Running payroll in Singapore means calculating what each employee has earned, deducting the right amounts, paying salaries and statutory contributions, and keeping clear records. A bank transfer alone doesn't complete the job.
For a small team, the process can stay straightforward: confirm the month's changes, calculate pay, check the figures, then approve and pay. Here's how to organise that cycle, with a worked example and the deadlines to keep in view.
What to set up before your first payroll
Start with accurate employee details and a clear pay schedule. These are easier to get right at onboarding than to reconstruct at month-end.
- Employment terms: record the salary, allowances, working hours, pay period, leave and notice terms. Employees covered by the Employment Act who are employed for at least 14 days must receive written Key Employment Terms within 14 days of starting work.
- Employee records: collect the particulars needed for payroll, including date of birth, citizenship or permanent-resident status, PR conversion date where relevant, start date and bank details. Restrict access to those who need it.
- CPF and government access: apply for a CPF Submission Number before your first CPF submission. Set up the relevant Corppass access for the people handling employer filings.
- A payroll calendar: agree on the payment date, when changes must be submitted, who checks the payroll and who authorises the bank payment.
Keep contracts, salary revisions and opening leave balances together. Each month's payroll should start from the last approved position, not a fresh set of assumptions.
Calculate the month's salary and adjustments
Gather the changes first
Confirm joiners, leavers, salary changes, allowances, bonuses, commissions, overtime and leave. Separate paid leave from unpaid leave, and check any National Service arrangements before changing pay.
Keep expense reimbursements separate from wages. A receipt-backed business expense and a fixed cash allowance are not interchangeable, including for CPF purposes. Check which payments attract CPF rather than deciding by the label alone.
Use the right formula for an incomplete month
For a monthly-rated full-time employee who joins or leaves partway through a month, or takes unpaid leave, use MOM's incomplete-month formula:
Monthly gross rate of pay ÷ working days in that month × days counted as worked
For example, assume a monthly gross rate of S$3,500, 20 working days in the month and 12 days counted as worked. The salary is S$3,500 ÷ 20 × 12 = S$2,100.
The working-day count includes public holidays but excludes rest days and non-working days. Days counted as worked include entitled public holidays and paid leave. Don't automatically divide by 30.
“Gross rate of pay” has a specific statutory meaning. It excludes items such as overtime, bonuses, reimbursements and travel, food or housing allowances. It isn't simply every payment on the payslip. Leave encashment and notice pay also use their own calculation rules, not this incomplete-month formula.
Check overtime and deductions separately
Statutory overtime under Part IV of the Employment Act covers non-workmen earning a monthly basic salary of up to S$2,600 and workmen earning up to S$4,500. Managers and executives are excluded from Part IV. Eligible overtime must be paid at least 1.5 times the hourly basic rate; use MOM's overtime rules to check coverage and calculations.
Only make permitted salary deductions. A loan repayment or other amount owed by an employee doesn't automatically reduce the wages used to calculate CPF. CPF Board explains the treatment of salary deductions.
Work out CPF, SDL and other contributions
CPF: separate the employer and employee shares
CPF applies to eligible Singapore Citizen and Permanent Resident employees earning more than S$50 a month, including part-time employees. The rate depends on age, wages and PR status. First- and second-year PRs have separate rate tables, with options to apply for higher contributions.
You pay both shares to CPF Board, but deduct only the employee's share from salary. Your employer contribution is an additional business cost. Use the official CPF contribution calculator for the applicable month rather than applying 20% and 17% to everyone.
CPF also distinguishes Ordinary Wages, such as qualifying monthly salary, from Additional Wages, such as an annual bonus. From 1 January 2026, the monthly Ordinary Wage ceiling is S$8,000. The annual Additional Wage ceiling is S$102,000 minus the total Ordinary Wages subject to CPF for that year. These are different limits, so a bonus needs its own check against CPF's wage classification and ceilings.
Check rate changes before processing a new year. Our January 2027 CPF update explains the upcoming changes for senior employees.
SDL: an employer cost, including for foreign employees
The Skills Development Levy (SDL) is calculated at 0.25% of each employee's monthly total wages, with a minimum of S$2 and a maximum of S$11.25 per employee. It covers employees working in Singapore, including foreign employees, subject to the specific exemptions.
Calculate each employee's SDL, add the amounts together, then round the total down to the nearest dollar. Don't round down each employee's amount separately. When using CPF EZPay's automatic calculation, remember to add SDL for foreign employees. See CPF Board's SDL instructions, including the separate payment route for employers with only foreign employees.
Self-Help Group contributions and foreign-worker levy
Deduct the applicable Self-Help Group (SHG) contribution from the employee's wages and remit it with CPF. The funds are CDAC, ECF, MBMF and SINDA. Eligibility and rates differ, so check the current SHG contribution rules and keep any fund-approved changes on record.
Foreign employees who are not PRs don't receive CPF contributions, but that doesn't remove SDL or applicable SHG obligations. Work Permit and S Pass holders can also attract a foreign-worker levy. The levy is an employer cost: you cannot deduct it from their salary.
Worked example: S$4,000 monthly salary
Assume a 35-year-old Singapore Citizen employee earns S$4,000 for a full month in 2026. The employee contributes to CDAC at the standard rate, with no other applicable SHG contribution, bonus, unpaid leave, reimbursement or deduction. This example uses the 2026 CPF rates of 20% employee and 17% employer.
| Employee's payslip | Amount |
|---|---|
| Gross salary | S$4,000.00 |
| Less employee CPF: 20% | S$800.00 |
| Less CDAC contribution | S$1.50 |
| Net salary paid to employee | S$3,198.50 |
Your business also pays S$680 employer CPF and S$10 SDL. The total payroll cost is S$4,690: gross salary plus employer CPF and SDL. This excludes other employment costs such as insurance or benefits.
The money goes to two places: S$3,198.50 to the employee, and S$1,491.50 through the CPF payment comprising S$1,480 CPF, S$1.50 CDAC and S$10 SDL. Together, those payments equal S$4,690.
Avoid double-counting. Employee CPF and CDAC are already part of the S$4,000 gross salary. They reduce take-home pay; they aren't extra employer expenses.
Approve payroll and pay on time
Before releasing payment, compare this month's payroll with last month's. Check new bank details, joiners and leavers, unusual changes, contribution rates and the total funding needed. Keep the approval with the final payroll summary.
For employees covered by the Employment Act, pay salary at least monthly. Set your internal cutoff early enough to meet both the agreed payday and these requirements:
| Item | When to pay or issue it |
|---|---|
| Salary | Within 7 days after the salary period ends. |
| Overtime pay | Within 14 days after the salary period ends. |
| CPF contributions | Due on the last day of the calendar month. Enforcement follows if unpaid by the 14th of the next month, or the next working day if that date is a Saturday, Sunday or public holiday. |
| Itemised payslip | With salary payment. If that isn't possible, within 3 working days of payment. For termination or dismissal, issue it with the outstanding salary. |
These are separate obligations. Submitting a CPF return isn't the same as completing payment, and the 14th isn't the CPF due date. Refer to MOM's salary-payment rules and CPF Board's due-date explanation.
Once paid, match the payroll summary to the bank payment and contribution acknowledgements. Save any correction with an explanation instead of silently replacing the original figures.
Issue payslips and keep the supporting records
An itemised payslip should let the employee see how their take-home pay was calculated. Include the employer and employee names, payment date, salary period, basic pay, allowances, additional payments, deductions and net salary. Include overtime hours, pay and the overtime period where applicable.
Electronic or paper payslips are accepted. Check your format against MOM's required payslip items.
For employees covered by the Employment Act, keep the latest two years of employment and salary records. For former employees, keep their last two years of records for one year after they leave. These are MOM's employment-record requirements, not permission to delete every payroll document after two years.
Payroll also supports your accounts and tax returns. A company must keep the relevant business records for at least five years from the relevant Year of Assessment. Retain the payroll reports, payment evidence and supporting documents for the applicable longer period.
Handle annual reporting and employee departures
IR8A and the Auto-Inclusion Scheme
Monthly CPF submissions don't replace annual employment-income reporting. Under the Auto-Inclusion Scheme (AIS), employers submit employment income electronically to IRAS by 1 March of the following year. Employers outside AIS must provide Form IR8A and the applicable appendices to employees by that date, rather than send the forms to IRAS. See IRAS's reporting requirements.
AIS is compulsory for employers with five or more employees or an IRAS notice requiring participation. Count employees across the reporting year, including leavers, not just the headcount at year-end. Once registered, participation continues even if headcount falls below five. Our AIS employer guide explains the process; use IRAS's current participation rules to check your position.
Reconcile the year's payroll before reporting. Salary, bonuses, taxable benefits and director remuneration need the right treatment. Paying a director? Start with the distinction between director salary, fees and dividends, rather than treating every payment as salary.
Final salary and tax clearance
Don't automatically leave a departing employee's pay until the usual payday. An employee who resigns and serves notice must receive final salary on the last day. If they resign without serving notice, the deadline is within seven days. When the employer terminates the contract, payment is due on the last day or, if that isn't possible, within three working days. Check the final-salary rules for the situation.
For a non-Singapore Citizen employee, check whether IR21 tax clearance is required before releasing payment. Where required, notify IRAS at least one month in advance and withhold monies from the time you know about the relevant cessation or departure. Exemptions apply, including certain PR situations, so check the employee's circumstances rather than withholding by nationality alone.
Keeping payroll manageable as your team grows
A spreadsheet can organise a small, straightforward payroll, but someone still needs to maintain the rules, review changes and complete the submissions. Software helps with calculations and records; it doesn't replace a check of the inputs or payment approval.
Before each pay run, ask: have all changes been confirmed, do the figures reconcile, has payroll been approved, and are salary and statutory payments funded? Those checks matter whether you handle payroll yourself or outsource it.
With our HR administration and payroll services, we maintain employee and leave records, prepare payroll and payslips, and handle the routine payroll-related statutory submissions you authorise. You retain control of employment decisions and salary payments. Send us your headcount and current payroll arrangement, and we'll help you work out the next step.
