Payroll Outsourcing Singapore
Each country has its own uniquely tailored regulations and processes when it comes to payroll administration and tax contributions, which employers should always keep in mind when expanding to a new territory. Singapore is no different, and as such, businesses who operate in Singapore need to ensure their payroll and tax practices are compliant with local regulations. INS Global is a leader in human resource solutions in Singapore and can provide your business with the necessary assistance in payroll and tax administration.
Overview of Payroll in Singapore
According to Singapore regulations, employers are required to provide employees with a pay slip which includes details such as date of payment, gross salary, deductions made, and net salary.
Minimum wage requirement
There is no minimum wage requirement for workers in Singapore. The Ministry of Manpower (MOM) takes the position that wages should be determined by the market demand and supply for labor. However, there is a minimum salary requirement for foreign professionals, managers and executives to work in Singapore. Among the requirements for these persons to obtain an Employment Pass (the pass foreign employees need to be eligible to work in Singapore), there is a minimum salary threshold, which is (from the 1st of September 2020):
- The S Pass: S$2,500
- Employment Pass: S$4,500
- Financial services sector: S$5,000
Income Tax and Social Security in Singapore
In Singapore, there is no withholding income tax by an enterprise. Therefore, it is the employee’s responsibility to file their annual tax declaration and make their contribution directly to the tax authority, the Inland Revenue Department (IRD).
Despite no withholding tax, enterprises should withhold an employee’s salary and seek tax clearance for its foreign employees. This is done by filing the IR21 form, with notice of 1 month, under the following circumstances:
- An employee stops working in Singapore
- An employee leaves Singapore for a period longer than 3 months
- An employee has accepted an overseas posting
The income tax rate in Singapore works on a progressive tax system, with the highest marginal rate being 22%. An employee is taxed on all income (which includes base salary, any commission and bonuses) earned in Singapore for the relevant tax year, subject to any tax deductions.
Social Security in Singapore
For Singaporean workers the Central Provident Fund (CPF) is the social security fund to which their contributions are made. An employer is required to pay both the employer’s and employee’s share of contributions; however, the employer is entitled to recover the employee’s share directly from the employee’s earnings.
CPF contributions are made for Singapore citizens as well as Singapore permanent residents who:
- Work in Singapore under a contract of service; and
- Are employed in Singapore on a permanent, part-time or casual basis.
CPF contributions are determined according to an employee’s monthly income (even if wages are paid on a weekly or fortnight basis)
Our Payroll and Tax Service in Singapore Includes:
- Registration at necessary tax bureaus in Singapore.
- Calculations of tax and monthly contributions for each of your local employees.
- Annual leave management.
Why Payroll Processing is important
Successful management of a payroll is made up of a combination of accurate processing, timely disbursement and accurate processing. For small to medium size businesses, outsourcing your payroll in Singapore could be more cost-effective than managing it in-house. Outsourcing this function reduces risk for your enterprise and ensures compliance.
How INS Global in Singapore
INS Global has more than 14 years of experience helping companies in the Asian marketplace. Our Singapore experts are able to assist your enterprise across a range of services. Whether you are considering hiring talent, invoicing clients or incorporate an entity, INS Global can assist you. Contact us today and let us simplify your expansion into Singapore.