Running payroll in Singapore is more than transferring salaries. Employers must contribute to CPF, pay Skills Development Levy, issue compliant payslips, file IR8A annually, and meet Employment Act obligations on leave entitlements and notice periods. Get any of these wrong and you face penalties that are disproportionately large relative to the mistake.
This guide covers everything a Singapore employer needs to know about payroll in 2026 — from CPF rates and SDL to IR8A filing and mandatory leave entitlements.
1. Who Is Covered by Singapore Payroll Obligations?
Your payroll obligations depend on the employee's residency status:
| Employee Type | CPF | SDL | Employment Act |
|---|---|---|---|
| Singapore Citizen (SC) | Yes | Yes | Yes |
| Permanent Resident (PR) | Yes | Yes | Yes |
| Employment Pass (EP) holder | No | Yes | Yes |
| S-Pass holder | No | Yes | Yes |
| Work Permit holder | No | Yes | Yes (Part IV) |
| Directors (SC/PR) | Yes (if employed) | Yes | Generally No |
Key clarification on directors: A director who is also an employee (draws a salary under an employment contract) is subject to CPF on the employment income. A director receiving only director fees is not an employee under the Employment Act, but director fees are still taxable income and subject to CPF if the director is a SC/PR.
2. CPF Contributions
The Central Provident Fund (CPF) is Singapore's mandatory social security savings scheme. Both employers and employees contribute. Contributions go into three accounts: Ordinary Account (OA), Special Account (SA), and MediSave Account (MA).
CPF Contribution Rates (2026)
| Age Group | Employer Rate | Employee Rate | Total |
|---|---|---|---|
| 55 & below | 17% | 20% | 37% |
| Above 55 to 60 | 15% | 16% | 31% |
| Above 60 to 65 | 11.5% | 10.5% | 22% |
| Above 65 to 70 | 9% | 7.5% | 16.5% |
| Above 70 | 7.5% | 5% | 12.5% |
Ordinary Wage and Additional Wage
CPF applies separately to Ordinary Wage (OW) and Additional Wage (AW):
- Ordinary Wage: Monthly salary, allowances, and recurring payments. CPF is due by the 14th of the following month. The monthly OW ceiling is S$7,400 from 1 January 2026 (increasing to S$8,000 from 1 January 2027).
- Additional Wage: Annual bonuses, 13th month pay, one-off payments. AW ceiling = S$102,000 minus total OW already subject to CPF in the year.
CPF contributions must be submitted by the 14th of the following month. Late CPF payments attract a late payment interest of 18% per annum (1.5% per month), calculated from the first day of the month following the due date.
CPF for New PRs: Graduated Rates
Employees who are newly granted PR status contribute at lower graduated rates for the first two years, to ease adjustment. In Year 1 as PR, both employer and employee rates are lower than standard (e.g., employer contributes 4%, employee 5% for those 55 and below). The full standard rates apply from Year 3 onwards.
3. Skills Development Levy (SDL)
The Skills Development Levy funds workforce training initiatives under SkillsFuture Singapore. It applies to all employees — Singapore Citizens, PRs, and foreigners on passes alike.
| Monthly Wage | SDL Rate | Minimum |
|---|---|---|
| Up to S$800 | 0.25% of gross wages | S$2.00 |
| Above S$800 | 0.25% of first S$4,500 | Capped at S$11.25/month |
SDL is submitted together with CPF contributions each month via the CPF portal. The maximum SDL payable per employee per month is S$11.25 (0.25% × S$4,500).
4. Foreign Worker Levy (FWL)
If you hire S-Pass or Work Permit holders, you must also pay the Foreign Worker Levy — a monthly levy paid by the employer (not deductible from the employee's salary). Levy rates vary significantly by sector and worker tier.
For S-Pass holders in the services sector in 2026, the basic levy rate is S$650/month. For manufacturing, construction, marine shipyard, and process industries the rates differ. Check MOM's levy rate table at mom.gov.sg as rates are updated periodically.
FWL is paid to MOM, not CPF, by the 14th of each month.
5. Employment Act: Key Employer Obligations
The Employment Act is the main statute governing employer-employee relationships in Singapore. As of April 2019, it covers all employees (including managers and executives) except domestic workers and seafarers.
Timely Payment of Salaries
- Salaries must be paid within 7 days after the end of the salary period
- If the salary period is monthly, pay within 7 days of month-end
- Overtime pay: within 14 days after the end of the salary period
Notice Periods
| Length of Service | Minimum Notice Period |
|---|---|
| Less than 26 weeks | 1 day |
| 26 weeks to less than 2 years | 1 week |
| 2 years to less than 5 years | 2 weeks |
| 5 years or more | 4 weeks |
Notice periods can be longer if stated in the employment contract. Either party may pay salary in lieu of notice.
Payslip Requirements
Employers must issue itemised payslips within 3 working days of each salary payment. Payslips must include:
- Employer name, employee name, and employment type
- Salary period and date of payment
- Basic salary and any allowances
- Deductions (CPF employee contribution, no-pay leave, etc.)
- Net salary paid
- Overtime pay (if applicable)
Payslips can be issued digitally. Failure to issue payslips is an offence under the Employment Act with fines of up to S$1,000 per contravention.
6. Statutory Leave Entitlements
Annual Leave
| Years of Service | Minimum Annual Leave Days |
|---|---|
| 1st year | 7 days |
| 2nd year | 8 days |
| 3rd year | 9 days |
| 4th year | 10 days |
| 5th year | 11 days |
| 6th year | 12 days |
| 7th year | 13 days |
| 8th year and above | 14 days |
Sick Leave
- Outpatient sick leave: 14 days per year (after 3 months of service)
- Hospitalisation leave: 60 days per year (inclusive of the 14 days outpatient)
- Employee must produce a medical certificate from a registered doctor
Maternity and Paternity Leave
- Maternity leave: 16 weeks for SC/PR children (government pays for weeks 9–16); 8 weeks for non-SC/non-PR children
- Paternity leave: 4 weeks for fathers of SC children (government-paid); 2 weeks for non-SC children
- Childcare leave: 6 days per year per parent for children under 7 (SC children: government-paid for 3 of the 6 days)
- Extended childcare leave: 2 days per year for parents of SC children aged 7–12
Public Holidays
Singapore has 11 gazetted public holidays per year. Employees required to work on a public holiday are entitled to an extra day's pay or a day off in lieu.
7. IR8A: Annual Income Reporting
IR8A is the annual form employers submit to IRAS reporting each employee's total income for the year. This is how IRAS pre-fills employee personal tax returns.
Submission deadline: 1 March each year (for income in the preceding calendar year)
Auto-Inclusion Scheme (AIS): Mandatory for employers with 5+ employees — submit electronically via myTax Portal
Employers with < 5 employees: May submit paper IR8A to employees (employees submit with their personal tax returns)
What IR8A Covers
All employment income must be declared, including:
- Basic salary, commissions, bonuses
- Director fees
- Benefits-in-kind (company car, accommodation, club memberships)
- Stock options and equity granted (use Form IR8B/IR8E)
- Gratuities and termination payments
8. IR21: Tax Clearance for Foreign Employees
When a foreign employee (EP, S-Pass, dependent pass holder) ceases employment or leaves Singapore for more than 3 months, the employer must file IR21 (Tax Clearance) with IRAS at least one month before the last day of employment.
During the IR21 period, the employer must withhold the employee's final salary until IRAS issues a tax clearance certificate. Releasing final salary before clearance is obtained can make the employer liable for the employee's outstanding taxes.
9. Worked Example: Monthly Payroll for One Employee
Suppose you hire a Singapore Citizen aged 35, earning S$5,000/month basic salary, with no other variable pay.
Gross salary: S$5,000
Employee CPF (20%): S$1,000 deducted from employee
Employer CPF (17%): S$850 additional cost to employer
SDL (0.25% × S$4,500 cap): S$11.25 additional cost to employer
Net salary paid to employee: S$4,000
Total employer cost: S$5,000 + S$850 + S$11.25 = S$5,861.25
When budgeting for a hire, many first-time employers forget the employer's CPF on top. A S$5,000 salary hire actually costs S$5,861 per month in direct labour costs before any benefits or equipment. Build this into your hiring budget from day one.
10. Key Payroll Deadlines Summary
| Obligation | Deadline |
|---|---|
| Pay employee salary | Within 7 days of salary period end |
| Submit CPF contributions | 14th of following month |
| Submit SDL | 14th of following month (with CPF) |
| Pay Foreign Worker Levy | 14th of following month |
| Issue payslip | Within 3 working days of salary payment |
| File IR8A / AIS submission | 1 March each year |
| File IR21 (foreign employee leaving) | At least 1 month before last day |
Conclusion
Singapore's payroll system is well-structured, but the obligations are numerous and the penalties for non-compliance are real. CPF late payment interest alone can add up quickly. The most common problem for early-stage startups is underestimating the true cost of each hire — the employer's CPF contribution adds 17% on top of stated salary for employees aged 55 and below.
If you'd rather focus on building your business, Karman's accounting team handles payroll processing, CPF submissions, payslip generation, and annual IR8A filing as part of our managed accounting service.
Official Sources
Frequently Asked Questions
For employees aged 55 and below, the total CPF contribution rate is 37% of ordinary wages — 17% from the employer and 20% from the employee. Rates decrease progressively for employees aged above 55, reaching a combined rate of 12.5% for those above 70. CPF contributions apply to Singapore Citizens and Permanent Residents only, not Employment Pass or S-Pass holders.
The Employment Act covers all employees in Singapore except domestic workers and seafarers. From 1 April 2019, the Act was extended to cover all employees including managers and executives. Key protections include minimum notice periods, paid annual leave, paid sick leave, and timely payment of salaries.
Employers must submit IR8A (employee income details) to IRAS by 1 March each year for income earned in the preceding calendar year. Under Auto-Inclusion Scheme (AIS), which is compulsory for employers with 5 or more employees, income data is submitted electronically via myTax Portal.
No. CPF contributions apply only to Singapore Citizens and Permanent Residents. Employment Pass, S-Pass, and Work Permit holders are not covered by CPF. However, all employees — regardless of pass type — are covered by the Employment Act and SDL.