Payroll Made Simple: A Singapore Startup Guide

Employee Contracts and Documentation

Every employee must have a written contract outlining salary, benefits, leave entitlements, and terms of employment. The contract must comply with the Employment Act and clearly specify all compensation components.

Salary Components and Deductions

Employee salary typically includes:

• ✓ Basic salary
• ✓ Allowances (transport, housing, etc.)
• ✓ Bonuses and commissions
• ✓ CPF contributions (employer + employee)
• ✓ Income tax withholding

CPF Contributions

CPF contributions are mandatory for all Singapore citizens and permanent residents. Employers contribute 17% of ordinary wages (capped at SGD 6,800 monthly), while employees contribute 8%. Both contributions are paid to the employee's CPF account.

Payslip Requirements

Payslips must include all salary components, CPF contributions, deductions, and net pay. They must be provided to employees by the 7th day of the following month. Accurate payslips are crucial for compliance and employee trust.

Key Compliance Deadlines

Important dates to remember:

• 📅 Monthly: CPF contributions due by 7th of following month
• 📅 Monthly: Payslips issued by 7th of following month
• 📅 Annually: Annual CPF statement to employees
• 📅 Annually: Income tax filing by 15 November

Common Payroll Mistakes

Avoid these costly errors:

• ❌ Incorrect CPF calculation
• ❌ Missing income tax withholding
• ❌ Late CPF payments
• ❌ Inaccurate payslips
• ❌ Not maintaining payroll records