Tips on How to Manage Your Payroll in Singapore
Do you find it challenging to manage your payroll in Singapore? If your answer is “Yes!” you should find its root cause and take immediate action to resolve the situation. Failing to do so will compromise your payroll compliance efforts and bring you grief.
You, as a Singapore employer, have to work hard to comply with the payroll and labour laws. You are responsible for calculating accurate salary, contributions, and taxes. You also must deposit salaries and generate itemised payslips and payroll reports.
Payroll processing is inherently complicated and taxing. It is much more than just maintaining a list of employees and what you must pay them. You need payroll experts to manage your payroll in Singapore accurately.
Payroll in Singapore is too much of a task for owners, especially those who are solo owners and multitask. So, at this juncture, it will be a wise move for you to explore the alternative of hiring a payroll services firm.
Key Tips to Manage Your Payroll in Singapore
Here are a few key tips to manage your payroll in Singapore:
1.Calculate salary by combining basic wages and allowances. Do not include allowances for food, housing and travelling in it.
2.You should pay your employees at least once a month along with the payslips within 7 days of the end of the pay cycle.
3.You must generate and deliver detailed and itemised payslips to your employees covered by the Employee Act.
4.You must maintain employee and salary records for your current and ex-employees as per the law for tax purposes.
5.Keep ex-employee data for at least one year after parting.
6.Use terms of the employee contract to calculate the pay for an incomplete month.
7.Pay your employees 1.5 – 2 times their hourly basic rate for overtime.
8.When you get a notice to submit employment income details, use the IR8A form to do so electronically. You may need to register for the Auto Inclusion Scheme with IRAS.
9.Accurately calculate and submit mandatory contributions, including CPF, Ethnic Funds and Skills Development Levy.
Common Mistakes in Payroll Management
Any mistake in your company’s payroll processing can cause resentment in employees. Studies show that many start searching for a new job after the 2nd mistake. And losing experienced employees to such an avoidable mistake is not something you want. This is where Singapore payroll services can assist you.
Update Employee Details
Their experts have updated knowledge about payroll and labour laws. They help you update payroll-related information, including employee data. It is vital to update employee details like changes in grade, location of work, pay rate, Etc. Doing this helps them avoid mistakes and produce accurate salaries.
Inexperienced In-house Payroll Staff
Sometimes, companies fail to invest in a reliable payroll services firm, executive or software. It results in less-than-optimal payroll outputs.
Such an executive may not be able to tackle deep payroll issues, causing costly errors or compliance issues. You may need more time, mental energy, and expenses to rectify the situation.
Failing to maintain Employee Payroll Data
Not maintaining your current and past employees’ data is a big mistake. Keeping this data is mandatory as it helps resolve payment disputes. With it, you can answer queries from tax regulatory bodies like IRAS.
So collect and store all employment data and forms like Form IR8A and Appendix 8A, IR21, Form IR8S or Appendix 8B for the prescribed time. You also need to submit it to authorities before the 1st of March.
You must protect confidential data like salary, service contracts, benefits, and employee data. You must have processes to discourage the leaking of this data, especially if you process your payroll in-house.
Hiring a professional firm takes the bite out of the task and helps you manage your payroll in Singapore. Since a hired payroll services firm is a third party with no interest in your employees, it minimises the chances of data leaks.
Accurate processing of payroll is a must for every company. You can manage your payroll in Singapore in-house or outsource it to a third party. The latter option is more of a professional approach to executing this time-consuming and tedious task. It is also cost-effective and saves you time, which you can use to grow your company.