Employee Salary: Calculations, Deductions, Unpaid Salary & More

Last updated on January 17, 2020

businessman jumping out of joy on pay day

What is Salary?

In Singapore, salary payments are governed by the Employment Act (EA). The EA covers all employees in Singapore except for seafarers, domestic workers and public servants. These groups are protected through other regulations.

Under the EA, a salary is defined as all remuneration, including allowances, payable to an employee for the work done under a contract of service. However, the following items are not considered part of your salary:

  1. Cost of accommodations, electricity, water or medical bills;
  2. Contributions to any pension or provident fund made by your employer;
  3. Travel allowances;
  4. Reimbursements for special expenses incurred during employment;
  5. Any sum payable on discharge from employment or retirement; and
  6. Any retrenchment benefits.

In Singapore, salary should be paid in legal tender. This means that your salary must be in fiat money, whether by cheque or a direct transfer into your account. Your salary cannot be paid in the form of meals, accommodation, allowances or privileges.

However, this does not mean that your employer cannot provide you with these benefits in addition to your wages.

Is there a Minimum Wage in Singapore? 

There is no minimum wage in Singapore. Your salary amount is a matter of negotiation between your employer and yourself or your trade union.

By When Must Your Salary be Paid? 

Your salary must be paid within 7 days after the end of the salary period. Salary for overtime work must be paid within 14 days after the end of the salary period.

A salary period refers to the period in which the salary that you earned is payable. Typically, a salary period is a month. However, the EA allows an employer to fix any salary period it desires so long as the salary period does not exceed 1 month.

For example, if your salary period is fixed on 30 January 2020, your salary must be paid to you latest by 6 February 2020 and your overtime salary by 13 February 2020.

If you resigned or were dismissed from employment, the date of the final salary payment will depend on the circumstances of your departure from the company.

  1. If you were dismissed for misconduct, you must be paid on your last day of work or within 3 working days of dismissal.
  2. If you resigned and served your required notice period, you must be paid on your last day of work.
  3. If you resigned and did not serve your required notice period, you must be paid within 7 days of your last day at work.

How is Salary Calculated?

An employee’s salary should generally be calculated according to his or her salary period. For example, if the salary period is 1 month, then the employee should be paid 1 month’s worth of salary.

However, there are instances when monthly-rated employees may not be able to work during the whole of their salary period. For example, when a new employee starts work in the middle of the month or was on unpaid leave.

In such circumstances, the EA provides that such employees only be paid for the number of days that they work in that month. Thus, the salary is calculated according to the following formula:

Gross Monthly Pay

(Your monthly pay excluding any allowances, reimbursements and overtime, bonus and productivity incentives)


x

Number of days worked that month

(Includes public holidays, paid hospitalisation and annual leave)

Total number of working days in the month

(Excludes rest days, but includes public holidays)

If the employee had worked for less than 5 hours on that day, that day is to be considered half a working day and should be counted as 0.5 per half day worked.

The Ministry of Manpower (MOM) has provided a handy calculator to help you calculate your pay for an incomplete month of work.

There are also situations when you may need to know your daily rate of pay. These situations are described, along with the methodology used to calculate the daily rates, below:

  1. Basic rate of pay method: This is used for calculating salary for work on a public holiday or rest day and excludes allowances, reimbursements or overtime, bonus and productivity incentive payments.
  2. Gross rate of pay method: This is used for calculating salary in lieu of notice of termination of service, salary in lieu of annual leave, paid public holidays, approved paid leave or deductions for unauthorised absence from work. This includes allowances, but excludes travel, food and housing allowances, reimbursements or overtime, bonus and productivity incentives payments.

To calculate your daily rate of pay using either method, you must use the following formula:

12 x monthly basic or gross rate of pay


52 x average number of days an employee is required to work in a week

Will There be Any Deductions from My Salary? 

Your employer is not allowed to deduct any salary from you unless it is:

  1. Authorised by the EA;
  2. An order by the court or any other competent authority; or
  3. For the recovery of any income, property or Goods and Services Tax (GST).

The EA permits your employer to make deductions for:

  1. Any unpaid absence from work;
  2. Damage or loss to any goods which the employee is responsible for;
  3. The supply of accommodation, amenities or any other services (with your written consent);
  4. Any advance of salary, loans, or other unearned employment benefits;
  5. CPF contributions;
  6. Any payment to a registered cooperative society made on your behalf (with your written consent); and
  7. Any other deductions for which you have given consent.

If you are a foreign worker, your employer is not allowed to deduct from your salary for any reason unless it has your written consent and has informed MOM of the change in your salary. Further, your employer is not allowed the following deductions for any of the following reasons even if you have consented to them:

  1. As a condition of your employment or continuing employment; or
  2. For costs related to your employment, such as work pass renewal, security bond, medical insurance, repatriation costs, compulsory training, medical fees or levy payments.

Is there a limit on the amount of salary to be deducted?

The EA prevents your employer from deducting more than 50% of your salary in any one salary period. However, this limit does not apply to deductions:

  • For absence from work;
  • For the recovery of advances, loans or unearned employment benefits;
  • For payments made to registered co-operative societies;
  • Made to your final salary in the event of termination of employment.

Must My Employer Issue Me an Itemised Payslip? 

All employers are required to provide an itemised payslip, whether in soft or hard copy, and must be provided within 3 working days of salary payment at the latest. The itemised payslip should include the following items, unless they do not apply to you:

  1. Employer’s and employee’s full name;
  2. Date of payment;
  3. Basic salary;
  4. Start and end date of the salary period;
  5. Any allowances paid during the salary period;
  6. Additional payments, such as bonuses, rest day pay or public holiday pay;
  7. Any deductions;
  8. Overtime hours worked and overtime pay;
  9. Start and end date of the overtime payment period (if different from that of the salary period); and
  10. Total net salary paid.

What Can I Do If My Employer…

1. Refused to pay me my agreed salary or made late salary payment?      

Non-payment of salary is an offence under the EA. An employer who refuses to pay salary can be fined between S$3,000 and S$15,000, or jailed for 6 months, or both. These maximum penalties are doubled if your employer is a repeat offender.

Further, you can claim for your unpaid salary through the Tripartite Alliance for Dispute Management (TADM) or approach your union for help. The TADM provides mediation and advisory services for salary-related claims, amongst other types of claims.

You should file your claim early as there is a limit of S$20,000 per claim or S$30,000 for claims by union members with their union’s assistance. Should you delay filing the claim, and therefore allow your unpaid salary to accumulate, you might exceed this limit and will have to forego any excess.

If you are still employed by the same employer, you can claim within 1 year of the non-payment. Otherwise, the claim must be filed within 6 months from your last day of work.

2. Made an unauthorised deduction from my salary?

If your employer has made an unauthorised deduction and you are an employee covered by the EA, you should claim for the unauthorised deduction through TADM.

For more information on the procedure for bringing a claim to TADM, please refer to our article on getting help for employment disputes.

Our salaries enable us to put food on the table, maintain a roof over our heads, and pay our bills. If you are in a salary dispute with your employer, you may wish to approach the Tripartite Alliance for Dispute Management or one of our employment lawyers for advice on claiming any salary owed to you.

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