Payroll-related matters in Singapore are regulated by the Employment Act (EA). The EA is applicable to all employees, regardless of nationality, who work under a contract of service. However, it excludes seamen, domestic workers, and individuals employed by statutory boards and the government. All employees under a contract of service with an employer are covered by the Employment Act, except for managers or executives, who are not protected by the provisions in Part IV of the Act. Since April 1, 2019, Employment Claims Tribunals have been responsible for handling wrongful dismissal cases instead of the Ministry of Manpower (MOM).
Salary, in this context, refers to remuneration and comprises allowances mutually agreed upon between the employer and employee in the contract of service or employment agreement. It encompasses basic pay, incentives, commissions, bonuses, and allowances. It is important to emphasize that Singapore does not have a minimum wage law. The salary is determined through negotiation between the employer and employee, but some exceptions exist, particularly for foreigners under various Work Passes, who must meet specific minimum salary criteria to qualify. Moreover, certain industries, such as cleaning, security, and landscape, have mandated minimum salary requirements for their workers, and the cleaning sector follows the Progressive Wage Model.
Payment frequency is typically once a month, and it must occur within seven days after the end of the salary period. Overtime payments should be made within 14 days from the end of the salary period. However, there are exceptions to this rule, such as in cases of dismissal or resignation by the employee.
Salaries must be paid on a working day and during working hours at the workplace or any other mutually agreed-upon location. Employees may also receive their salaries in their personal or joint bank accounts.
As of April 1, 2016, employers are required to provide itemized pay slips to all employees covered under the EA. These pay slips should be given together with the salary payment or within three days after the payment date. The pay slips must include specific details, such as the names of the employer and employee, payment date, basic salary, salary period (start and end date), allowances, additional pay like bonuses and public holiday pay, deductions, overtime hours worked, overtime pay, and the start and end date of the overtime pay period if different from the salary period.
Employers are obligated to maintain records of pay slips, either in soft or hard copies, for their current employees for the latest two years and for former employees for one year after they leave employment. Additionally, employers must keep records of employee information, including addresses, NRIC numbers or Work Pass numbers with expiry dates, gender, dates of employment commencement and termination, working hours (including break duration), dates of leave taken, public holidays, and authorized deductions. Deductions can only be made for reasons allowed by the act or if ordered by the court.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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