Payroll in Singapore

Mercans is your go-to partner for top-notch payroll (Managed & SaaS) services in Singapore. Our commitment to delivering exceptional payroll outsourcing in Singapore is unwavering. With years of experience in the payroll industry, Mercans ensures accurate and compliant payroll services in Singapore, making us the preferred choice for businesses of all sizes. Trust Mercans for timely and accurate payroll transactions, along with the convenience of multi-currency payments in the Singaporean market. As your dedicated local payroll provider in Singapore, we boast a team of in-country payroll specialists with deep knowledge of local laws, offering comprehensive support for a seamless payroll experience tailored to your business needs.

Everything you need to know before running payroll in Singapore

Working Hours and Overtime

In Singapore, regulations governing working hours are crucial aspects of employment. According to the law, working hours encompass the time dedicated to performing tasks and the duration employees must be present at the workplace, ready for duty, even if not actively engaged in work. The stipulated standard working hours must not surpass 8 hours per day and 40 hours per week.

For individuals employed five days or less per week, the maximum daily working hours extend to nine, totaling 44 hours weekly. Conversely, for those with a schedule spanning more than five days, the limit is set at eight hours per day or 44 hours weekly.

Moreover, it’s imperative to note that employees are not permitted to exceed 12 hours of work in a single day, and they are entitled to one rest day per week. Additionally, employees should not be subjected to continuous work for more than six hours without a break. However, if an uninterrupted work period of up to eight hours is necessitated, a minimum 45-minute break for mealtime should be provided.

As a premier payroll provider and payroll company in Singapore, staying abreast of such regulations is fundamental to ensuring compliance and facilitating smooth operations for businesses and their workforce.

Minimum Wages

Singapore does not have a minimum wage policy, however, there are a few exceptions (i.e. cleaners, food and beverage servers).

13th Month Salary

The Additional Wage Supplement (AWS), commonly referred to as the “13th month payment,” represents a singular annual disbursement in addition to an employee’s total yearly salary.

AWS is voluntary and contingent upon the conditions stipulated in the employment contract or collective agreement. Employers are urged to consider offering AWS as a means of acknowledging their employees’ contributions to the company’s achievements.

Payroll Cycle

Employees typically receive their wages on a monthly basis, although payment intervals can be shorter if necessary. Regarding termination, the employee’s salary settlement is as follows:

  • If the employee resigns and completes the notice period, payment is made on the final day of employment.
  • In cases where the employee resigns abruptly without serving notice, and no notice period is observed within 7 days of the last working day, compensation must be provided.
  • For terminations due to misconduct, payment is typically rendered on the last day of employment. If immediate payment is not feasible, settlement must occur within 3 business days.
  • In instances where the employer terminates the employment contract, compensation is due on the last day of employment. If immediate payment is impractical, the employee must be compensated within 3 business days.

Company Formation in Singapore

Singapore stands out as one of the most favorable locations worldwide to launch a company, securing the 2nd spot in the World Bank’s Ease of Doing Business ranking. It consistently leads international surveys, boasting impeccable scores in crucial indicators such as political stability, economic competitiveness, and regulatory transparency, making it an ideal environment for business establishment and growth.

Facilitating this process, the Accounting & Corporate Regulatory Authority (ACRA) in Singapore has fully computerized company registration procedures, ensuring swift incorporation within 1-2 days.

Beyond mere registration, Singapore offers diverse business entity options tailored to various needs:

  • Limited Liability Company (LLC): A separate legal entity with limited shareholder liability.
  • Private Limited Company (PLC): Shares held privately, limited to 50 shareholders.
  • Exempt Private Company (EPC): Exempt from statutory annual audit under specific conditions.
  • Public Company: Shares available to the general public, offering improved access to capital.
  • Sole Proprietorship: Simplest form suitable for small businesses, with the owner bearing unlimited liability.
  • Partnerships: General or limited partnerships, with varying degrees of liability and ownership.
  • Limited Liability Partnerships (LLP): Integrating features of partnerships and companies, with liability limited to contributions.
  • Branch Office of Foreign Company: Allows foreign companies to conduct business in Singapore.
  • Representative Office (RO): Undertakes promotional activities for foreign parent companies.
  • Operational Headquarters (HQ): Encourages companies to manage regional and global operations from Singapore.

Moreover, Singapore’s flexible financial regulations require only a minimal paid-up capital, starting from SGD$1, facilitating business establishment with ease and affordability. Whether aiming for local or global expansion, Singapore’s business ecosystem offers ample opportunities for success.

Singapore Company Registration in 5 Easy Steps

1Understand and review Singapore's company registration requirements
2Determine corporate structure and collect supporting documents
3Confirm availability of desired company name
4Sign incorporation documents
5Incorporate company and open its bank account

Key Requirements for Singapore Company Registration

ShareholdersAt least 1 shareholder, maximum 50; 100% foreign shareholding allowed
CapitalMinimum SGD 1 capital required
DirectorsAt least 1 resident director required; corporate directors not permitted
Company SecretaryMust be a resident of Singapore
AddressRegistered address in Singapore required

Next Steps

  • Get Started to begin your Singapore company registration process.
  • View FAQs for common queries on company registration in Singapore.

Payroll Compliance in Singapore

Statutory Filings and Contributions

In Singapore, employers are obligated to submit the following statutory filings. Mercans assists you in completing the necessary filings as per the Singapore local laws.

Statutory BodyReport/DeclarationFiling FrequencyDue datesPurpose
Central Provident Fund Board (CPF)Mandatory social security savings scheme funded by contributions from employers and employees.MonthlyBy the 14th of the subsequent monthReporting of the monthly central provident fund (CPF) , Skills Development Levy (SDL) and Fund Contribution to CPF Board. The CPF is a key pillar of Singapore's social security system, and serves to meet our retirement, housing and healthcare needs.
Inland Revenue Authority of Singapore (IRAS)Form IR8A, Appendix 8A, Appendix 8B, IR8SAnnually1st Mar each yearReporting employee income earned for the year
Ministry of Manpower (MOM)Foreign Worker Levy (FWL)MonthlyBy the 17th of the subsequent monthCommonly known as “levy”, is a pricing mechanism to regulate the number of foreigners in Singapore

Payroll Taxes in Singapore

Social Security in Singapore

The Central Provident Fund (CPF) is a compulsory savings scheme funded by contributions from both employers and employees. It plays a crucial role in Singapore’s social security system, aiming to address retirement, housing, and healthcare needs.

Individual CPF funds are divided into three categories

  • Ordinary Account: Used for home purchases, investments, and education.
  • Special Account: Reserved for retirement purposes, with exceptions for certain financial products.
  • Medisave Account: Dedicated to covering medical expenses and approved insurance.

Employer contributions range from 7.5% to 17%, while employee contributions range from 5% to 20%. CPF funds earn risk-free interest, with rates varying by account and age group.

Key CPF provisions include

  • The CPF Act mandates savings and pension provisions for Singaporeans and permanent residents.
  • The monthly salary ceiling will gradually increase from September 2023 to January 2026.
  • CPF contributions can be submitted via the CPF EZPay system, which automatically calculates contributions.
  • Retirement and re-employment ages are set to increase gradually, with businesses having the option to raise these ages earlier.
  • Retirement payouts are provided through schemes like the Retirement Sum Scheme (RSS) and CPF LIFE.
  • Tax relief is available for voluntary top-ups, subject to certain caps.
  • CPF funds are disbursed to beneficiaries upon the member’s death, with a six-month retention period for unclaimed funds.

CPF serves as a cornerstone of Singapore’s financial landscape, ensuring financial security and stability for its citizens and residents.

Personal Income Taxes in Singapore

Individuals, regardless of their residency status or citizenship, are subject to income tax on income earned or derived within Singapore. However, foreign-sourced income received by individuals (excluding partners of Singapore partnerships) while in Singapore is generally exempt from taxation. Certain conditions must be met for partners of partnerships to qualify for this exemption.

Taxable income typically encompasses:

  • Profits from trade, business, or professional activities
  • Earnings from employment within Singapore
  • Dividends, interest, or discounts
  • Pensions, charges, or annuities
  • Rental income, royalties, premiums, and other property-related profits
  • Any gains or profits of an income nature not covered by the aforementioned categories.
Taxable Income (SGD)Year of Assessment 2023Year of Assessment 2024
OverNot OverFlat Tax (SGD)

Employee Benefits in Singapore

Mandatory Employee Benefits in Singapore

  • Central Provident Fund (CPF): Mandatory savings for retirement, housing, and healthcare, with contributions based on age and income.
  • Annual Leave: Legally entitled time off work, typically ranging from 14 to 28 days annually.
  • Maternity/Paternity Pay: Paid leave for new parents, including maternity, paternity, and shared parental leave.
  • Sick Leave: Mandated time off for illness, providing a minimum of 14 days outpatient and 60 days hospitalization leave.
  • Childcare Leave: Paid leave for childcare purposes, with employer and government sponsorship for different periods.

Supplemental Employee Benefits in Singapore

  • Mobile Phone Allowance: Compensation for using personal mobile devices for work-related purposes.
  • Season Parking: Company-sponsored parking for senior management team members.
  • Voluntary Benefits: Additional perks provided by larger employers at discounted rates.
  • Flexible Spending Dollars: Budget allocation for various expenses like health screenings and holidays.
  • Gym Membership: Subsidized or discounted memberships to promote employee fitness.
  • Study Benefits: Support for continuous skills upgrading and retraining.
  • Life Assurance: Non-mandatory life insurance coverage with varied premiums.
  • Medical Insurance: Coverage for medical expenses with co-payment options.
  • Work Injury Compensation: Mandatory coverage for work-related injuries.
  • Dental: Dental benefits commonly provided, even in small to medium enterprises (SMEs).
  • Employee Assistance Program (EAP): Mental health support often included in international medical plans.

Employee Perks in Singapore

  • Holidays, Gym Memberships, and Wellness Benefits: Reflective of dynamic organizational culture and commitment to employee well-being.
  • Additional Paid-Leave: Increasingly valued by millennials, often exceeding mandated requirements.
  • Subsidized Gym Memberships: Contribute to employee wellness either on-site or through partnerships with local gyms.
  • Educational Support: Financial assistance and paid study/leave days for job-related qualifications.
  • Onsite Wellness Initiatives: Programs promoting physical and mental well-being, such as massages and mindfulness classes.
  • Financial Wellness: Onsite education focusing on retirement planning and financial literacy.
  • Taxi and Dinner Reimbursements: Compensation for extended work hours, fostering employee well-being.
  • Others: Additional perks enhancing work-life balance and fostering a sense of community within the organization.

Leave Benefits in Singapore

Leave TypeDescription
Annual LeaveTypically provided around 14 to 20 days per year, exceeding the minimum mandated by the Singapore Employment Act.
Sick LeaveDuration varies based on employment duration:
- 0-3 Months: 5 non-hospitalized/15 hospitalized days
- 4th Month: 8 non-hospitalized/30 hospitalized days
- 5th Month: 11 non-hospitalized/45 hospitalized days
- After 6 Months: 14 days non-hospitalized/60 hospitalized days.
Work Related Injury LeaveEmployer covers all work-related injuries, providing 100% of average monthly earnings for 14 days if not hospitalized, and 66.7% thereafter. All work-related medical leave must be reported to the Ministry of Manpower since September 1, 2020.
Maternity LeavePaid maternity leave of 16 weeks for female employees employed for more than 3 months with a Singaporean citizen child. Employers cannot terminate employees during this period. Employees must inform their employer at least a week in advance and notify them of the delivery; otherwise, entitlement is reduced.
Public HolidayDateDay
New Year’s Day1 Jan 2020Wednesday
Chinese New Year25 Jan 2020Saturday
Chinese New Year26 Jan 2020Sunday
Good Friday10 Apr 2020Friday
Labour Day1 May 2020Friday
Vesak Day7 May 2020Thursday
Hari Raya Puasa24 May 2020Sunday
Hari Raya Haji31 July 2020Friday
National Day9 Aug 2020Sunday
Deepavali14 Nov 2020Saturday
Christmas Day25 Dec 2020Friday

Benefits of Payroll Outsourcing in Singapore

  • Ensuring Compliance with Complex Regulations: Outsourcing payroll services in Singapore guarantees meticulous adherence to intricate labor laws and regulations. Seasoned professionals adeptly navigate these complexities, reducing the risk of errors or penalties due to non-compliance, thus offering peace of mind to businesses.
  • Scalability and Adaptability: Payroll outsourcing provides unparalleled scalability and adaptability to meet the evolving needs of businesses. Whether expanding the workforce or adjusting to changes in employment regulations, outsourcing providers seamlessly tailor their services to meet these demands.
  • Access to Advanced Technologies and Expertise: Harnessing cutting-edge software solutions, outsourcing providers streamline processes, enhance data security, and improve efficiency in payroll management. Additionally, experts possess extensive knowledge of tax regulations, deductions, and reporting requirements, ensuring accurate and timely processing.
  • Cost Efficiency and Competitive Pricing: Outsourcing payroll leads to significant cost savings by eliminating the need to recruit and train in-house staff. Moreover, providers often offer competitive pricing models customized to the specific needs of businesses, optimizing cost-effectiveness while upholding quality service.
  • Supporting Business Expansion: Overall, outsourcing payroll services in Singapore allows businesses to concentrate on core objectives while benefiting from accurate, compliant, and cost-effective management. With specialized expertise, advanced technologies, and scalability, providers play a vital role in supporting the growth and success of businesses.
  • Adherence to High Safety Standards: Incorporating industry-leading security measures to safeguard sensitive data, coupled with ISO 27001 and ISAE3402 certifications, ensures strict adherence to information security protocols.
  • Consistent and Sustainable Performance: Ensuring reliable and sustainable performance that aligns with the dynamic demands of payroll services.
  • Flexibility and Scalability: Offering flexibility and scalability to accommodate evolving client needs and adapt to changing business environments.
  • Collaborative Cloud Tools: Utilizing a Cloud-based platform that fosters collaborative work, promoting efficiency and accessibility across teams. These certifications demonstrate a commitment to the highest standards of information security and operational integrity.

Payroll Solutions in Singapore

Unlock the potential of seamless payroll processing in Singapore with Mercans’ Global Payroll Solutions. Our adaptable models ensure local compliance, enable multi-currency transactions, and seamlessly integrate with global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems, making accurate payments effortless.

Explore Our Flexible Models:

  • Software as a Service (SaaS): Tailored for enterprise businesses managing payroll across multiple countries with diverse data points, locations, currencies, and languages. Our SaaS model optimizes operations for maximum efficiency.
  • Managed Services: Customized for mid-sized and large enterprise businesses handling multi-country payroll, our Managed Services model provides on-demand HR expertise, ensuring security, reliability, and compliance at every stage.
  • Human Resource Management System (HRMS): Ideal for mid to large businesses in expansion mode, our HRMS model offers a comprehensive suite of functionalities, including payroll and benefits. Companies can select the specific features they need, ensuring a personalized and efficient solution.

Streamline Payroll with Mercans’ Technology and Integrations

  • Technology: Explore the forefront of innovation with Mercans’ cutting-edge technology that powers our global payroll solutions. Learn more about our technological prowess here
  • Integrations: Seamlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing efficiency and connectivity. Discover the power of integration here.
  • Recognitions: Join a partner recognized for excellence. Mercans has earned accolades for its commitment to delivering exceptional payroll services. Explore our awards and recognitions here.

Outsource to Payroll Company in Singapore

In the bustling and dynamic business landscape of Singapore, Mercans stands out as the top-tier partner for navigating the intricacies of local operations. Our commitment to 100% compliance with Singaporean regulations, deep understanding of Singaporean labor laws, and extensive array of services establish us as the perfect ally for businesses aiming to excel in Singapore. Through collaboration with Mercans, businesses can leverage our expertise to guarantee seamless operations, compliance with statutory requirements, and a solid foundation for expansion in this thriving market. With Mercans as your trusted partner, embark on a journey of achievement and advancement in the heart of Southeast Asia.

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.