Sleek payroll services
3 minute read
At Sleek, we’ve simplified accounting for you. No more nightmares when it comes to deadlines or a huge pile of paper! Say hello to hassle-free payroll services with us. Our payroll service has the following included:
- Monthly payroll report (including payslips)
- Annual IR8A Preparation
- IR21 Tax Clearance
- Central Provident Fund (CPF) submission
- Skills Development Levy (SDL) processing
If you are confused about the terms stated above, worry not because we have explained each and every point below. Enjoy reading 🙂
Monthly payroll report
A payroll report is a quick way to see the payroll totals by employees for a specific period of time. This report shows the summary of payroll items with a subtotal for net pay, deductions and other payroll adjustment.
Monthly payslips
Under the Employment Act, all employers are required to provide payslips to all employees. You usually receive your payslip along with your monthly salary or within three working days after payment. If you are paying your employees more than once a month, you can choose to consolidate your payslips. Payslips can either be soft or hard copy.
Your monthly payslip should include the following information listed below:
- Full name of Employer
- Full name of Employee
- Date of payment
- Basic monthly salary
- The time frame of each salary period
- Allowances such as transport, meal or other ad-hoc allowances
- Any additional payments (bonuses, overtime, leave pay etc)
- Deductions such as CPF contribution, SHG and others
- Net salary in total
Annual IR8A
By law [S68(2) of the Income Tax Act], all employers are required to prepare Form IR8A for employees who have been employed in Singapore by 1 March, every year. IR8A contains all the information on employees’ earnings. Employers may also be required to file Appendix 8A, 8B and IR8S.
When the financial statements are prepared, the accounting books must be prepared for the next financial year. This involves clearing out the income and expenditure in the general ledger. The net income/loss is then transferred to the owner’s equity account.
Does the employer have to prepare IR8A for?
IR8A form has to be completed and submitted for all employees that fall in the categories listed below:
- Full-time resident employee
- Part-time resident employee
- Non-resident employee (including those who are based overseas and are required to provide services in Singapore during the year
- Company director (this includes non-resident director as well)
- Board members receiving board/committee member fees
- Pensioner
- An employee who left the company but was in receipt of income in the year before
Auto Inclusion Scheme (AIS)
If you get your payroll services via Sleek, we will help your company to register via Auto Inclusion Scheme (AIS). Through this scheme, Sleek will directly submit employees’ income information to IRAS portal electronically by 1 March, every year. This simplifies the whole process! The information that is submitted will then be shown on the employees’ electronic tax return and automatically included in their income tax assessment upon log in to IRAS using individual Singpass account.
IR21
When your non-Singapore Citizen employee (eg: foreign or Singapore PR employee) ends employment with you in Singapore, goes on an overseas posting or has decided to leave Singapore for more than 3 months, employers are required to seek tax clearance for him/her. Employers then have to submit Form IR21 to IRAS.
Take note that employers have to inform IRAS at least 1 month in advance by filing form IR21 and also withhold all monies due to employees from the date they are aware of your imminent cessation of employment or departure from Singapore. This whole process is called – Tax clearance.
How long does the process take?
80% of IR21 forms e-filed will be processed within 7 working days. For paper filing, 80% of the forms are processed within 21 days. The process can take a longer time if the form has been incorrectly filed.
Central Provident Fund (CPF) submission
The CPF is a mandatory social security savings scheme funded by contributions from employers and employees. Every employer in Singapore has to make CPF contributions for its employees at the monthly rates stated in the CPF Act. This is done by deducting a certain amount from their salary.
Which employees require CPF contributions?
Employers have to pay CPF contributions for employees who are Singapore Citizens or Singapore permanent residents (SPRs). The following employees listed below are also eligible:
- Company directors
- Part-time employees
- Operationally Ready NSmen in-camp training
- Family members of the business owners if they are receiving a salary for the work being done for the owner
- An employee who is concurrently employed by another employer
CPF rates and deadlines
The current CPF rates are as stated below. Due date for the CPF contribution is on the last day of the calendar month, however employers are given a grace period of another 14 days to make payment.
| Employee’s age (years) | Contribution Rates from 1 Jan 2016 (for monthly wages ≥ $750) | ||
By Employer (% of wage) | By Employee (% of wage) | Total (% of wage) | |
| 55 and below | 17 | 20 | 37 |
| Above 55 to 60 | 13 | 13 | 26 |
| Above 60 to 65 | 9 | 7.5 | 16.5 |
| Above 60 | 7.5 | 5 | 12.5 |
| Employee’s age (years) | Contribution Rates from 1 Jan 2016 (for pensionable wage component only) | ||
By Employer (% of wage) | By Employee (% of wage) | Total (% of wage) | |
| 55 and below | 12.5 | 15 | 27.75 |
| Above 55 to 60 | 9.75 | 9.75 | 19.5 |
| Above 60 to 65 | 6.75 | 5.625 | 12.375 |
| Above 60 | 5.625 | 3.75 | 9.375 |
Take note: These compulsory CPF contributions to employees are not taxable.
What if an employer makes a late payment?
If an employer makes a late payment, there will be a late payment charged at 18% per annum (1.5% each month) or minimum interest payable is $5 per month.
How can you make the payment?
Employers can either pay CPF contributions or the below mode of payments:
- Pay employees’ CPF contributions as an employer using Direct Debit Authorisation (Form DDA (BIZ))
- Standing instructions
- eNets
- Cheques (Should be payable to ‘CPF Board’, the reverse side of each cheque must bear the CPF submission Number (CSN) and be sent to:
Central Provident Fund Board
Robinson Road
P.O. Box 3060
Singapore 905060
- Cash/NETS/CashCard at any Singapore Post Office
- Diners Club card/NETS at any AXS Stations
Skills Development Levy (SDL) processing
Just like CPF, employers are required to pay SDL to all employees who are rendering services in Singapore like Singapore Citizens, SPRs and also including the following – foreign employees and employees who are working part-time or on a temporary basis. The SDL collected will be used to support workforce upgrading programmes and training grants.
The SDL for foreign employees is in addition to the Foreign Worker Levy that is payable to the Ministry of Manpower (MOM).
How do you calculate the amount that has to be paid?
To compute the SDL payable for your employees, refer to the table below.
SDL rate is 0.25% of employees salary or a minimum of $2 (for salary less than $800 a month) and a maximum of $11.25 (for salary more than $4,500 a month).
| Employee | Total wages for the calendar month | SDL Payable |
| A | $609.50 | $2 |
| B | $2,000 | $5 |
| C | $4,500 | $11.25 |
| D | $4,502.03 | $11.25 (Maximum of $11.25 is payable because the total wages is more than $4.500) |
| E | $10,000 | $11.25 (Maximum of $11.25 is payable because the total wages is more than $4.500) |
| Total SDL | $40.75 | |
| Total SDL payable | $40 (Rounded down to the nearest dollar) | |
How can you make the payment?
Employers can either pay SDL together with employees’ monthly CPF contributions and for foreign employees, they can make the payment directly to the SkillsFuture Singapore Agency (SSG).
Next steps
While busy running your business, it is better to offload your mandatory requirements to a company like Sleek. Our team of experts can fulfil all of the above requirements smoothly and make sure everything is filed on time so you can avoid the penalties. If you are ready to get started, contact us!
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