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Payroll for Small Businesses in Singapore

  • 3 min read

Running a small business in Singapore is exciting, but managing payroll can feel overwhelming & headache. Between CPF contributions, tax regulations, and compliance requirements, it’s easy to get lost in the details. But don’t worry, this guide will walk you through everything you need to know about payroll for small businesses in Singapore. By the end, you’ll feel confident handling payroll like a pro!

1. Why Payroll Matters for Small Businesses

Payroll isn’t just about paying employees on time. it effects:

  • Employee satification – late or inccorrect payment hurt morale
  • Legal compliance – Mistakes can lead to fines or penalties.
  • Business reputation – A smooth payroll process builds trust

Since Singapore has stict employment laws, getting payroll right is crucial

2. Key Components of Payroll Singapore

A. Basic Salary & Overtime Pay

  • Employees must be paid at least once a month
  • Overtime pay applies to non-managering staff earning ≤ S$2,600/month.
  • Overtime rate: 1.5x hourly rate (after 44 hours/week)

B. CPF Contributions (Central Provident Fund)

  • Mandatory for Singapore and Permanet Residents (PRs)
  • Employers must contribute 17% (For employees under 55), while employees contribute 20%
  • No CPF for foreign workers (except under specific schemes)

💡Some Tip : What is a CPF Contribution?

C. Taxes (IRAS & Auto inclusion Scheme)

  • Sinagpore uses progressive tax rates (0 to 24%) filling of personal income tax returns is mandatory if their annual income $20,000 SGD or more.
  •  Employers must submit employees’ income details via IRAS Auto-Inclusion Scheme (AIS).

D. Leave & Benefits

  • Annual leave (min. 7 days/year, increases with tenure).

  • Sick leave (14 days/year if covered under Employment Act).

  • Maternity/Paternity leave (government-mandated).

3. Step by step how to process Payroll for your Business

Step 1: Register as an Employer

  • Sign up with CPF Board and IRAS
  • Get your Employment Indentification Number (EIN) if hiring Foreigners.

Step 2: Gather Employee Details

  • Full Name, NRIC/FIN, employment start date, salary and bank details.

Step 3: Calculate Gross Salary & Deductions

  • Include basic pay, bonuses, commissions.
  • Deduct CPF, taxes, and any other employee contributions.

Step 4: Process CPF Contributions

  • Submit via CPF EZPay by the 14th of each month

Step 5: File Taxes & Submit Payslips

  • Generate itemized payslips (required by law)
  • Submit income details via IRAS AIS by 1 March yearly

Steps 6: Keep Records

  • Maintain payroll records for at least 5 years (required by law).

4. Common Payroll Mistakes to Avoid

  • Late CPF submissions → Penalties apply.
  • Misclassifying employees (Full-time vs. Part-time vs. Contract).
  • Incorrect tax calculations → Use IRAS tools to verify.
  • Not issuing payslips → Fines up to S$1,000 per offence.

Conclusion

Managing payroll in Singapore doesn’t have to be stressful. With the right tools and knowledge, you can ensure timely payments, stay compliant, and keep your team happy.

Are you looking Someone to handle your Payroll for your Small business? We’re Here to Help!, Click here.

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