Singapore payroll runs on a monthly cycle, with salaries due by the 7th of the following month. There’s no monthly income tax withholding for resident employees — they file their own annual returns — but the Central Provident Fund (CPF) sits at the centre of payroll for citizens and permanent residents. Foreign employees don’t contribute to CPF, but come with their own levy obligations.
How payroll works in singapore
Salaries in Singapore are paid in Singapore Dollars (SGD) on a monthly basis. You must pay employees by the 7th day of the month following the pay period. If you pay a monthly salary for January, for example, it’s due no later than 7 February.
Unlike many other payroll systems, Singapore doesn’t require employers to withhold income tax from monthly wages for resident employees. The Inland Revenue Authority of Singapore (IRAS) collects income tax through an annual self-assessment process. The main employer-side calculation each cycle is CPF contributions for eligible employees, levies for foreign pass holders, and the Skills Development Levy.
Minimum wage and pay floors
Singapore doesn’t have a single national minimum wage that applies to all workers. Instead, two frameworks set pay floors depending on who you’re hiring.
Local qualifying salary (lqs)
The LQS is a minimum pay threshold tied to work pass eligibility rather than employment law directly. It’s currently set at SGD $1,600 per month, rising to SGD $1,800 from 1 July 2026. Employers need to meet this threshold to qualify for certain work pass quotas and levy concessions.
Progressive wage model (pwm)
The Progressive Wage Model sets mandatory sector-specific minimum wages in covered industries. Those sectors currently include cleaning, security, landscape, food services, retail, and administrative support, among others. If you’re hiring in a PWM-covered sector, you need to pay at least the PWM rate for the relevant job role and level — not just the LQS.
Cpf contributions
CPF is Singapore’s mandatory social security savings scheme. It applies to Singapore citizens and permanent residents (PRs) who earn more than SGD $750 per month. Both employer and employee contribute, with the employer deducting the employee’s share from gross pay and remitting the combined total to the CPF Board each month.
Contribution rates depend on the employee’s age:
| Employee age | Employer rate | Employee rate |
|---|---|---|
| 55 and below | 17% | 20% |
| Above 55 to 60 | 16% | 18% |
| Above 60 to 65 | 12.5% | 12.5% |
| Above 65 to 70 | 9% | 7.5% |
| Above 70 | 7.5% | 5% |
Rates effective 1 January 2026.
As the employer, you withhold the employee’s CPF share at source and pay it to the CPF Board together with your own contribution. CPF contributions cover housing, healthcare, and retirement savings — the funds are allocated across three accounts (Ordinary, Special, and MediSave) based on the employee’s age.
Foreign employees: levy instead of cpf
Foreign employees on work passes don’t contribute to CPF. Instead, the Foreign Worker Levy applies. This is a monthly fee you pay directly to the government for each foreign employee, calibrated by pass type and sector.
Current levy rates:
- S Pass holders: SGD $650 per month
- Work Permit holders: rates vary by sector
The levy exists to manage the ratio of foreign to local workers and isn’t deducted from the employee’s pay — it’s entirely an employer cost on top of the salary.
Even though CPF doesn’t apply to foreign employees, the Skills Development Levy (SDL) still does. See the section below.
Skills development levy
The Skills Development Levy applies to all employees — Singapore citizens, PRs, and foreign pass holders alike. You calculate it at 0.25% of the employee’s monthly wages, subject to a minimum of SGD $2.00 and a maximum of SGD $11.25 per employee per month.
The SDL is collected by the CPF Board alongside CPF contributions. Funds go to the SkillsFuture Singapore Agency to support workforce training programmes.
Income tax and tax clearance
Singapore employees file their own income tax returns with IRAS annually. You don’t withhold income tax from monthly payroll for resident employees — the obligation sits with the individual, not the payroll run.
Tax clearance for departing foreign employees
The exception is tax clearance. When a foreign employee leaves Singapore permanently, or for more than three months, you must apply for tax clearance by filing Form IR21 with IRAS at least one month before the employee’s last day or departure date.
You’re required to withhold the employee’s final salary (and any other monies due) until IRAS issues the tax clearance. Once clearance is granted and any tax owing is settled, you release the remaining amount to the employee. Skipping this step creates exposure for you as the employer, since IRAS holds you responsible for any tax that goes uncollected.
Payslip requirements
The Employment Act requires you to issue an itemised payslip to every employee it covers. Payslips can be delivered digitally or on paper, but they must be issued with each payment (or within three working days of payment for manual processes).
A compliant payslip must include:
- Employer’s full name
- Employee’s full name
- Date of payment
- Basic salary
- Start and end dates of the pay period
- All allowances paid
- Any deductions made (including CPF employee contributions)
- Overtime hours worked and overtime pay, where applicable
- Net salary paid
Keeping payslip records for at least two years is good practice and aligns with general record-keeping requirements under the Employment Act.
Working hours and overtime
The standard working week in Singapore is 44 hours, typically spread across a Monday to Friday schedule. Overtime rules under the Employment Act cover certain categories of employees based on their earnings.
Who qualifies for statutory overtime pay
For non-workmen earning SGD $2,600 per month or less, and workmen earning SGD $4,500 per month or less, overtime pay is mandatory at 1.5 times the employee’s hourly rate. Employees who earn above those thresholds aren’t covered by the Employment Act’s overtime provisions, though you can still offer overtime pay contractually.
Overtime pay must be settled within 14 days after the last day of the salary period in which the overtime was worked.
Running payroll in singapore without a local entity
If you don’t have a Singapore-registered company, you can’t directly run compliant payroll. CPF remittance, SDL collection, and work pass sponsorship all require a legal employer entity registered in Singapore. Without one, you have no standing to hire locally, sponsor work passes, or remit contributions to the CPF Board.
An Employer of Record (EOR) is the most practical route for foreign companies that want to hire in Singapore without incorporating locally. The EOR acts as the legal employer on paper, handling payroll, CPF, SDL, and work pass sponsorship while your team member works for you day-to-day.
If you’re weighing up your options, the guide to what is an Employer of Record (EOR) explains how the model works in practice. For a comparison of providers, see the roundup of EOR services.
RemotePass supports payroll and compliance for Singapore hires, including CPF remittance, work pass coordination, and payslip issuance. Book a RemotePass demo to see how it works.
FAQs
When do Singapore employees have to be paid? Monthly salary must be paid by the 7th day of the month following the pay period. If you pay for January, the deadline is 7 February.
Do foreign employees in Singapore pay CPF? No. CPF applies only to Singapore citizens and permanent residents earning more than SGD $750 per month. Foreign employees on S Pass or Work Permits are subject to the Foreign Worker Levy instead, which is an employer-only cost.
What is the Skills Development Levy and who pays it? The SDL is a 0.25% monthly levy on wages, capped at SGD $11.25 per employee. It applies to all employees, including foreigners. You remit it to the CPF Board alongside CPF contributions.
What must a Singapore payslip include? Under the Employment Act, payslips must be itemised and cover the employer and employee names, payment date, pay period, basic salary, all allowances and deductions, overtime where applicable, and net salary paid. Digital payslips are acceptable.
What is tax clearance and when does it apply? Tax clearance (Form IR21) is required when a foreign employee leaves Singapore permanently or for more than three months. You file with IRAS at least one month before their departure and withhold their final salary until clearance is issued. You’re liable as the employer if the tax goes uncollected.
