Understanding Payroll Laws in Singapore in 2025

More than logging hours and sending out paychecks, handling payroll in Singapore is really about meeting statutory requirements and avoiding compliance risks. This can get complicated fast, so small teams often find themselves buried in CPF contributions, regulatory updates, and detailed calculations. And as employment laws shift, staying accurate and compliant takes more time — and more attention — than most businesses expect.

How do you keep up without falling behind? To help your business get started, we’ve put together a practical guide that outlines the key rules of payroll processing in Singapore — and how the best software for payroll can make the process more efficient and compliant.

What “payroll” mean for companies in Singapore

In Singapore, payroll refers to the system used to compensate employees for their work. It covers everything from basic wages and overtime to allowances and bonuses. On top of that, employers must also manage statutory contributions like the Central Provident Fund (CPF) and other legally required payments.

Following Singapore’s employment regulations is not optional. Employers need to maintain proper records and ensure payments are made on time to avoid penalties and maintain staff trust. The best software for payroll can help with that.

Salary structure and legal definitions

What qualifies as a salary?

Singaporean employment law treats “salary” and “wage” as interchangeable. A salary refers to the compensation employees receive under their contract of service. It is the payment agreed upon for the work they perform.

What’s included in a salary?

A typical salary package may include:

• Basic pay (agreed fixed wage)

• Bonuses

• Allowances

• Incentives tied to specific performance goals

• Commissions based on sales or performance targets

  
  

What is NOT considered salary?

The following items are excluded from the legal definition of salary:

• Employer-covered housing or perks

• Travel and mileage reimbursements

• CPF and other pension fund contributions by the employer

• Retirement gratuities or termination payouts

• Work-related expense claims

• Retrenchment compensation

These are viewed as additional benefits rather than part of the core pay structure.

Payroll compliance essentials for employers

Managing payroll demands greater precision as an organisation grows, making it more necessary to use the best software for payroll. Singapore’s labour regulations require companies to pay attention to several key factors:

• Agreed salary amounts and proper documentation

• Adjustments for partial work months

• Frequency and timeliness of payments

• Calculation and payment of overtime

Smart payroll systems like Adaptive Pay can simplify these tasks by automating calculations and maintaining compliance records, so your HR team can focus on strategic initiatives rather than manual tracking.

Salary payment frequency in Singapore

Under the Employment Act, employers must pay their employees at least once a month, and no later than seven days after the end of the salary period. While monthly payments are the minimum standard, employers may pay more frequently, such as every two weeks, if it fits their business operations.

Overtime wages must be paid within 14 days after the close of the salary period. Special rules apply when an employee leaves the company:

If the employee resigns with proper notice, the final salary should be paid on the last day of work.

In cases of dismissal due to misconduct or sudden contract termination, the final salary must be paid on the last day of employment, or within three working days if same-day payment isn't possible.

Payment is due within seven days from the last working day if the employee resigns without serving the notice period.

No national minimum wage—but progressive wage models exist

Singapore does not enforce a national minimum wage across all sectors. Instead, wages are typically decided through direct agreements between employers and employees, or through union negotiations where applicable.

That said, certain sectors—including cleaning and security—are covered by Progressive Wage Models. These frameworks set minimum wage levels and link pay increases to skills and productivity, offering a structured path for wage growth in specific industries.

Understanding overtime pay

Employees who work beyond their contractual hours are generally entitled to overtime compensation, depending on their role and salary level.

Eligibility for overtime pay includes:

• Non-workmen with a basic monthly salary of S$2,600 or less

• Workmen (primarily manual labour roles) earning S$4,500 or less

Overtime pay is usually calculated at 1.5 times the employee’s hourly basic rate, applying to each hour worked beyond normal contractual hours, excluding rest breaks. Employers can use the Ministry of Manpower’s Overtime Calculator to determine the accurate payout.

Keep accurate records

Since April 1, 2016, all employers covered under the Employment Act must keep proper records of employment and salary details. These records increase legal compliance and provide transparency in compensation practices.

You can simplify that requirement with the best software for payroll. Tools like Adaptive Pay make it easier to stay organised and compliant by automating record-keeping alongside payroll processing.

Simplify your payroll with Adaptive Pay

The best software for payroll takes the hassle out of routine HR tasks—from calculating salaries to managing tax submissions. Platforms like Adaptive Pay go a step further by integrating payroll with attendance and leave management—all within a single system.

Request a demo to see Adaptive Pay in action or chat with one of our experts to learn how our all-in-one cloud HRMS can make payroll simpler and more compliant for your business.