Running payroll in Singapore isn’t complicated once you understand the system, but it has enough moving parts that most SMEs eventually decide it’s not worth managing in-house. This guide covers what payroll services Singapore businesses use typically include, what they cost, and how to decide whether outsourcing makes sense.
How Singapore payroll works
Every month, employers are required to calculate and pay their employees’ salaries, make the correct CPF contributions, and deduct any applicable amounts from employee pay. At year end, they must file IR8A forms with IRAS for each employee.
The basic mechanics:
Gross salary to deductions and contributions to net pay
For each employee, the employer calculates:
- Gross salary (including any overtime, bonuses, or allowances)
- Employee CPF contribution (deducted from gross)
- Employer CPF contribution (additional cost on top of gross)
- Any other deductions (salary advances, etc.)
- Net pay disbursed to the employee
The employer’s CPF contributions are an additional cost on top of the employee’s gross salary, which is why the true cost of an employee is higher than their stated salary.
CPF: the core of Singapore payroll
The Central Provident Fund (CPF) is Singapore’s mandatory savings scheme. Both employers and employees contribute a percentage of the employee’s wages to the employee’s CPF account every month.
Contribution rates (as of 2025)
| Employee age | Employer rate | Employee rate | Total |
|---|---|---|---|
| 55 and below | 17% | 20% | 37% |
| Above 55-60 | 15% | 16% | 31% |
| Above 60-65 | 11.5% | 10.5% | 22% |
| Above 65-70 | 9% | 7.5% | 16.5% |
| Above 70 | 7.5% | 5% | 12.5% |
Rates apply to the first S$6,800 of ordinary wages per month (the Ordinary Wage ceiling, which increased to S$6,800 in January 2025 and will increase further to S$7,400 in January 2026). Above this ceiling, no CPF contributions are required on the excess ordinary wages.
CPF contributions must be paid by the 14th of the following month. Late payment attracts interest charges.
Who CPF applies to
CPF contributions are required for Singapore citizens and permanent residents only. Foreigners on work passes (Employment Pass, S Pass, Work Permit) do not attract CPF contributions, though they are subject to the Skills Development Levy (SDL).
Other payroll levies and contributions
Skills Development Levy (SDL)
All employers must pay SDL for every employee (including foreign workers). The rate is 0.25% of each employee’s gross monthly wages, subject to a minimum of S$2 per employee per month and a maximum of S$11.25 per employee per month.
Foreign Worker Levy (FWL)
If you employ workers on Work Permits or S Passes, you pay a monthly Foreign Worker Levy to MOM. The rate depends on the sector and the proportion of foreign workers in your workforce. FWL is separate from and in addition to the employee’s salary.
Community Self-Help Fund Contributions
These are community fund contributions (CDAC/MBMF/SINDA/ECF), deducted from employee pay based on ethnicity. They are small amounts (typically S$0.50 to S$3 per month) but must be correctly applied and remitted.
Year-end payroll obligations
IR8A filing
By 1 March each year, employers must submit IR8A forms to IRAS for every employee who worked for them in the preceding calendar year. If you’re under the Auto-Inclusion Scheme (AIS), you submit the data electronically through myTax Portal.
Appendix 8A (benefits in kind)
If employees receive benefits such as a company car, accommodation, or club memberships, these need to be valued and reported on Appendix 8A, submitted with the IR8A.
What payroll services include
A payroll service provider handles the operational side of payroll so you don’t have to:
- Calculating gross pay, deductions, and net pay for each employee
- Generating payslips (which are legally required in Singapore)
- Preparing and submitting CPF contributions monthly via CPF e-Submit@web
- Calculating SDL and including it in the monthly remittance
- Preparing and submitting IR8A forms and AIS submission at year end
What’s usually not included in a basic payroll service: HR advisory, benefits administration beyond standard payroll, and MOM work pass applications.
What payroll services cost in Singapore
| Company size | Monthly cost (approx.) |
|---|---|
| 1–5 employees | S$100–S$200/month |
| 6–20 employees | S$200–S$500/month |
| 21–50 employees | S$500–S$1,200/month |
| 50+ employees | Quoted individually |
Per-employee rates typically range from S$15 to S$40 per employee per month, with a minimum charge. For companies already outsourcing their accounts, bundling payroll is often the cheapest option.
Payroll software vs outsourcing
DIY payroll software (Talenox, QuickHR, Payboy, Deskera) costs S$10 to S$30 per employee per month and gives you direct control. This makes sense if you have a dedicated HR/admin person who can stay current on regulatory changes.
Outsourced payroll makes more sense when you don’t have a dedicated admin person, when regulatory changes need to be tracked and applied, or when you want payroll integrated with your accounting without manual reconciliation.
Consequences of getting payroll wrong
Late CPF payment: Interest at 1.5% per month from the due date. CPF Board actively monitors and enforces this.
CPF underpayment: Penalties apply, and the shortfall must be made up. The employee’s CPF account will show the correct credit regardless, meaning the employer is personally liable for any shortfall if it wasn’t remitted.
Failure to issue payslips: Employers are required to issue itemised payslips to all employees. Failure is a breach of the Employment Act.
Get your payroll sorted
Abacus handles payroll services Singapore companies rely on for monthly CPF submissions and year-end IR8A filing. If you’re currently managing payroll manually or thinking about outsourcing, get in touch to discuss what’s involved.
