Employees in Singapore who fall within the purview of the Employment Act are entitled to receive itemized payslips as of April 1, 2016. If you are a Singaporean company owner who has started recruiting employees, you may be curious about the process of creating payslips and the Singapore payslip requirements. Listed below are the specifics, such as what should be included, when it should be given, and how it should be presented.
The components of an employee’s salary should be clearly outlined in a document known as a payslip. Paycheck stubs must comply with Singapore payslip requirements, including details such as the employee’s compensation in full, including their base pay, extra pay, incentives, Central Provident Fund (CPF) deductions, and any other pertinent information. Therefore, a payslip with line-by-line detail may serve as evidence of remuneration and its receipt.
It may seem like extra work for firms and Human Resources departments to provide payslips. However, workers feel more well-assured knowing they are being paid properly since their employers detail their income in a regular payslip. The result may be an increase in workers’ faith in their bosses, which in turn may increase their desire to remain in their current positions.
Furthermore, businesses may get fewer wage complaints from workers, or be able to settle such concerns more quickly, since all the key financial information pertaining to the employee’s salaries and perks are presented clearly in the payslip.
Are Employers Required to Provide Payslips to Workers?
According to Singapore’s laws, if you have workers who fall within the purview of the Employment Act, you must provide them with itemized payslips. Examples of employees who are not covered under the Employment Act are seafarers, domestic workers, employees of statutory boards, and government employees.
Pay stubs should be issued concurrently with the wage or other payment to the worker. If the paycheck and pay stub are unable to be issued at the same time, the latter must be delivered no later than three business days after the former. If you intend to or have already terminated or fired your employee, you must provide him or her with a copy of his or her pay stub and any unpaid wages
If you do not give detailed pay stubs, the Ministry of Manpower (MOM) might fine you. A monetary penalty in the range of $100-$200 for each incident of noncompliance is another option.
It is likewise a violation of the Employment Act to:
- Miss the deadline for delivering itemized payslips.
- Not provide a correct or full pay slip, whether or not this was done on purpose.
Thus, in addition to the monetary penalties mentioned above, you may also face criminal charges if you fail to provide timely and correct pay stubs. There is a maximum punishment of $5,000 and a maximum prison sentence of 6 months per offense if you are proven guilty. You might also face an additional punishment of up to $500 every day if you do not provide the itemized payslip or fix an erroneous one.
Singapore Payslip Requirements
Singapore payslips may be issued in either electronic (such as a digitally-generated PDF) or hard copy (including handwritten) formats. However, digital payslips must be made available and serviceable by workers in the event they need to refer to them in the future. The law specifies that pay slips must contain the following pieces of information:
- Complete names of the company and employee
- Pay date (or dates if several payments are being consolidated)
- Initial salary (for those whose compensation is determined by the number of hours worked, days worked, or units generated, provide the starting rate of pay, such as $X per hour, and the total number of hours, days, or units)
- Pay period beginning and ending dates
- All fixed and one-time allowances provided throughout the wage period (such as the transportation allowance and uniform allowance, respectively); Bonuses, paid time off, and holiday pay are just a few examples of supplementary compensation that may be received within a given pay period
- All predetermined deductions (such as the employee’s CPF contribution) and any other deductions (such as those for no-pay leave or absence from work) taken out of each pay period
- Time spent working overtime
- Extra time compensation, the beginning and end dates of the overtime payment period, and the gross amount of compensation received
How Can We Help?
It’s clear that every business has to take payroll management and the Singapore payslip requirements seriously. However, this is easier said than done. When you consider the extensive duties that business owners are responsible for, you’ll understand how difficult it can be to handle this process yourself. Do you need help with handling the payroll processing for your employees? SJH Advisory is here to help you with our professional payroll services. We are a top-rated, professional business consultancy firm with expert corporate secretaries and accountants to help you handle the entire process.
Singapore Payslip Requirements - Frequently Asked Questions
You may manually create your Singapore payslips using the MOM-provided template. Alternatively, investing in software that may automate the process of creating and delivering Singapore payslips might be more convenient.
If you are worried about the costs of these programs, you can consider applying for the Productivity Solutions Grant (PSG). To be eligible to apply for the PSG, your company needs to be legally established and actively trading out of Singapore. Your company must also be utilizing payroll software in Singapore in order to legally acquire or subscribe to it.
Itemized pay slips for current workers must be kept for a minimum of 2 years. You must maintain the previous two years’ worth of records for a departing employee for at least a year following their final day of work.
Paycheck slips must include all relevant information and be completely correct before they may be issued (containing all 12 legally required details). It may be illegal if you fail to do so.
In addition to the mandated pay slip provision, Singapore law imposes a number of additional obligations on employers. For example, you must pay your workers on time; provide them with the benefits they were promised; and terminate them properly and with the appropriate amount of notice in order to comply with the law.
If you need guidance complying with employment regulations, you may wish to speak with an attorney specializing in employment law. An employment attorney can help you understand the provisions of your employment contract and how to handle employee lawsuits if a disagreement arises.
In order to be in compliance with payroll laws, businesses should be familiar with the laws. Mistakes may cost the company a lot of money and damage its image and reputation. Company founders and business owners in Singapore are responsible for researching the laws governing employee compensation.
Professional service providers may guarantee precision and legality while processing payroll. These are the most important rules in Singapore that govern payroll.
All workers with a contract of employment fall within the jurisdiction of the Employment Act (EA), regardless of their country of origin. Those working on ships, in private households, or for government agencies are excluded. The Employment Act applies to all workers who have entered into a contract of employment with their employer, with the exception of the provisions of Part IV of the Act, which does not apply to managers or executives. Employment Claims Tribunals, rather than the Ministry of Manpower, will consider cases of unfair dismissal beginning on April 1, 2019. (MOM)