Payroll in Singapore: A Comprehensive Guide for 2026

Introduction

Payroll in Singapore requires monthly Central Provident Fund (CPF) contributions for citizens and permanent residents, Skills Development Levy (SDL) payments for all employees, including foreign workers, Foreign Worker Levy (FWL) remittances for Work Permit and S Pass holders, and annual income reporting to the Inland Revenue Authority of Singapore (IRAS).

A foreign company without a registered Singapore entity cannot open a CPF Submission Number or file employee income with IRAS, which means it cannot legally process payroll.

What makes Singapore unusual is that the employer cost structure changes entirely depending on who you hire.

A Singapore citizen triggers 17 percent in employer CPF contributions. An Employment Pass holder at the same salary triggers near-zero statutory cost beyond SDL. Permanent residents in their first two years contribute at graduated CPF rates that differ from the full citizen schedule.

Getting the wrong rate applied to the wrong employee category produces a systematic error that compounds every pay cycle, and the CPF Board charges 1.5 percent monthly interest from the first day after the deadline.

This guide covers the payroll process, statutory contributions and tax treatment, paid leave entitlements, compliance risks, and how to run payroll in Singapore without a local entity.

How can you run payroll in Singapore?

A company paying people in Singapore has two routes, and the choice comes down to headcount, time horizon, and whether it wants to build the registrations and reporting infrastructure that Singapore payroll requires across the CPF Board, IRAS, and the Ministry of Manpower.

Option 1: Set up a Singapore entity

You register a Private Limited Company (Pte Ltd) with the Accounting and Corporate Regulatory Authority (ACRA), appoint at least one local resident director who is a Singapore citizen, permanent resident, or EntrePass holder, and maintain a local registered address. Before the first salary is paid, you apply for a CPF Submission Number (CSN) from the Central Provident Fund Board and register with IRAS for the Auto-Inclusion Scheme (AIS) if you have more than 5 employees.

After that, you carry monthly CPF contributions, SDL payments for every employee, IR8A filings by March 1st each year, and Foreign Worker Levy remittances for any Work Permit or S Pass holders on the payroll for as long as the entity exists. Companies operating in Singapore are also required to keep salary records for one year after an employee leaves the organization and maintain two years' worth of salary records for each employee. This route generally suits larger teams and a longer time horizon.

Option 2: Pay through a provider

Another way to run payroll in Singapore is to work with a payroll service provider that already holds a registered Singapore entity and the CPF Board and IRAS registrations.

An employer of record goes a step further and acts as the legal employer, so the employment contract, CPF enrolment, and IRAS reporting obligations sit with them. This route generally suits smaller or exploratory teams, since payroll starts on an entity that already exists.

Skuad is one such provider, supporting payroll, statutory contributions, and payslip delivery across supported markets from a single platform, so your finance team works from one pay cycle instead of several country processes.

Here is what Skuad helps with:

• Supports payroll processing in 70+ currencies from a single platform
• Facilitates statutory deductions including CPF and SDL across supported markets on every pay run
• Supports payslip generation and downloadable payment history for each employee
• Helps consolidate payroll reporting across 160+ countries in one dashboard

Either way, gross salary is only part of what a Singapore hire costs. CPF contributions, SDL, and Foreign Worker Levies stack on top of it, and the split changes depending on whether the employee is a citizen, a permanent resident, or a foreign worker on a work pass.

What does the payroll process in Singapore involve?

Payroll in Singapore applies to employees only. Independent contractors are engaged under a separate arrangement and fall outside the payroll process entirely. Employees go through a monthly payroll run with statutory deductions and a payslip, while contractors invoice you and their payments carry no CPF obligation on the employer's side, though the Skills Development Levy still applies. The components below cover the employee payroll workflow.

1. Employee information

This should include full name, date of birth, address, NRIC (for citizens and permanent residents) or FIN (Foreign Identification Number, for work pass holders), nationality, residency status (citizen, permanent resident, or foreigner), work pass type (Employment Pass, S Pass, Work Permit, or Dependant's Pass), and bank account details.

Residency status has to be confirmed before the first pay run because it determines whether CPF contributions apply. CPF is mandatory for Singapore citizens and permanent residents only. Foreign employees on work passes do not attract CPF, but the employer pays a Foreign Worker Levy for S Pass and Work Permit holders instead.

2. Salaries and wages

This should include whether the employee receives an hourly wage or a fixed monthly salary, gross pay before deductions, hours worked including overtime, the overtime rate, benefits contributions, additional income such as bonuses, commission, or an Annual Wage Supplement (AWS), and net pay after deductions.

In Singapore, salary proportion is, by default, calculated by the number of working days. Under the Employment Act, standard working hours are capped at 44 hours per week or 8 hours per day (9 hours per day on a five-day work week) for employees covered by Part IV. Part IV applies to workmen earning a monthly basic salary of $4,500 or below and non-workmen earning $2,600 or below. Managers and executives are not covered by Part IV regardless of salary.

Work beyond the contractual hours for Part IV employees is overtime, compensated at a mandatory minimum of 1.5 times the hourly basic rate of pay. Legally, a Singaporean employee may only work up to a maximum of 72 hours of overtime a month. Overtime wages must be paid within 14 days after the end of the salary period in which the overtime was worked.

A 13th-month salary is not required by Singapore law. However, many employers pay an Annual Wage Supplement (AWS), typically equivalent to one month's salary, as a year-end bonus. Any bonuses you do issue through payroll in Singapore are entirely at your discretion unless an employment contract or collective bargaining agreement says otherwise.

3. Deductions

This should include the employee's share of CPF contributions, the employer's CPF contribution, Skills Development Levy, and any applicable self-help group (SHG) fund contributions.

Income tax and employer reporting

• There are no payroll taxes in Singapore. All workers are responsible for calculating and paying their own income tax, and the employer does not withhold it from monthly salary.
• The employer reports each employee's annual earnings to IRAS through the Auto-Inclusion Scheme (AIS) via the IR8A Form by March 1st each year. Any company with more than 5 employees must file under AIS.
• The one exception is departing foreign employees: the employer must file Form IR21 with IRAS at least one month before the employee's last day and withhold all monies due until IRAS issues clearance.

Currency and payment

• A business must pay its employees in Singapore Dollars (SGD).
• Bank transfer by the end of each calendar month is standard practice, with salaries due no later than seven days after the end of the salary period under the Employment Act.

Payslips and record-keeping

• All employees must be provided either a hard or soft copy of all of their payslips, containing itemized details of their basic pay, any allowances, and any overtime they have worked.
• Payslips must show the start and end date of the payment period as well as the date the payment was sent, along with all deductions such as CPF and SDL.
• Payslips must be issued with each salary payment or within three working days under the Employment Act's itemised payslip rules.
• Companies operating in Singapore are also required to keep salary records for one year after an employee leaves the organization and maintain two years' worth of salary records for each employee.

What are the key statutory requirements for payroll in Singapore?

Before hiring in Singapore, it is important to understand the statutory requirements underlying the payroll process. Two areas define most of the compliance risk for foreign employers: income tax reporting and minimum wage obligations.

Income tax

Singapore taxes personal income on a progressive scale for tax residents, with rates starting at 0 percent on the first $20,000 of chargeable income and rising to a maximum of 24 percent on income above $1,000,000. Personal income tax can range from 0 to 24% based on the individual's tax bracket.

An employee is considered a tax resident if they are a Singapore citizen, a permanent resident residing in Singapore, or a foreigner who has worked in Singapore for 183 days or more in the preceding calendar year. Non-residents are taxed at a flat rate of 15 percent on employment income or at the progressive resident rates, whichever produces the higher tax amount.

The employer does not withhold income tax monthly, as covered in the payroll process above. The compliance weight for employers sits in accurate year-end reporting and in correctly classifying what counts as taxable income.

The following components of employee income are subject to income tax:

• Base salary
• Bonuses, commissions, and Annual Wage Supplement (AWS)
• Overtime pay
• Benefits in kind, including housing, company car private use, and employer-paid insurance premiums
• Gains from Employee Stock Option Plans (ESOP) or Employee Share Ownership Plans (ESOW)

Reimbursement of genuine business expenses is generally not treated as taxable income, provided it is supported by documentation. Reimbursements without supporting records may be treated as salary by IRAS.

Minimum wage

Singapore is one of the few developed countries in the world that doesn't have a minimum wage. Singapore's Employment Act does not set a minimum standard to which all workers must be paid. Instead, the government uses the Progressive Wage Model (PWM), which sets mandatory minimum salaries for specific sectors, tied to skills and career progression.

Except for cleaners and security guards and the other sectors listed above, wages and salaries are entirely dependent on the skills and competence of the workers. Outside PWM-covered sectors, the only binding floor is the Local Qualifying Salary (LQS) of $1,600 per month (rising to $1,800 from 1 July 2026), which applies to companies that hire foreign workers and need their local employees to count toward the foreign worker quota.

Non-compliance with PWM carries direct consequences: MOM will withhold work pass renewals and new applications until the employer demonstrates compliance, which can effectively freeze hiring.

The layering of sector-specific PWM floors, age-graded CPF rates, SDL, and Foreign Worker Levies means that total employment cost varies significantly from one employee to the next. Modelling the full employer-side cost per hire before extending an offer avoids surprises after onboarding.

Skuad's employee cost calculator supports this by showing the employer-side breakdown for a Singapore hire before onboarding begins.

Skuad acts as the legal employer in Singapore, so your company can hire, onboard, and pay employees without setting up a local entity, local legal counsel, or in-house Singapore payroll infrastructure.

Here is what Skuad helps with:

• Acts as the legal employer across 160+ countries, including Singapore
• Facilitates statutory contribution workflows covering applicable social insurance and pension obligations across supported markets
• Supports payroll processing in 70+ currencies with accurate withholding and statutory deductions
• Helps with work permit and visa coordination for foreign hires
• Supports employment contract generation aligned with local labour laws across supported markets

Book a demo to see how Skuad supports payroll for a Singapore hire without entity setup.

What are the paid leave rules in Singapore?

Singapore guarantees a minimum of seven days of paid annual leave under the Employment Act, with entitlements increasing by one day per year of service up to 14 days. Beyond that baseline, sick leave, maternity, paternity, and the new shared parental leave scheme each follow their own rules under separate legislation. Employers need to track all of these separately because underpayment of leave is treated as a salary violation under the Act.

Paid annual leave

Paid annual leave in Singapore must be available to all employees after three months of service, with a minimum of 7 days and a maximum of 14 days for employees with at least 8 years of service. These are statutory minimums under Section 43 of the Employment Act. Many employers offer 14 to 21 days as standard in professional roles.

Sick leave

After a minimum of 6 months of continuous employment, workers are entitled to paid sick leave at the following rates:

The 60 days of hospitalisation leave includes the 14 outpatient days. They are not added on top. A valid medical certificate from a registered practitioner or dentist is required, and employers must accept certificates issued through teleconsultation. Sick leave is paid at the employee's gross rate of pay.

Public holidays

Singapore recognizes 11 gazetted public holidays per year, which must be paid days off. If a public holiday falls on a rest day, the next working day is a paid holiday. If an employee works on a public holiday, they are entitled to an extra day's pay at the gross rate, in addition to their regular salary.

Maternity leave

Female employees are entitled to 16 weeks of paid maternity leave. Non-citizen children qualify the mother for 8 weeks under the Employment Act only.

Paternity leave

The current file states "male employees receive two weeks of paid paternity leave", but this has been updated. From 1 April 2025, Government-Paid Paternity Leave (GPPL) increased to 4 mandatory weeks.

Shared parental leave (new from April 2026)

Shared Parental Leave (SPL) sits on top of maternity and paternity leave, not inside it. Combined with 16 weeks of GPML and 4 weeks of GPPL, eligible parents can access up to 30 weeks of government-paid leave in their child's first year.

Childcare leave

Leave types, qualifying periods, and government-funding splits all differ depending on the employee's circumstances, so an employer hiring across Singapore needs to track each employee's leave balances and entitlements individually from day one.

Skuad supports leave administration across supported markets as part of the employment relationship, so your team does not need to track statutory leave rules independently.

Here is what Skuad helps with:

• Supports statutory leave entitlement tracking aligned with the employee's employment terms
• Facilitates maternity, paternity, and shared parental leave workflows, including government-paid leave claims through the registered entity
• Helps maintain leave records and payslip accuracy across 160+ countries from a single dashboard
• Assists with public holiday calendar management for each employee on the platform

What are the main payroll challenges in Singapore?

Singapore's payroll system splits obligations by employee type: citizens and permanent residents attract CPF at age-graded rates, foreign workers on passes attract Foreign Worker Levies instead, and independent contractors fall outside the statutory deduction framework entirely. That split creates three areas that trip up most foreign employers:

Payroll compliance

Singapore's payroll compliance burden sits primarily in CPF, and the most common errors are systematic rather than one-off.

Three compliance failures account for most of the risk:

• CPF age-band errors: Contribution rates step down at ages 55, 60, 65, and 70. An employee who crosses an age threshold mid-year needs their rate adjusted from that month forward. Applying the under-55 rate of 37 percent (combined) to a 56-year-old at 34 percent produces an over-deduction from the employee's salary every month it goes uncorrected.
• Ordinary Wage ceiling errors: The OW ceiling rose to $8,000 per month from January 2026. Payroll systems still running the previous ceiling of $7,400 will under-contribute for every employee earning between the two figures. Bonuses and variable pay fall under a separate Additional Wage (AW) ceiling of $102,000 per year, and miscalculating the AW cap is one of the most common errors on year-end reconciliation.
• Permanent resident graduated rates: First- and second-year permanent residents contribute at lower graduated CPF rates. Applying the full citizen rate from day one over-deducts from the employee and creates a reconciliation problem when the CPF Board's records do not match the employer's submissions.

Late CPF payment triggers 1.5 percent interest per month (18 percent annualised) from the day after the 14th-of-the-month deadline, with a minimum charge of $5. Fines of up to $5,000 and up to six months' imprisonment apply for first offences, rising to $10,000 and 12 months for repeat violations.

Skuad's Shield compliance module flags regulatory and contract risks across supported markets, so changes in contribution rates or wage ceilings surface before they create filing errors.

Misclassification

Misclassification in Singapore carries real financial exposure. MOM applies a substance-over-form test: if the company controls how, when, and where the work is done, provides the tools, and the worker depends on the company economically, the relationship is employment regardless of what the contract says.

If a contractor relationship is reclassified, the hiring company owes backdated employer CPF contributions at 17 percent for the full engagement period, plus 1.5 percent monthly interest, all accrued statutory leave entitlements (annual leave, sick leave, public holidays), and notice-period pay. Fines for misclassification can reach $5,000 to $60,000 per worker, and MOM publishes enforcement actions publicly.

There are also new guidelines for contract staff in Singapore that entitle them to employee benefits and statutory leave. These benefits apply to contract workers who have worked in the same firm for at least three months. Additionally, the Platform Workers Act, effective from January 2025, created a new worker category between employee and contractor, requiring mandatory CPF contributions for platform workers earning above $1,600 per month.

Skuad helps reduce that exposure. As the legal employer of record, Skuad holds the employment relationship, contracts, and statutory filings through a registered local entity. For legitimately independent engagements, Skuad's contractor management platform supports compliant agreements with built-in classification checks.

Here is what Skuad helps with:

• Assists with worker classification checks before onboarding, so the engagement model is set correctly at the start
• Supports locally compliant employment agreements and contractor agreements across 160+ countries
• Facilitates statutory registrations and filings through owned and partner entities in supported markets
• Helps track regulatory changes across supported markets so your contracts and filings stay current

Cost variation by employee type

Two employees doing the same job at the same gross salary can produce meaningfully different employer costs depending on their residency status.

A Singapore citizen earning $8,000 per month costs the employer an additional $1,360 in CPF alone. An Employment Pass holder at the same salary costs $20 in SDL. That difference of over $1,300 per month compounds across a team and across the year.

Total employment cost should be modelled per employee type before extending offers, not after. Skuad's employee cost calculator supports this by showing the employer-side breakdown for a Singapore hire before onboarding begins.

How to run payroll in Singapore without a local entity?

Setting up a Singapore Pte Ltd through ACRA requires appointing a resident director, maintaining a registered address, and registering separately with the CPF Board, IRAS, and MOM. The filing calendar it creates never stops: monthly CPF submissions by the 14th, SDL and Foreign Worker Levy payments, annual IR8A filings by 1 March, itemised payslips within three working days of each pay run, and two years of salary record retention for every employee.

Skuad supports that operational load in Singapore, covering employment contracts, statutory contributions, payroll in 70+ currencies, statutory benefits, and payroll record-keeping, so your team can spend its time on the hires themselves.

Companies across SaaS, logistics, e-commerce, and technology use Skuad to build Singapore teams, stay aligned with CPF, IRAS, and MOM requirements as rules change, and pay people accurately each cycle without local payroll infrastructure. With Skuad as your payroll partner, you no longer need multiple payroll systems operating across the world, and Skuad provides you with a single dashboard where you can view and analyze global payroll data across 160+ countries, including Singapore.

Book a demo to see how Skuad supports payroll for a Singapore hire without entity setup.

FAQs

1. How often is payroll run in Singapore?

Payroll in Singapore typically follows a monthly cycle. Under the Employment Act, employers must pay salaries at least once a month, no later than seven days after the salary period ends. Overtime wages must be paid within 14 days. Most employers transfer salaries by the 25th or the last working day.

2. What are the mandatory payroll contributions in Singapore?

Employers in Singapore generally contribute 17 percent of monthly wages to the Central Provident Fund (CPF) for citizens and permanent residents under 55, up to the $8,000 Ordinary Wage ceiling from 2026. The Skills Development Levy of 0.25 percent also applies to all employees, including foreign workers.

3. Is the 13th-month salary mandatory in Singapore?

A 13th-month salary is not mandated by Singapore law, though many employers pay an Annual Wage Supplement (AWS) equivalent to one month's salary as a year-end bonus. The AWS is contractual only where stated in the employment agreement or collective bargaining arrangement, and is usually pro-rated for partial-year service.

4. What is the CPF and how does it affect payroll in Singapore?

The Central Provident Fund (CPF) is Singapore's mandatory social security savings scheme, covering retirement, healthcare, and housing. Employers contribute monthly alongside employees, with combined rates of 37 percent for workers under 55 from 2026. CPF applies only to Singapore citizens and permanent residents, not foreign employees on work passes.

5. Can a foreign company run payroll in Singapore without a local entity?

Foreign companies can typically hire in Singapore through an employer of record (EOR) without setting up a local entity, since the EOR holds the legal employment relationship and manages CPF, SDL, and IRAS obligations. Registering an entity requires CPF Board and IRAS registrations before the first payroll run.

6. What must a Singapore payslip include?

Under the Employment Act, employers must issue itemised payslips showing basic salary, allowances, overtime pay, deductions such as CPF and SDL contributions, and the final net amount paid. Payslips must be provided with each salary payment or within three working days, in either hard or soft copy format.