credibility and reliability for organisations, particularly companies with a multinational presence who are subject to greater scrutiny.

    Our Payroll Associate Director, Prem, deep dives into the various strategies you can implement today that mitigate your risk of non-compliance when processing payroll across multiple jurisdictions.

    Key takeaways from the video includes:

    • What questions organisations should ask when assessing payroll outsourcing vendors to determine they are keeping up with changing regulatory landscapes.
    • How global organisations can stay up to date with evolving payroll needs.
    • Which countries in APAC have the most complicated employment requirements.

    Click here to play the video

    More about Prem

    Prem V. Kumar has over a decade of experience in payroll management across APAC.

    His expertise lies in organisation and he has a gift for breaking down the specific talents and roles needed to optimise the efficiency of payroll processing. As the Regional Payroll Associate Director, he is responsible for ensuring a seamless regional payroll processing experience for clients who operate across several jurisdictions.

    Some of the key projects that Prem was responsible for includes the end to end overseeing of a regional payroll project of over 12,000 headcounts. Today, he has cultivated a well-rounded regional payroll team who are responsible for some of our bigger clients.

    Are you interested in learning more about navigating through the complex payroll requirements in the APAC region? Reach out to our experts today to learn more about our payroll services.

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    Payroll Process: Setting your HR Team Up for Success

    Payroll processing

    Payroll Process: Setting your HR Team Up for Success

    Payroll Process: Setting your HR Team Up for Success

    Numerous studies have proven that a continuous delay in employee’s salary distribution can impact their job satisfaction. That’s why timely payments are vital in maintaining good workforce morale and can decrease turnover rates in many organisations.

    However, it’s no easy feat to keep payroll running efficiently whilst ensuring that precision is not sacrificed for prompt salary disbursements. While achieving a zero margin of error is not possible, there are still some ways that payroll processes can be enhanced to reduce the likelihood of miscalculations.

    Watch the video below where our payroll expert, Prem, Regional Payroll Associate Director, shares with us tips on how organisations can process their payroll with a low margin of error.

    Click here to play video

    More about Prem

    Prem V. Kumar has over a decade of experience in payroll management across APAC.

    His expertise lies in organisation and he has a gift for breaking down the specific talents and roles needed to optimise the efficiency of payroll processing. As the Regional Payroll Associate Director, he is responsible for ensuring a seamless regional payroll processing experience for clients who operate across several jurisdictions.

    Some of the key projects that Prem was responsible for includes the end to end overseeing of a regional payroll project of over 12,000 headcounts. Today, he has cultivated a well-rounded regional payroll team who are responsible for some of our bigger clients.

    Speak to our payroll experts today to find out how BoardRoom can enhance your payroll processing.

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    Payroll process steps in Singapore: your questions answered

    payroll process steps

    Payroll process steps in Singapore: your questions answered

    The payroll process steps in Singapore: your questions answered

    Small payroll errors can have massive repercussions in Singapore, including expensive fines, reputational damage and employee dissatisfaction. That’s why knowing the payroll process steps and understanding payroll compliance obligations is critical to operating successfully in the country.

    To help your company stay compliant, our team of payroll experts have answered your most pressing payroll process questions.

    1. What information do I need for payroll in Singapore?

    To set up employees on your company’s payroll in Singapore, you need their:

    • full name;
    • date of birth;
    • date hired;
    • immigration status;
    • identification number;
    • current job start date;
    • pay frequency;
    • pay currency;
    • pay amount;
    • self-help group contribution status;
    • payment method; and
    • bank account details.

    2. What are the working conditions and wage requirements in Singapore?

    • Working hours: employees in Singapore work either:
      • a nine-hour workday with an average working week of no longer than 44 hours, and (most commonly) two days off per week; or
      • an eight-hour workday, working six days a week.
    • Pay cycles: salaries in Singapore are typically paid monthly.
    • Minimum wages: there is no minimum wage in Singapore. Salaries are negotiated and mutually agreed upon by employees and employers.
    • Overtime, rest day and holiday pay rates: overtime is paid at 1.5 times the employee’s hourly basic rate of pay. This rate is capped at the salary level of $2,600 or an hourly rate of $13.60 (excluding manual labourers).

    Employees can work up to 72 hours of overtime per month. Rest days and public holiday pay rates vary depending on several factors outlined here.

     

    wage requirement in Singapore

    3. What are the holiday and leave requirements for payroll?

    • Paid holidays: there are 11 gazetted public holidays per year.
    • Annual leave entitlements: employees are entitled to between 7-14 days of paid annual leave, depending on their length of service with the company.
    • Sick leave entitlements: employees are entitled to between 5-14 days of paid outpatient sick leave and 15-60 days of paid hospitalisation sick leave, depending on their length of service with the company.
    • Maternity leave entitlements: new mothers are entitled to 16 weeks of paid maternity leave if:
      • their child is a Singaporean citizen;
      • they have previously worked for the employer for three continuous months before the birth; and
      • they have given their employer at least one week’s notice before going on maternity leave.

    Employers can submit reimbursement claims to the government under the Government-Paid Maternity Leave Scheme.

    • Paternity leave: government-paid paternity leave of two weeks is available for employees if:
      • their child is a Singaporean citizen;
      • they have previously worked for the employer for three continuous months before the birth; and
      • they are or had been lawfully married to the child’s mother between conception and birth.
    • Childcare leave entitlements: parents of Singaporean citizens are entitled to six days of paid childcare leave per year. Parents of non-Singaporean citizens are entitled to up to two days of paid childcare leave per year. However, to be eligible:
      • their youngest child must be under seven years of age; and
      • the parents must have been working with their employer for at least three continuous months.

    Employers will pay the first three days, and the government pays for the remaining three days.

    • Unpaid infant care leave entitlements: parents of Singaporean citizens are entitled to six days of unpaid infant care leave per year. However, to be eligible:
      • their child must be under two years of age; and
      • the parents must have been working with their employer for at least three continuous months.
    • Other non-compulsory leave types: Employees can also apply for the following optional leave types. They are not statutory requirements but subject to employer approval:
      • marriage leave: typically three days paid leave per year
      • compassionate leave: typically two to three days of paid leave per year
      • birthday leave: one day of paid leave per year
      • exam leave: typically two days of leave per subject
      • eldercare leave: at the discretion of employers. Public service agencies currently offer two days of paid parental care leave per year.

    4. What social security and statutory contributions must employers make?

    • Central Provident Fund (CPF): employers and most employees (Singaporean citizens or permanent residents only) must contribute to the CPF retirement benefits scheme.

    The CPF contribution rate for employees varies depending on their monthly salary, whereas the employer contribution rate for employees aged up to 55 years is 17%.

    • Self-Help Group (SHG) Funds: these are voluntary employee contributions to less privileged and low-income households of the communities that each employee is a part of. There are four SHG funds:
      • Chinese Development Assistance Council Fund (CDAC);
      • Eurasian Community Fund (ECF);
      • Mosque Building and Mendaki Fund (MBMF); and
      • Singapore Indian Development Association Fund (SINDA).

    Employers deduct the SHG contributions from employee wages. The contribution rates vary per fund but range from $0.50–$30 per month.

    • Skills Development Levy (SDL): employers are required to contribute SDL for all their employees (irrespective of their immigration status) up to the first $4,500 of each employee’s total monthly wages.

    The levy rate for SDL is 0.25% or a minimum of $2 (for total wages of $800 or less). This supports training and workforce upgrade programs.

    • Foreign Worker Levy (FWL): this levy applies to foreign workers with a Work Permit or S Pass Holders. It does not apply to employees under Employment Pass (EP).

    The FWL rate varies depending on:

      • industry type;
      • whether the employee has a Work Permit or an S Pass;
      • employee skill level; and
      • the number of foreign workers employed within the company.

    More information on the FWL is available here.

     

    Social Security Payroll

    5. Are payslips mandatory in Singapore?

    Yes. According to the Ministry of Manpower in Singapore, “employers must issue itemised payslips to all employees covered by the Employment Act.”

    6. Is ‘13th month pay’ mandatory in Singapore?

    No. 13th month pay is not mandatory in Singapore, but it is the cultural business norm.

    7. Do all employees have to be on payroll?

    All employees covered by the Employment Act must have payslips; therefore, they must all be on payroll.

    8. Can I do payroll myself?

    Of course. However, the process is a lot easier, simpler and more accurate when you outsource payroll to a specialist provider like BoardRoom.

    9. Do employers pay taxes on payroll?

    Employers in Singapore are not required to withhold taxes from an employee’s salary. However, employers must withhold tax for foreign workers for at least one month if they cease working in Singapore, or if they leave Singapore for longer than three months.As discussed above, employers must also make social security and statutory contributions for their employees.

    In addition, many employers also offer some form of private health insurance for their employees. While this is not mandatory it is a cultural business norm in Singapore.

    Singapore Payroll

    Want expert help in processing your company’s payroll in Singapore?

    As you can see from the information above, many complexities surround the payroll process steps in Singapore. This makes it extremely challenging for companies with offices in the country to remain compliant.

    Moreover, payroll compliance regulations change frequently, so staying up to date can be complicated and time-consuming, especially if your company has a high-volume payroll.

    We can help you to create an efficient, accurate and compliant payroll process.

    Speak to our specialist team today to organise a free payroll health check and find out how to reduce payroll costs and compliance risks for your company.

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