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What are the Statutory Payroll Contributions in Singapore?

Central Provident Fund (CPF)

The CPF is made up of funds contributed by both the employees and employers in Singapore.

Statutory Payroll Contributions Singapore | Specialised Payroll TeamThis means that an employee that is either a Singapore Permanent Resident (SPR) or is a Singapore Citizen, and their employers must contribute to the CPF fund at the rates set out by the CPF board.

When calculating CPF, ordinary wages are referred to as "OW", and additional wages are referred to as "AW".

The definition of Ordinary wages is wages that are paid in whole and relate exclusively to the employee’s work for that month and is to be paid before the CPF contributions are due for that month.

The definition of additional wages is, amounts paid on an ad-hoc or internal basis, like bonuses and incentives.

There is a ceiling for CPF contributions. The current ceiling is SGD 6,000 per month for OW salary. However, the ceiling for AW contributions is calculated using a formula.

The onus is on the employer to pay both the employee's and the employer's CPF contributions for the month.

This contribution is due 14 days after the end of the month that the CPF contributions are due.

Ethnic Fund

An ethnic fund contribution is required by the employee based on the employee's ethnicity.

This contribution is deducted from the employee's salary each month and is distributed to the respective ethnic group welfare fund.

Skill Development Levy (SDL)

Whether an employee is on a full-time, part-time, casual, or foreign worker basis, employers have to contribute a skill development levy for all staff.

The SDL is not to be deducted from the employee's remuneration.

Grants will be provided to employers who send their staff in training courses. The money for this comes from the Skills Development Fund (SDF) which accumulates the levy.

The calculation of the levy is variable and depends on the employee' salary. A 0.25% levy is applied to the first SGD 4,500 of the gross monthly remuneration with a minimum of SGD 2, whichever amount is higher at the time of calculation.

The gross monthly remuneration means, any wage, bonus, commission, salary, overtime pay, leave pay, additional allowances (like housing, meal allowances or similar) or any other payments in cash.

A SGD 11.25 levy is to be paid for the gross monthly remunerations over there amount of SGD 4,500.

Foreign Workers Levy (FWL)

Employers are required to pay levies if they hire foreign workers who hold work permits or S passes.

FWL is a levy imposed on the administration of foreign workers who hold work permits by the Ministry of manpower government department.

Both, the worker’s qualifications and the sector that the employer operates in will determine the levy amount to be paid.

National Service (NS)

Every Singaporean male citizen who has reached the age of 18 must sign up for national service. This also goes for second-generation permanent residents.

After completing the period of full-time service, the conscript becomes operationally ready.

This means that he will become an NS reservist and may be called upon to undergo training or NS tasks periodically.

Companies who employ NS staff are not required to pay for the time their NS employee's spend fulfilling NS duties.

They deduct the appropriate amount from their monthly salary though; they are still required to contribute to the CPF of these employees.

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