Singapore has a very high reputation for economic growth in all of Southeast Asia. They have strong links to Western and other Asian economies. Due to this, they have a strong manufacturing sector and are a major player when it comes to the regional centre for financial services and IT. With all this to fulfill and maintain, there are also certain requirements that foreign companies should take note about. This includes how the payroll system Singapore industry works. Singapore has many foreign businesses, and therefore they are obligated to hire incorporation services. In most cases, the company incorporation provider will offer payroll system Singapore services for your business to outsource to. This is why payroll operations in Singapore are relatively straightforward.
In this article, we are going to take note of what are the key facts, laws and requirements of the payroll system Singapore operations. As a foreign company, it is appropriate to know what is to be expected and how to go about certain situations when you outsource to payroll system Singapore companies.
The primary concerns for a foreign company whether are dealing with the payroll system Singapore rules are the individual income tax for employees, payroll tax, employee compensation insurance, social security costs, business tax, withholding tax and permanent establishment concerns. Foreign companies will use a local payroll system Singapore specialist to simplify the process and maintain full compliance with the local laws.
Xbrl in Singapore
Xbrl and Xbrl filing is used to record a business’ financial statements. Xbrl stands for eXtensible Business Reporting Language. This software system is important for foreign companies to know when they incorporate in Singapore. It plays a vital role in handling all paperwork concerning payroll. ACRA (Accounting and Corporate Regulatory Authority) has ordered that all companies including foreign companies are to submit their financial statements in the Xbrl format. This is not an issue when you outsource your payroll system Singapore services. The local professionals will know how to use the Xbrl framework and how to go about Xbrl filing. This rule will be applied to limited and unlimited companies. The task of Xbrl filing involved transforming the company’s financial information into Xbrl format. The payroll system Singapore specialists will use tag libraries that are prescribed by ACRA. These tags require knowledge of Xbrl tags, when and where to apply them to the information.
ACRA believes with the correct use of Xbrl filing, companies will be able to achieve the objectives of facilitating business in Singapore. They will provide more financial information and enhance the environment with transparency to financial information.
Salary must be paid once a month
To ensure proper management, the payroll system Singapore services will ensure that all salaries are paid at least once a month. Employers should pay the employee's salary month, or at shorter intervals if they prefer. Payroll system Singapore specialists will make sure that salaries are paid within 7 days after the end of the salary period. If there is non-payment of salary after the 7 days, it is noted as an offense.
Salary includes basic pay and allowances
There is no minimum-wage requirement in Singapore, however, the salary is remuneration paid for work done under the contract of employment. This does not include pension, expenses during work, retrenchment benefits, traveling, food, or housing allowances. The salary is simply calculated to provide payment for the hours that are worked by the employee. Payroll system Singapore services will offer to calculate salaries for all employees under the company’s name.
According to the corporate laws, as of 2016, all employers must issue an itemized payslip to employees. This is covered by the employment act in Singapore. That is why it is important to outsource payroll system Singapore specialists, as failure to provide this will result in a fine. The itemized payslips can be in soft or hard copy form. They should include details such as the basic salary, allowances, date of payment, salary period, deductions made, and overtime pay.
Good payroll management in Singapore is to always keep detailed employment and salary records for employees. Payroll system Singapore laws state that employers are expected to keep up to two years of these financial records for all employed. The records of former employees must be kept for one year after they left the job.
Those were a few pointers that foreign companies should know about before they proceed to incorporate in Singapore. Even though you will be employing payroll system Singapore services, it is crucial to know certain details about the payroll requirements and laws in the country.