How to Issue Payslips to Your Employees in Singapore
Since 1 April 2016, all Singapore employers have been required to issue itemised payslips to all employees covered under the Employment Act. If you are a business owner in Singapore who has just begun hiring staff, you may want to know more about preparing payslips for issuing to them.
This article will explain:
- What itemised payslips are
- When to issue itemised payslips
- What itemised payslips should contain
- How to generate itemised payslips
- Whether you should keep a record of itemised payslips
What is an Itemised Payslip?
An itemised payslip is a document that states what your employees’ pay consists of. Payslips need to include information such as your employee’s basic pay, overtime pay, bonuses, Central Provident Fund (CPF) deductions and other salary-related matters. An itemised payslip can therefore be used to provide proof of salary amounts and payment.
Issuing payslips (and abiding by the strict requirements when doing so, which will be covered in more detail later) may seem like more work for businesses and Human Resources departments. However, by breaking down their employees’ salary in a standardised payslip, employers are able to give employees a sense of security and assurance for being paid fairly. This may translate into more trust and confidence in their employers such that the employees would want to continue working with their employers.
Moreover, since all the important monetary information relating to the employee’s salaries and benefits is stated clearly in the payslip, employers may also receive fewer salary complaints from employees, or be able to resolve such complaints quicker.
For example, an employee may file a salary complaint if he/she feels that there has been an unfair deduction in her salary. However, being able to produce a payslip that shows the proper breakdown of the salary deductions may help to resolve the dispute amicably.
Are You Required to Give Your Employees Payslips in Singapore?
It is compulsory for you to issue itemised payslips to your employees in Singapore if they are covered under the Employment Act. Employees are people working under a contract of service, and they include both local and foreign employees. However, seafarers, domestic workers, statutory board employees and civil servants are not covered under the Employment Act, and you are hence not required to issue itemised payslips to them.
You must issue the payslips together with the salary or payment given to your employee. If you are unable to issue the payslip and salary together, then you must give the payslip within 3 working days of issuing the salary. If you are going to, or have terminated or dismissed your employee, then you must give your employee his or her payslip together with the outstanding salary.
If you fail to provide itemised payslips, the Ministry of Manpower (MOM) can order you to do so. Alternatively, or on top of that, you may be given a financial penalty of $100 to $200 per occurrence of non-compliance.
It is also an offence under the Employment Act to:
- Not provide itemised payslips within the timeframe stated above, regardless of whether this had been intentional.
- Failure to provide an accurate or complete payslip, regardless of whether this had been intentional.
Hence, apart from having to pay the financial penalties stated above, you may also be charged in court for an offence if you fail to provide accurate payslips in a timely manner. If found guilty, you may be liable to a fine of up to $5,000 and/or a jail term of up to 6 months for each offence. For every day that you fail to produce the itemised payslip or rectify an inaccurate one, you may be liable to a further fine of up to $500.
What Should the Payslips Contain?
There is no prescribed form for payslips, and they can be in either hardcopy (including handwritten payslips) or softcopy format. However, softcopy payslips must be accessible and useable by the employee if he or she wishes to refer to it subsequently. In addition, you are legally required to include the following 12 details in the payslips:
- The employer’s full name;
- Your employee’s full name;
- Date of payment (or dates, if the payslips consolidate multiple payments);
- Basic salary (for hourly, daily or piece-rated workers, indicate the basic rate of pay, e.g. $X per hour, and the total number of hours or days worked or pieces produced);
- Start and end date of salary period;
- Allowances paid for salary period, such as all fixed allowances, e.g. transport, and all ad-hoc allowances, e.g. one-off uniform allowance);
- Any other additional payment for each salary period, such as bonuses, rest day pay and public holiday pay;
- Deductions made for each salary period, such as all fixed deductions (e.g. employee’s CPF contribution), and all ad-hoc deductions (e.g. deductions for no-pay leave, absence from work);
- Overtime hours worked;
- Overtime pay;
- Start and end date of overtime payment period (if different from number 5 on start and end date of salary period); and
- Net salary paid in total.
How Can You Generate a Payslip?
You may wish to use the payslip template provided by MOM and generate your payslips manually. However, a more convenient alternative would be to invest in software that can help to automate the process of generating and sending payslips.
If you are afraid that such software may be expensive, you may look into applying for the Productivity Solutions Grant (PSG) to defray their costs. Generally, to apply for the PSG, your business would need to be registered and operating in Singapore. The software intended to be purchased, or subscribed to by your business must also be used in Singapore. More information can be found on the PSG website.
Do You Have to Keep Records of All Payslips Issued?
You are required to keep records of itemised payslips for current employees for the latest 2 years. For former employees, you need to keep the last 2 years of records for 1 year after their last day of employment.
It is compulsory to issue itemised payslips, and the payslips must be both complete and accurate (containing all 12 legally required details). Failure to do so can constitute an offence. You may also want to make use of PSG to cover the costs of any software you may decide to invest in for generating and sending payslips. Remember to keep records of your payslips for at least 2 years as well.
As an employer, apart from abiding by the requirement to provide payslips, you are also legally obliged to follow other employment laws in Singapore. These laws include following the terms in the employment contract, such as paying your employees the correct amount on time, providing the agreed employee benefits and terminating your employees fairly and with the required notice.
You may wish to consult an employment lawyer if you need legal advice on complying with employment laws. In the event of a dispute, an employment lawyer can also advise you on the terms in the employment contract and on how to resolve legal claims against your business from your employees.
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