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What you need to know about Payroll

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General Information

  1. Singapore does not have a legally mandated minimum wage.

  2. Salary agreements between employee and employer must include basic pay, incentives, commissions, contributions/deductions, bonuses, and allowances.

  3. An exception for foreign workers with Work Passes (Employment Pass, S Pass, Work Permit). They must meet minimum salary criteria specific to their pass type.

  4. Government mandates minimum salaries for workers in cleaning, security, and landscape industries.

CPF Contribution

The Central Provident Fund (CPF) is a mandatory retirement savings plan in Singapore, requiring adherence by both employees and employers. Each party is obligated to contribute at a specified rate.

  1. Monthly deductions from salaries are made into CPF accounts, accessible post-retirement.

  2. At age 55, a Retirement Account (RA) is created.

  3. CPF savings accumulate in three accounts:

    • Ordinary Account (OA): For retirement housing, insurance, and investment.

    • MediSave Account (MA): For hospitalization and approved medical insurance.

    • Special Account (SA): For old age, retirement-related investments.

  4. CPF deductions apply to Singapore Citizens and Permanent Residents.

  5. Not applicable to Employment Pass or Work Permit holders, who are expected to return to their home countries.

  6. CPF contribution rates range from 12.5% to 37% of monthly wages, with a salary ceiling increase from $6,000 to $8,000 by 2026.

  7. Visit the Central Provident Fund (CPF) website or contact for more information.

IR8A Form

  1. IR8A form is a mandatory for reporting employee income to the Inland Revenue Authority of Singapore (IRAS).

  2. Every year on 1 March, IRAS must receive IR8A form submissions from all employers doing business in Singapore. It must be filled out for each worker at that firm to alert IRAS of their wages.

  3. Employers with six or more workers must participate in AIS; companies with five or fewer employees can opt-in.

  4. The IR8A form is submitted electronically to IRAS via the Auto-Inclusion Scheme (AIS) for Employment Income on their website.

  5. The submitted IR8A form includes:

    • Full-time and part-time resident workers.

    • All non-resident workers.

    • Local corporate officers.

    • Directors of non-resident corporations.

    • Board/committee members receiving fees.

    • Employees on pension from the company.

    • Former employees owed prior year wages.

  6. In cases where employees receive benefits-in-kind or profit share, employers must also submit Appendix 8A and 8B. Additionally, if an employer has overpaid CPF contributions or intends to claim a refund for extra CPF contributions, they must provide Appendix 8S.

  7. Further information available on the IRAS website regarding IR8A and its appendices

IR21 Form

  1. IR21 form (sample) required for non-Singapore citizen employees leaving Singapore for over three months, going on overseas assignments, or ending employment.

  2. It serves as tax clearance for Work Pass holders leaving local assignments.

  3. Employers must complete IR21 for clearance, withholding payments upon learning of departure or employment cessation.

  4. IR21 form should be submitted to Inland Revenue Authority of Singapore (IRAS) at least one month before employee's departure.

  5. Detailed submission guidelines are available on the IRAS website.

Skill Development Levy (SDL)

  1. Skill Development Levy (SDL) is a compulsory levy employers must pay for all employees, including foreign employees working in Singapore.

  2. SDL is paid in addition to monthly CPF contributions and collected by the Central Provident Fund Board for SkillsFuture Singapore Agency (SSG).

  3. Funds go to the SDL, supporting workforce training and grants under the National Continuing Education Training system.

  4. For details on calculation, payment, exemptions, and refunds, refer to CPF fact sheets.

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