Running payroll in Singapore is straightforward in principle — but the details matter. Employer obligations under the Employment Act, CPF Board rules, IRAS income tax requirements, and the Skills Development Levy (SDL) all intersect to create a compliance framework that every Singapore employer must navigate correctly. Errors can result in financial penalties, reputational damage, and strained employee relationships.
This guide is a comprehensive reference for Singapore employers in 2026, covering CPF contribution rates, the increased Ordinary Wage ceiling, payslip requirements, tax obligations, and SDL — with all deadlines in one place.
CPF: The Foundation of Singapore Payroll
The Central Provident Fund (CPF) is Singapore’s mandatory social security savings scheme. Employers must contribute CPF for all employees who are Singapore Citizens or Permanent Residents, regardless of whether they work full-time or part-time. Foreign employees (EP holders, S Pass holders, Work Permit holders) are not entitled to CPF contributions — though employers must pay the Foreign Worker Levy (FWL) and Skills Development Levy (SDL) for foreign workers.
CPF Contribution Rates (From 1 January 2026)
| Employee Age | Employer Contribution | Employee Contribution | Total CPF Rate |
|---|---|---|---|
| 55 and 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% |
The age bands apply based on the employee’s age at the last day of the calendar month. Rates change from the first day of the month following the employee’s birthday. Always check the CPF Board’s contribution rate tables for the most current rates, as these are updated periodically.
The Ordinary Wage (OW) Ceiling: S$8,000 from January 2026
CPF contributions are only computed on an employee’s Ordinary Wages up to the Ordinary Wage (OW) ceiling. From 1 January 2026, this ceiling increased from S$6,800 to S$8,000 per month. This is a significant increase — for an employee earning above S$8,000/month, the employer’s CPF contribution is now computed on S$8,000 rather than S$6,800, increasing the employer’s monthly CPF cost by S$204 per such employee (17% × S$1,200).
The Annual Wage Supplement (AWS / 13th month bonus) and other additional wages are subject to a separate Additional Wage (AW) ceiling, calculated as S$102,000 minus the total ordinary wages subject to CPF for that year.
When Are CPF Contributions Due?
CPF contributions must be paid by the last day of the calendar month following the month of salary payment. Most employers pay via GIRO, which is debited on the 14th of the following month at the latest. Enforcement action — including prosecution — is triggered from the 15th if payment has not been received.
Example: Salary for April 2026 paid on 30 April → CPF due by 31 May 2026 → GIRO debited on 14 May 2026 or earlier.
Skills Development Levy (SDL)
The Skills Development Levy is a mandatory employer-borne payroll tax administered by SkillsFuture Singapore. It applies to every employee — Singaporean, PR, and foreigner alike — earning any wage in a given month.
- Rate: 0.25% of the employee’s total monthly remuneration
- Minimum: S$2 per employee per month (for employees earning any wage, regardless of how little)
- Maximum: S$11.25 per employee per month (capped at monthly remuneration of S$4,500)
- Payment: SDL is paid together with CPF contributions via the CPF e-Submit system
Unlike CPF, SDL is entirely borne by the employer — it cannot be deducted from the employee’s wages. SDL funds flow into SkillsFuture Singapore to support national workforce training and upskilling programmes.
Payslip Requirements Under the Employment Act
The Employment Act 1968 requires all employers to issue itemised payslips to every employee covered by the Act. Payslips must be issued within 3 working days of each salary payment date (or together with the salary if payment is made electronically). The payslip must include:
- Employer’s name and ACRA registration number (or NRIC/FIN for individuals)
- Employee’s name and last four digits of NRIC/FIN
- Date(s) of payment covered by the payslip
- Basic salary and gross salary
- Start and end date of the pay period
- All allowances, deductions (including CPF employee contribution and any salary advances)
- Net salary payable
- Overtime hours worked and overtime pay (if applicable)
Payslips may be issued in physical or electronic form. Employers must retain payslip records for at least two years after the employee leaves.
Salary Payment Requirements
Under the Employment Act, monthly-rated employees must be paid within 7 days after the end of the salary period. If the salary period ends on 31 January, salary must be paid by 7 February. Employers may pay earlier, but not later. Overtime pay must be paid within 14 days after the end of the salary period in which the overtime was worked.
Income Tax: Employer Obligations
Auto-Inclusion Scheme (AIS)
Most Singapore employers are required to participate in IRAS’s Auto-Inclusion Scheme (AIS), under which they submit employees’ employment income information electronically to IRAS by 1 March each year. The submitted information (via IR8A forms) is automatically included in each employee’s tax return, eliminating the need for employees to manually report their employment income.
Employers with 5 or more employees are required to submit under AIS. Smaller employers may participate voluntarily or issue hard-copy IR8A forms to employees instead.
Tax Clearance for Foreign Employees
When a foreign employee ceases employment in Singapore — whether by resignation, redundancy, or end of contract — the employer must withhold all monies due to the employee and apply for tax clearance from IRAS using Form IR21. Tax clearance must be applied for at least one month before the employee’s last day, or immediately upon learning of the departure. IRAS processes tax clearance and notifies the employer of the amount, if any, to be remitted to IRAS before releasing the remaining salary to the employee.
Foreign Worker Levy (FWL)
Employers of Work Permit and S Pass holders must pay the Foreign Worker Levy, a monthly fee charged by MOM for each foreign worker employed. Levy rates vary by sector, worker type, and the employer’s ratio of foreign to local workers (the Dependency Ratio Ceiling). FWL is deducted via GIRO on the 17th of each month.
Employers who fail to maintain the required local workforce ratio — or who employ more foreign workers than their quota allows — will be unable to obtain or renew work passes, and may face fines and debarment from hiring foreign workers.
Payroll Compliance Calendar
| Obligation | Deadline |
|---|---|
| Pay monthly salaries | Within 7 days of end of salary period |
| Issue itemised payslip | Within 3 working days of salary payment |
| CPF contributions (GIRO) | Debited 14th of following month |
| SDL payment | Together with CPF (via CPF e-Submit) |
| Foreign Worker Levy (GIRO) | Debited 17th of each month |
| IR8A / AIS submission to IRAS | 1 March each year |
| Form IR21 (tax clearance for foreign employee) | At least 1 month before last day of employment |
For the full set of corporate filing deadlines beyond payroll, refer to our Singapore Company Compliance Calendar. For corporate income tax filing obligations, see our Singapore Corporate Tax 2026 guide.
Common Payroll Mistakes to Avoid
- Using the wrong CPF rate for the employee’s age band — rates change at the start of the month after the birthday, not on the birthday itself
- Forgetting SDL for foreign employees — SDL applies to all employees regardless of nationality, unlike CPF
- Not applying for tax clearance in time for departing foreign employees — late applications can result in the employer being personally liable for the employee’s unpaid taxes
- Computing CPF on the full salary above S$8,000 — CPF ordinary wage contributions are capped at S$8,000/month; computing on the full salary results in over-contribution
- Missing the AIS deadline on 1 March — late or incorrect submissions attract penalties from IRAS
How Raffles Corporate Services Can Help
Getting payroll right requires accurate rate tables, timely submissions, and attention to detail every single month. Raffles Corporate Services provides payroll processing, CPF submission, SDL filing, and IR8A/AIS preparation for Singapore companies of all sizes. We ensure your payroll is compliant, on time, and your employees receive accurate payslips every month.
Contact us today to find out how we can take payroll off your plate and keep your business fully compliant with Singapore’s employment and tax obligations.
— The Editorial Team, Raffles Corporate Services