Payroll Services in Singapore: What Employers Need to Know

Last Updated: June 2026

Payroll in Singapore covers far more than paying salaries on time. For an employer, payroll services in Singapore mean calculating and submitting CPF contributions for citizen and PR staff, paying the Skills Development Levy, handling foreign worker levies, issuing itemised payslips, tracking statutory leave, and reporting each employee’s income to IRAS once a year. Get any of these wrong and you risk penalties, back-payments, and unhappy staff. This guide sets out every obligation a Singapore employer must handle, with the current figures and where each one comes from.

Key Takeaways

• CPF contributions are compulsory for Singapore Citizen and Permanent Resident employees. Both employer and employee contribute, at rates set by age and wages.
• The CPF Ordinary Wage ceiling rose to S$8,000 a month from 1 January 2026, so more of each salary now attracts CPF.
• Employers with 5 or more employees must submit income data to IRAS under the Auto-Inclusion Scheme (AIS) by 1 March each year.
• The Skills Development Levy is 0.25% of monthly wages, with a floor of S$2 and a cap of S$11.25 per employee.
• Every employee must receive an itemised payslip and Key Employment Terms under the Employment Act.
• The Local Qualifying Salary rises from S$1,600 to S$1,800 from 1 July 2026, affecting how local headcount counts toward foreign worker quotas.

What does payroll in Singapore actually cover?

Payroll is the full process of paying staff and meeting every statutory duty tied to that pay. In practice it breaks into a few moving parts that run on different clocks. Some happen every month, such as salary computation, CPF, and SDL. Others happen once a year, such as income reporting. A few are triggered by events, such as a new hire, a resignation, or the departure of a foreign employee.

The core monthly components are salary and allowances, CPF contributions, the Skills Development Levy, foreign worker levies where they apply, statutory leave tracking, and the itemised payslip. The core annual task is income reporting to IRAS. Payroll also feeds directly into your bookkeeping, so it sits close to your wider accounting compliance obligations.

CPF contributions: the largest payroll obligation

CPF is the single biggest statutory cost in most payrolls. Contributions are mandatory for Singapore Citizen and Permanent Resident employees, and both the employer and the employee contribute. Rates depend on the employee’s age and wage band. For employees aged 55 and below earning more than S$750 a month, the employer contributes 17% and the employee 20%, a combined 37%, according to the CPF Board. Rates step down across older age groups.

Contributions only apply up to a wage ceiling. The Ordinary Wage ceiling rose to S$8,000 a month from 1 January 2026, the final step in a phased increase from S$6,000. Wages above that ceiling do not attract further CPF in that month. A separate Additional Wage ceiling governs bonuses and other irregular payments.

CPF rates also continue to change for senior workers and again from 2027, so check the CPF contribution changes for 1 January 2026 before you set up your next pay run.

When are CPF contributions due?

Employer CPF contributions for a given month are due by the 14th of the following month. Late payment attracts interest, so the submission calendar is one of the parts of payroll where timing matters most. The employee share is deducted from gross pay, and both shares are submitted together through CPF EZPay.

Skills Development Levy (SDL)

On top of CPF, employers pay the Skills Development Levy for every employee, local or foreign, full-time or part-time. The rate is 0.25% of an employee’s total monthly wages, subject to a minimum of S$2 and a maximum of S$11.25, set under the Skills Development Levy Act and administered alongside other employer payments. In plain terms, an employee earning S$800 or less attracts the S$2 floor, while anyone earning S$4,500 or more attracts the S$11.25 cap. SDL is paid together with CPF and funds national workforce training schemes.

Foreign workers: levies and the Local Qualifying Salary

If you hire Work Permit or S Pass holders, you also pay a monthly foreign worker levy. The levy rate depends on the pass type, sector, and your dependency ratio. The number of foreign workers you may hire is tied to your local headcount through the Local Qualifying Salary (LQS).

The LQS is the salary a local employee must earn for you to count them in full toward your quota. It rises from S$1,600 to S$1,800 from 1 July 2026, which can change how many foreign workers a firm is entitled to. If you depend on foreign labour, read our breakdown of the July 2026 LQS hike and SME quota impact and our guide to work passes in Singapore. Employers in covered sectors should also track the Retail Progressive Wage Model update, which sets wage floors for specific roles.

Itemised payslips and Key Employment Terms

Since 1 April 2016, the Employment Act has required employers to give every covered employee an itemised payslip with each salary payment, as set out by the Ministry of Manpower. The payslip must show items such as basic pay, allowances, deductions including CPF, overtime, and net pay. It can be hard copy or soft copy and must be given with payment or within three working days of it.

Employers must also issue Key Employment Terms (KETs) in writing to employees who are covered and work at least 14 days. KETs set out job title, hours, salary, leave, and other core conditions. Keeping payslips and KETs accurate is not just good practice, it is a legal duty under the Employment Act, and it protects you in a dispute. Both connect to your wider duties when a job ends, covered in our guide to retrenchment versus termination.

Annual income reporting: IR8A and the Auto-Inclusion Scheme

Once a year, employers report each employee’s income to IRAS. This is done on Form IR8A and its appendices. Employers with 5 or more employees must submit this data electronically through the Auto-Inclusion Scheme (AIS), by 1 March each year. Once you are on AIS, the income flows straight into your employees’ tax returns, so they no longer need a hard copy of the IR8A from you.

Missing the AIS deadline carries real consequences. IRAS can fine non-compliant employers, and company directors or partners can face heavier penalties. Building the 1 March deadline into your year-end routine, alongside the monthly CPF and SDL runs, keeps the whole calendar under control.

Leave entitlements

Payroll also tracks statutory leave, because leave affects pay and records. Under the Employment Act, eligible employees earn paid annual leave that starts at 7 days and rises with service, plus paid sick leave and hospitalisation leave once they meet the service requirement. Working parents may also be entitled to maternity, paternity, and childcare leave under the Child Development Co-Savings Act. Accurate leave records feed directly into pay computation and into the figures you eventually report to IRAS.

Payroll components at a glance

The chart below shows the main statutory components a Singapore employer must handle, grouped by whether they run monthly, annually, or only when an event occurs.

Outsource or keep payroll in-house?

Small teams often start by running payroll themselves on a spreadsheet. That works until the rules shift, headcount grows, or a deadline is missed. The trade-off is the same one businesses weigh for outsourcing versus in-house accounting and payroll: in-house gives you direct control but ties up time and exposes you to compliance risk, while outsourcing converts payroll into a fixed monthly cost handled by people who track the rule changes for you.

For most growing companies, outsourcing pays off once CPF, SDL, AIS, foreign worker levies, and leave tracking all sit on the same monthly calendar. A provider that also handles your corporate secretarial work and bookkeeping keeps everything aligned, which matters from the moment you register a company in Singapore.

How Excellence Singapore can help

We run payroll end to end for Singapore employers: monthly salary computation, CPF and SDL submission, foreign worker levy tracking, itemised payslips, leave records, and annual IR8A filing under AIS. We keep up with the rate changes so you do not have to, and we tie payroll into your accounting and corporate secretarial work so your records stay consistent. To set up compliant payroll or move an existing one across, talk to Excellence Singapore.

Frequently asked questions

Is CPF compulsory for all employees in Singapore?

CPF contributions are compulsory for Singapore Citizen and Permanent Resident employees. Both the employer and the employee contribute, at rates set by the employee’s age and wages. CPF is not payable for foreign employees on work passes, but employers pay a foreign worker levy for them instead.

What is the CPF Ordinary Wage ceiling in 2026?

The Ordinary Wage ceiling is S$8,000 a month from 1 January 2026, up from S$7,400 in 2025. Monthly wages above the ceiling do not attract CPF contributions for that month. A separate Additional Wage ceiling applies to bonuses and other irregular payments.

Who must submit IR8A under the Auto-Inclusion Scheme?

Employers with 5 or more employees must submit employee income data electronically to IRAS under the Auto-Inclusion Scheme by 1 March each year. Once enrolled, the income is pre-filled into employees’ tax returns, so you no longer hand them a paper IR8A.

How much is the Skills Development Levy?

The SDL is 0.25% of an employee’s monthly wages, with a minimum of S$2 and a maximum of S$11.25 per employee per month. It is payable for every employee, local or foreign, and is submitted together with CPF.

When are CPF contributions due each month?

Employer CPF contributions are due by the 14th of the month following the wage month. Late payment attracts interest, so the submission date is one of the firmest deadlines in the payroll calendar.

Should a small business outsource payroll?

Many small businesses run payroll in-house at first, then outsource once CPF, SDL, AIS, foreign worker levies, and leave tracking become hard to keep accurate every month. Outsourcing turns payroll into a fixed cost and shifts the compliance burden to a provider who tracks the rules for you.