{"id":3551,"date":"2025-06-27T17:30:00","date_gmt":"2025-06-27T09:30:00","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=3551"},"modified":"2025-06-27T17:33:43","modified_gmt":"2025-06-27T09:33:43","slug":"small-business-owners-singapore-should-know-before-paying-salaries","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/small-business-owners-singapore-should-know-before-paying-salaries\/","title":{"rendered":"4 Things That Small Business Owners In Singapore Should Know Before Paying Salaries"},"content":{"rendered":"\n

Doing payroll is a necessary, but time-consuming task that every business owner needs to manage or do themselves. Multiply that across the number of employees you may have, and potentially having to keep track of claims, and you can see why many business owners regard payroll as a tedious chore.<\/p>\n\n\n\n

Whether it is your first time or you’ve been doing it for years, it is worth taking note of the following four tips when doing payroll in Singapore.<\/p>\n\n\n\n

#1 You Must Issue An Itemised Payslip<\/h3>\n\n\n\n

Apart from crediting your employee’s salary in a timely manner, you are legally required under the Employment Act<\/a> to provide an itemised payslip. A breach of this rule can result in\u00a0a fine of $100 to $200<\/a>\u00a0per employee or per occurrence.<\/p>\n\n\n\n

Payslips can be either soft or hard copy, and should be issued at least once a month and given to employees along with their salary. While that’s the ideal scenario, employers have up to 3 working days from the salary payment to provide employees with their payslip.\u00a0<\/p>\n\n\n\n

Aside from being legally required, providing an itemised payslip is a good employment practice for documentation purposes, especially for the avoidance of any future salary dispute. Having payslips also helps your employee understand their salary components.<\/p>\n\n\n\n

Payslips for the entire company must be kept for 2 years, while for ex-employees, payslips must be kept for 1 year after the employee leaves.<\/p>\n\n\n\n

Read Also: 12 Things Employers Need To Include In An Itemised Payslip<\/a><\/em><\/strong><\/p>\n\n\n\n

#2 Types Of Salary Deductions Allowed<\/h3>\n\n\n\n

Salaries can only be deducted for valid reasons allowed under the Employment Act, or under court orders. The following is a non-exhaustive list of authorised deductions<\/a>.<\/p>\n\n\n\n

Absence From Work<\/strong><\/h4>\n\n\n\n

An employee\u2019s salary could be deducted for absences, which usually refers to an incomplete month of work. This could be when an employee joins or leaves the team midway through the month, when no-pay leave is taken or when the employee is on reservist training.<\/p>\n\n\n\n

To calculate salary deductions, the basic rate of pay and the gross rate of pay is used. Basic rate of pay<\/strong> refers to wage adjustments and increments that your employee is entitled to as per the contract terms. Gross rate of pay<\/strong> is the basic rate of pay plus allowances that your employee is entitled to according to the contract terms.<\/p>\n\n\n\n

Absence from work it is calculated as follows:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

For Damages Or Loss Of Money On Goods<\/strong><\/h4>\n\n\n\n

You can deduct your employee\u2019s salary if goods such as work gear, tools, equipment and vehicles are damaged and you held an inquiry to establish that it is the direct fault of your employee. This deduction cannot be more than 25% of your employee\u2019s monthly salary and must be deducted as a lump sum.<\/p>\n\n\n\n

Recovering Advances, Loans, Overpaid Salary Unearned Employment Benefits<\/strong><\/h4>\n\n\n\n

Advances and loans can be deducted from your employee\u2019s salary in instalments, not exceeding more than 25% of their salary. For advances, the instalments must not spread over 12 months.<\/p>\n\n\n\n

For overpaid salary and unearned employment benefits, the full sum can be recovered.<\/p>\n\n\n\n

Other Common Reasons For Salary Deductions Include:<\/strong><\/h4>\n\n\n\n