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Off-in-lieu guide for employers in Singapore

Are you confused about off-in-lieu and unsure about your obligations as an employer? In this guide, we'll cover all you need to know about off-in-lieu in Singapore, including what it is, who is entitled to it, and how to calculate it for each of your employees. We'll also introduce you to Payboy's leave management system, which makes tracking off-in-lieu and other leave types a breeze!

What is off-in-lieu?

"Off-in-lieu" or "time off-in-lieu" is a term used to describe a type of compensatory time off given to an employee in lieu of overtime pay. It means that if an employee works extra hours beyond their regular working hours, they can take the equivalent time off at a later date instead of being paid overtime for those extra hours worked. The time off-in-lieu is usually granted at the discretion of the employer and is subject to specific rules and regulations regarding compensation and working hours.

Who is entitled to off-in-lieu in Singapore?

Off-in-lieu is primarily for employees not covered under Part IV of Employment Act and depends on a mutual agreement between the employer and employee. Policies for off-in-lieu may vary depending on whether an employee works on public holidays, rest days, or overtime.

In contrast, employees covered under Part IV of Employment Employment Act are entitled to additional pay rather than off-in-lieu for work performed beyond contractual or legal hours, including public holidays and rest days. This specifically applies to:

  • Employees governed by Part IV provisions (i.e., non-managerial and non-executive roles),
  • Workmen (doing manual labour) with a monthly basic salary of S$4,500 or less.
  • Non-workmen with a monthly basic salary of S$2,600 or less

Does an employee get off-in-lieu if a rest day or public holiday falls on a non-working day?

In accordance with the Employment Act, if a public holiday falls on a non-working day, your employees are entitled to another day off or one extra day's salary in lieu of the public holiday at the gross rate of pay. 

For instance, if your employees work a 5-day week and the public holiday falls on a Saturday, they should receive a day off-in-lieu or salary-in-lieu. If the public holiday falls on a Sunday, the following working day, Monday, will automatically be a paid public holiday.

For employees who are not covered by the Employment Act, it will be according to the terms of their employment contract.

Can I provide time off-in-lieu if my employee works on a public holiday?

If your employees are covered under Part IV of the Employment Act and work on a public holiday, they're entitled to an additional day's pay or a public holiday in lieu.

However, for employees not covered under Part IV, you have the option to offer time off-in-lieu instead, provided there's mutual agreement.

How to calculate public holiday pay?

Pay for working on a public holiday =
(12 x Monthly gross rate of pay x Public holidays worked on) / (52 x Average number of work days in a week)

For example:
Employee A's monthly gross rate of pay is S$3,000 and the number of work days in a week is 5. There are 11 public holidays in a year, and Employee A worked on 2 public holidays in April.

Using the above formula, the calculation for Employee A's pay for working on public holidays would be:

(12 x S$3,000 x 2) / (52 x 5) = S$276.92

In this scenario, Employee A would receive an additional S$276.92 for working on the two public holidays.

Tip: Learn more about public holiday pay with our comprehensive “Public holiday pay guide for employers in Singapore”!

How to calculate time off in lieu for employees not covered under Part IV of Employment Act?

If your employees aren't covered under Part IV of the Employment Act, you have flexibility in granting time off in lieu for working on public holidays. This can be agreed upon mutually, with options including paying extra salary for a day's work, granting time off equivalent to hours worked, or providing a full day off for longer shifts.

If there is no mutual agreement on the duration of time off in lieu, you can decide on one of the following:

  • Pay an extra day’s salary at the basic rate of pay for one day’s work.
  • For working 4 hours or less on a holiday, grant time off in lieu of 4 hours on a working day.
  • For working more than 4 hours on a holiday, grant a full day off on a working day.

Simplify employee leave tracking, such as off-in-lieu with Payboy’s leave management system!

Small and medium-sized enterprises (SMEs) often find leave management to be a pain point, and we can understand why:

  • SMEs don’t have as many HR resources as larger businesses. As a result, they often have to rely on manual leave processes, which can be both time-consuming and error-prone.
  • SMEs often have a smaller pool of employees to choose from when someone goes on leave. This can lead to disruptions in workflow and decreased productivity.

If leave isn't managed properly, it can have a negative impact on productivity and morale. Therefore, good HR software is an essential tool for any business that wants to stay on top of its leave entitlements and ensure its employees are getting the rest they deserve. 

Here are some benefits of using our leave management module:

Manage leaves digitally

Our leave management module is designed to streamline the leave management process, making it easy for employees to apply for leave and check leave balances, as well as for employers to approve and manage leave requests.

Employees can also easily submit supporting documents or certificates via the mobile app, so that all the documents are stored in a central database. No more missing documents!

Sync seamlessly with Shift Scheduling and Payroll Processing modules

Shift scheduling and payroll calculation can be time-consuming and stressful while managing different leave types and requests. With Payboy HR software, when leaves are approved, the employee’s availability will be automatically updated in the Shift Scheduling module, and any encashed or unpaid leave will be calculated in the Payroll Processing module

Customise the leave policy that best fits your business needs

We'll provide you with a MOM-compliant setup to start with, but we are also ready to assist you in customising your leave policy to fit your business requirements. Check out how to customise settings for each leave type with Payboy, including off-in-lieu for public holidays!

Here’s a useful guide on how to create off-in-lieu for public holidays with Payboy!

Our Payboy Support Centre also helps to address most of the FAQs regarding other statutory leave entitlements asked by our customers:

Streamline your HR processes with Payboy today!

As a PSG-approved HRMS, Payboy provides a robust system to help you manage your HR tasks so that you can focus on your business and people!

With our wide range of modules, you can customise a solution to meet the specific needs of your business:

Payroll Processing | Leave Management | Claims Management | Applicant Tracking

Time Attendance | Shift Scheduling | Appraisal System | Inventory Management

Project Costing | Training Management | Benefits

Find out how you can do it all with Payboy

Reach out to us if you are keen for a free demo on how we can help you save hours and give you some peace of mind on payroll and other HR matters so that you can focus on your business and people.
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