Payroll management in Singapore
The South-East Asia region carries with it some of the most promising and advanced nations globally. One of them is Singapore, and with a population of just more than five million and the fourth largest per-capita income globally, it is safe to say that Singapore is home to opportunities.
Thanks to seamless financial systems set by the government, it is very easy to do business here. The government plays little or no role at all in sieving those who wish to enter or exit the market and this low entry barrier attracts thousands of prospective business owners yearly.
Payroll is the official financial record of salaries, wages, bonuses, commissions, deductions, tax reliefs, and allowances accorded to the employee. Firms in Singapore are only allowed seven days after the lapse of the payment period to finish processing the payrolls. Therefore, it is important for your company to have a good payroll system in Singapore.
Importance of payroll management
The company’s payroll system Singapore management is only as successful as its management. Usually, this requires the two departments – human resource and finance to run seamlessly to avoid stalling and friction during payroll processing.
To ensure compliance, timely planning and budgeting, the company is expected to provide accurate and on-time processing, maintenance, and reporting of the payroll.
The company’s payroll system in Singapore needs to be transparent. Also, the payroll software Singapore system should provide adequate information to both parties for accurate data to be generated.
It is settling to know that third-party service providers also have a role to play in the payroll system’s management and execution. While it would be easier for small companies to organize and report their payrolls, the same cannot be said about those large firms with hundreds of employees, each one having their own reconciled pay-slip. This may cause the firm to employ staff on regular in-house pay for this function.
However, the SMEs may be slightly disadvantaged because they may not be able to afford such extra expenses; hence the introduction of outsourcing for this function. Most entrepreneurs choose to employ third-party companies that offer payroll services in Singapore to manage and process all payroll-related matters.
What is payroll outsourcing?
The payroll outsourcing process involves hiring another company that specializes in payroll processing to complete the task on your behalf. Many companies prefer employing payroll services in Singapore for the benefits we will mention later.
Services offered by third-party companies include; computing the payroll, processing retirement, resignation, or termination, acquisition of new talent or staff, preparing and filing CPF contributions, filing annual income, submitting IR8A and IR21 forms for income taxes, preparing pay-slips, and developing custom and standard reports.
Typically, such processes may take many days for you to complete as they require high levels of accuracy and precision. Therefore, some companies opt to use software that is specially developed for this. These software are able to manage the company’s payroll system in Singapore efficiently, but are a costly investment.
Moreover, some have their reservations about the technology and would instead do it manually. Whether costs or time is your challenge, the government expects you to adhere to the set guidelines without fail.
How is payroll management in Singapore done?
It would be simpler if you only had to worry about the employees and what they earned.
However, the system as you have seen above requires more than just employee salaries.
There are many other factors such as taxation and reporting obligations that make the process harrowing.
Nevertheless, you need to know the following information. It is pivotal to understand the importance that a payroll system plays in business operations.
The Singapore employment act stipulates that salary is the entire enumeration accorded to an employee, including all allowances as agreed in the employment deed. However, it does not constitute additional payments such as overtime, bonuses, or wage supplements (service).
Also, any reimbursements made towards covering for an expense, productivity incentives, and food, travelling allowances and housing are not categorized as salary. These payments are considered monthly and will be factored into the payroll of each employee.
Payroll statutory contributions
Here, you have several contributions to consider, including the Central Provident Fund, the Ethnic Fund, Foreign Workers Levy, Skill Development Levy, and the National Service.
You need to consider reporting income and filing tax returns in time. This includes the nationals and the foreigners, whether residents or not. Read more on this subject and IRAS regulations for clarity.
Other elements in this process involve the compensations and payments due for overtime and annual benefits mentioned above as salary exclusions.
Benefits of outsourcing payroll services
Outsourcing involves hiring of an independent organization that specializes in the field of payroll processing and management. These companies offer highly efficient and affordable payroll services in Singapore, and can help your company set up your own payroll system. Here are some of the advantages they bring to the table.
Help to maintain control
A third-party service provider will follow all stipulated governmental regulations with due diligence and regulations. You are able to communicate your company policies and requirements to the payroll services in Singapore, and they are able to follow the needs of firms. Thus, your company will still be in control of the whole payroll management process.
Hiring helps you to forego the costs of employing, training and paying staff for this exercise.
Third party service providers have a reputation to maintain. Therefore, they will opt to use high performing technology in order to complete your company’s payroll management accurately and efficiently. There will be little to no mistakes made in your company’s payroll system in Singapore.
Hiring a payroll service in Singapore helps you check if there are any forms of fraudulent deals committed in your payroll system. They allow you to catch possible errors and mistakes before they come to the attention of the government.
Filing late returns and reporting finances late attracts fines and penalties. A good payroll service in Singapore will process your employees’ payrolls in a timely manner and ensure that your company does not get penalized for late returns.
The bottom line
As a company grows, its number of employees will increase as well, making processing payroll substantially more difficult. Without a proper payroll system in Singapore, it will be difficult for your company to manage your employees’ salaries and returns effectively. This may not only affect your relationship with your staff, but late returns could potentially get you in trouble with the law as well.
If you find yourself unable to keep up with processing all of your employees’ payroll, it would be much more efficient to hire a competent payroll service in Singapore to help rather than defaulting. Third party payroll services in Singapore can not only help you set up and manage your company’s payroll management system, but they also make the process much more cost effective and hassle free.