Whether a business is small or large operating in Singapore, an optimised payroll system can provide a variety of benefits such as better fulfilling your employers’ responsibilities or being more efficient with your business’s financial issues.
Let’s look at a few things that help to organise an efficient payroll system for your organisation with operations in Singapore:
1. Employee or independent payroll provider
Hiring the full-time HR personal or independent payroll processing provider can have a significant difference in the way your monthly payroll is handled.
For this reason, it helps to know which will make up most of your active workforce.
Technically speaking, this can impact your legal obligations, benefits payable and taxes in Singapore.
2. Employee information
To complete all relevant required monthly and annual paperwork – the payroll team will ensure all information is updated in the payroll records as required by the Ministry of Manpower (MOM).
Do note that there are mandatory requirements with effect from April 2016 to maintain existing and past employees’ records for two years and to issue key employment terms (KET) in writing.
3. Period of pay
In Singapore, the time of pay for your employees can vary and often closely matches your business model and the Singapore industry practice.
This may involve paying employees on a weekly, monthly or bi-monthly basis.
4. Terms of compensation
In Singapore, it is critical to have written procedures in place to assist with employees' terms of compensation, such as to keep track of work hours, periods of paid time-off, annual leave, urgent leave, etc.
Also, matters like overtime payment computation and other variables (if any) should be considered in the payroll calculation process.
There are other important areas like Central Provident Funds (CPF) payments that require careful calculations as there is a different percentage for each age band, each type of CPF accounts, permanent residents and to keep up with latest changes in CPF contribution rates.
Also, the terms of compensation will vary with the different type of the employees.
5. Payroll software
In Singapore, the payroll system must have the ability to provide detailed and accurate information and keep up with the latest updates from CPF and MOM.
Payroll operations are either outsourced to a third-party payroll service team or prepared by in-house HR team.
A smart option is the online cloud-based payroll software that has computations and defined processes to simplify the entire payroll calculation process.
6. Running the payroll
When the appropriate payroll system/software is in place, you have the option to personally use it yourself or engage a monthly accounting service to take on the responsibility of this important and often time-consuming work.
7. Record keeping
Keeping record is mandatory in Singapore with records of each employee stored for minimum two years, and this also applies to employees that have left your company.
By staying record-savvy, it will be possible to comply with any requests by relevant government agencies for access to existing and past employee records.
8. Reporting annual taxes to IRAS
Reporting taxes is an essential process that must be declared to the appropriate government department on a yearly basis.
In the process of dealing with all aspects of personal income tax, it is crucial to maintaining a high level of accuracy and transparency at all times.
In summary, putting in place, the right payroll system increases the ability to account for every dollar paid out to employees.
All records should be kept on file for the relevant time-frame, and also assist with organising the taxes.
The modern option of using online payroll software is certain to appeal to many and gives a great return on the initial investment.
A well-chosen payroll system or a trusted third party payroll processing team means a company will see growth in future operations, employees will be happy, and everything will run smoothly.
Contact our payroll service team for advice today.