In a business, the workforce is extremely important. Human resources are considered the most valuable asset in organizations, especially companies. They are the workforce that drives the business forward to achieve their goals and missions. That is why every entrepreneur should take care of their employees. They should not mistreat them or abuse them. Furthermore, they should help them achieve their individual goals. One way to do this is by not neglecting the payroll Singapore system.
Payroll is the process wherein the salary and other benefits of the employees are calculated, monitored, and distributed. The payroll outsource Singapore staff to make sure that all employees are paid accordingly and on-time. They ensure that all salary records are organized and no discrepancies are present. In addition, they need to abide by the payroll Singapore rules and regulations. In this article, we will cover the five payroll rules and regulations in Singapore.
#1 – Salary = base pay + allowance
According to the payroll Singapore legislation, a salary is only composed of the base pay and the allowance. Base pay is the amount paid for the work provided by the employee. It is usually rated depending on the hours the worker has allotted serving the company. On the other hand, allowance is more of the additional amount added to the base pay. This amount is usually used for covering other expenses that the employee acquires by working in that company.
Unlike base pay, allowances are not taxable. However, as most payroll outsource Singapore firms know, the allowances included in the salary doesn’t mean travel, food, or housing allowances. These are given as separate benefits to the employee. Other allowances that shouldn’t be in the salary are pension, mandatory contributions, costs incurred during work, and retrenchment benefits.
#2 – Salary must be paid once a month
Another payroll rule that your payroll outsource Singapore agency will ask you to strictly follow is the salary payment schedule. It is required that the salary must be paid at least once a month. It can be paid at shorter intervals such as bi-weekly or weekly depending on the employment agreement.
Should you choose to pay salaries on a monthly basis, the payroll outsource Singapore company will pay the salaries immediately. Usually, it should be paid within seven days after the end of the salary period. Not paying an employee’s salary is an offense and can bring problems to the company as a whole.
#3 – Itemized payslips are required
Another payroll Singapore regulation is that all employee payslips should be itemized. This means that every detail of how the salary amount is computed should be indicated in the payslip. It should include the salary, specified allowances, and overtime pay. It should contain the date of payment, the hours worked, the salary period, and deduction if applicable.
This payroll Singapore law took effect on the 1st of April 2016 through the Employment Act. Several payroll outsource Singapore businesses give soft copies of the payslip but some still provide hard copies. Either way, they are both accepted under the Employment Act.
#4 – Must store employment records
All payroll outsource Singapore firms will recommend you to store employment records. Most of them will build a database for this for easy and fast filing. According to the payroll Singapore legislation, employers are expected to keep at least two years of employee records. These records include detailed employment information and salary records. As for former employees, a company should hold on to these records for a year after the employees leave their employment. Once a year has passed, employers are free to dispose of these records.
#5 – Employers must pay monthly contributions
A payroll outsource Singapore team is not only good at managing salaries. They are also good at monitoring mandatory levies, contributions, and statutory requirements. Singapore employers are required to pay the monthly Central Provident Fund (CPF) contributions for each of their Singaporean employees. There are more contributions that an employer has to pay for their employees. These contributions will be introduced and explained to you by the payroll outsource Singapore agency that you hired.
Comply with every payroll Singapore rule and regulation
No country wants its workforce to suffer and be abused. That is why countries like Singapore enforce strict rules and regulations to ensure all employees are treated fairly and receive their benefits for working. Complying with all the payroll Singapore rules and regulations can be a lot for most entrepreneurs. That is why they hire the assistance of a payroll outsource Singapore company. A payroll outsourcing firm like Ren Ai Group can ensure that your company is following all the laws on employee salaries. To know more about our payroll services, contact us by heading to our website.