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The itemised payslip guide for employers in Singapore

Itemised payslips aren't just a good practice; they're a legal requirement in Singapore. In this guide, we'll not only unravel the complexities and intricacies of payslips but also emphasise why staying compliant is paramount. Failing to do so could land your business in hot water with penalties and legal woes.

Read on as we explore the world of itemised payslips, decode regulations, and equip you with the knowledge to ensure your business sails smoothly in the ever-evolving waters of hiring employees in Singapore!

What is an itemised payslip, and what should I include in it?

An itemised payslip is a statement that explains what your employee’s pay is made up of. Payslips must include the items shown below, unless an item is not applicable to your employee.

Number Item description
1 Full name of the employer
2 Full name of the employee
3 Date of payment (or dates, if the payslips consolidates multiple payments)
4 Basic salaryFor hourly, daily, or piece-rated workers, indicate all of the following:Basic rate of pay (e.g., $X per hour)Total number of hours or days worked or pieces produced
5 Start and end dates of the salary period
6 Allowances paid for the salary period, such as:All fixed allowances (e.g., transport)All ad-hoc allowances (e.g., one-off uniform allowance)
7 Any other additional payments for each salary period, such as:BonusesRest day payPublic holiday pay
8 Deductions made for each salary period, such as:All fixed deductions (e.g., the employee’s CPF contribution)All ad-hoc deductions (e.g., deductions for no-pay leave, absence from work)
9 Overtime hours worked
10 Overtime pay
11 Start and end dates of the overtime payment period (if different from item 5—start and end dates of the salary period)
12 Net salary paid in total

Tip: Here are useful guides for you to learn more about some of the above key items:

Is it mandatory to provide itemised payslips to all employees?

Since April 2016, the Ministry of Manpower (MOM) in Singapore has enforced a mandatory requirement for all employers to furnish itemised payslips to their employees. These payslips must include a set of 12 specific items, as outlined above by MOM.

Furthermore, employers are obligated to maintain records of both current and former employees for a duration of up to 2 years.

How exactly does an itemised payslip benefit both employers and employees?

In a nutshell, the itemised payslip policy is all about enhancing the well-being of Singaporeans, benefiting both businesses and their workforce.

  • For employees: Itemised payslips serve as a crucial safety net, providing peace of mind when it comes to their standard pay and employment benefits. This means that employees won't find themselves short-changed or at the mercy of unscrupulous employers.
  • For employers: Complying with this policy is not just a legal obligation; it's a smart move for businesses looking to steer clear of trouble and keep a harmonious relationship with MOM.

Most importantly, the policy helps reduce disputes over compensation and squabbles between employers and employees regarding perks and privileges. When everything is laid out in black and white, as mandated by law, it significantly cuts down on unjustified complaints from employees. This ensures that employers shoulder their responsibilities with clarity and transparency, while employees can rely on a system that safeguards their interests.

Itemised payslips are therefore a win-win, fostering trust and fairness in the workplace for all parties involved.

When should I issue payslips to my employees?

The rule of thumb here is straightforward: itemised payslips should be handed over to your employees at the same time they receive their payment.

However, we understand that sometimes life doesn't stick to a perfectly coordinated schedule. So, if for any reason you can't hand out the payslips simultaneously with the payment, don't fret. You've got up to three working days after the payment date to get those payslips into the hands of your employees.

In the scenario of termination or dismissal, the payslips should be provided along with any outstanding salary owed. It's all about ensuring a smooth and fair transition, even in less-than-ideal situations.

How do I generate itemised payslips for employees?

Here are two options that employers can consider to generate itemised payslips:

Option #1: Create an itemised payslip manually using a template

An employer can create an itemised payslip manually by using the itemised payslip template provided by the Ministry of Manpower (MOM). Here’s a sample of what a completed itemised payslip looks like:

Source: Ministry of Manpower

Option #2: Use HR software to generate payslips automatically

Alternatively, HR software like Payboy can simplify the task of generating payslips for all your employees, as its payroll processing module not only saves time by automating the calculation of salary and deductions but also ensures accuracy and compliance with Singapore’s HR regulations. We will elaborate more on what Payboy can do below!

What are the penalties if an employer fails to provide itemised payslips?

Failure to comply may result in fines of up to $1,000 for the first offence and up to $2,000 for subsequent offences.

In addition, if an employer submits false payslips after the deadline, they could face a hefty penalty of up to $5,000 and court charges.

Tip: Stay compliant by learning what the “6 penalties for HR non-compliance to avoid in Singapore” are, such as CPF contributions, Skills Development Levy, and more!

As an employer, how long should I keep the records of the payslips?

Here's the lowdown on how long you should hang on to the records of the payslips:

  • For Current Employees: You'll want to hold on to the payslip records for your current workforce for the most recent two years. It's a good practice that ensures you're on top of your game when it comes to record-keeping.
  • For Ex-Employees: When it comes to former employees, you'll still want to keep their payslip records for the last two years. These records should also be maintained for an additional year after the employee leaves your company. This extra year of record-keeping ensures that you've got everything you need, just in case any questions or issues pop up down the line.

Whether it's your current team or those who've moved on, the key is to be diligent in preserving payslip records for the specified durations!

Why do some SMEs find generating itemised payslips challenging?

For small and medium-sized enterprises (SMEs), the process of generating itemised payslips can be a bit of a headache. Here's a breakdown of the key reasons behind this challenge:

  • Limited HR resources: SMEs often operate with leaner HR teams compared to larger businesses. This resource constraint forces them to rely on manual processes, which are not only time-consuming but also prone to errors.
  • Irregular employee adjustments: Handling payslips for irregular employees, such as ad-hoc or part-time employees, can be tricky, as their work arrangements may not fit neatly into standard payroll procedures.
  • Additional training for employees: Implementing itemised payslips often requires retraining HR employees to familiarise them with the new policies and associated changes. This incurs additional expenses and time to educate the staff involved.
  • Company-wide implementation effort: Managing the entire payslip process manually for each employee on a monthly basis can become a logistical nightmare, especially for larger companies with a high number of employees. The effort involved in implementing itemised payslips across the entire organisation can be substantial.

These challenges highlight the unique obstacles that SMEs face in adapting to itemised payslip requirements, which can be more manageable for larger enterprises with greater resources and infrastructure in place.

Automatically generate itemised payslips for your employees with Payboy HR software!

If payslips are not generated in a timely manner or are full of errors, it can have a negative impact on productivity and morale. A good HR software is therefore an essential tool for any business that wants to keep on top of its HR obligations.

With our fully compliant, customisable, and integrated payroll processing module, you can automatically generate itemised payslips for your employees and also enjoy additional features that are designed to save you time and effort:

  1. 100% compliance and 100% peace of mind
    • Forget about payroll and SDL calculations, CPF contributions, and IR8A submissions. Our software will automatically calculate them for you and keep you compliant with the latest regulations from MOM, CPF, and IRAS.
  2. Covers any work arrangement
    • Working with full timers, part timers, freelancers, and contract staff? We’ll take care of the unique payroll requirements for each working arrangement.
  3. Transparent, Accurate, and Simple
    • Have full visibility on how payroll is automatically calculated based on shifts, attendance, leave, and submitted claims within an intuitive experience.
  4. Fully integrated with your preferred platforms
    • We’ll fit into your ecosystem seamlessly and keep your finance team happy. Learn more about our seamless integrations with Xero, Financio, and Quickbooks.

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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