Hiring in Singapore is exciting — it means your business is growing. But once you start employing staff, you also take on a new set of legal and compliance responsibilities under local employment law.

From CPF contributions to maintaining employment contracts and payroll records, compliance isn’t just about avoiding penalties — it’s about ensuring transparency, fairness, and business credibility.

This guide covers the key employment compliance requirements for SMEs in Singapore and how digital tools like ccMonet can make HR and payroll compliance easier to manage.

1. Employment Contracts: What Every Employer Must Provide

Under the Employment Act, all employees covered by the Act must receive a written employment contract, also known as a Key Employment Terms (KETs) document.

What to Include

A compliant employment contract must clearly state:

• Full name and NRIC/FIN of employee and employer
• Job title and description
• Start date and (if applicable) end date
• Working hours, rest days, and overtime terms
• Salary details — basic pay, allowances, deductions, and payment frequency
• Leave entitlements (annual, sick, childcare, etc.)
• Termination terms and notice period

💡 Tip: Always issue the contract before the employee’s first working day. This protects both parties and ensures alignment from the start.

Probation and Part-Time Staff

Probationers, part-timers, and contract staff are all entitled to written terms. The Act applies to most employees, except seafarers, domestic workers, and public officers.

2. Central Provident Fund (CPF) Contributions

CPF is a cornerstone of Singapore’s social security system. Every employer must contribute CPF for Singapore Citizens and Permanent Residents who earn wages.

CPF Contribution Rates (as of 2025)

For employees under 55 years old:

• Employer contribution: 17% of wages
• Employee contribution: 20% of wages

The contributions decrease for employees above 55, according to CPF’s age-tiered rates. CPF is calculated on ordinary wages (salary, allowances, bonuses) and must be submitted by the 14th of the following month after payment.

Key CPF Compliance Rules

• Use CPF e-Submission via cpf.gov.sg for accuracy.
• Pay both employer and employee portions (the latter is deducted from salary).
• Maintain CPF payment receipts and employee contribution records.

⚠️ Late payment penalty: 1.5% per month (minimum S$5), capped at 25% of outstanding CPF contributions.

3. Payroll and Record-Keeping Requirements

The Ministry of Manpower (MOM) requires all employers to maintain detailed employment records for at least 2 years for current employees and 1 year after they leave.

Employee Records Must Include:

• Employee’s personal particulars
• Employment start and end dates
• Job title and working hours
• Salary, allowances, and deductions
• CPF contributions
• Leave records and overtime hours
• Annual appraisal or disciplinary records (if applicable)

Payslips

Employers must issue itemized payslips — either in hard copy or digital form — containing:

• Basic salary
• Allowances and bonuses
• Deductions (CPF, taxes, etc.)
• Overtime pay (if any)
• Net salary paid and date of payment

Failure to provide payslips or maintain records can lead to MOM penalties ranging from S$100–S$200 per employee per breach.

4. Employment Taxes: IR8A and Form IR21

Employers are also responsible for reporting staff earnings to IRAS annually and when employment ends.

IR8A (Annual Submission)

Every employer must submit employee income details to IRAS by 1 March each year.
This can be done electronically through the Auto-Inclusion Scheme (AIS).

Form IR21 (For Employees Leaving Singapore)

If a foreign employee or PR plans to leave Singapore permanently, employers must:

• File Form IR21 at least one month before departure, and
• Withhold final salary until IRAS clearance is issued.

Non-compliance can lead to fines of up to S$1,000 per omission.

5. Best Practices for SME Compliance

a. Centralize HR and Finance Records

Keep employment contracts, payslips, CPF, and tax filings in one secure system. This simplifies audits and ensures consistency between HR and accounting.

b. Automate Where Possible

Platforms like ccMonet help SMEs by:

• Tracking CPF payment due dates
• Organizing employee documents digitally
• Reconciling payroll expenses in real time
• Generating financial summaries for IRAS and ACRA filings

c. Regularly Review Employment Policies

Regulations evolve — review contracts and payroll structures annually to ensure compliance with MOM and CPF Board updates.

d. Train Managers and HR Assistants

Ensure your internal staff understand statutory entitlements like annual leave, public holidays, and overtime pay. Consistency prevents compliance gaps.

6. Key Deadlines at a Glance

• Employment contract: Before employee starts work
• CPF submission: By the 14th of the following month
• Payslip issuance: On or before salary payment date
• IR8A submission: By 1 March annually
• IR21 (for foreigners): At least 1 month before departure
• Record retention: 2 years (active staff) / 1 year (former staff)

Conclusion

Employment compliance is about more than regulations — it’s about building a responsible, transparent workplace that employees trust.

By ensuring proper contracts, timely CPF submissions, and organized records, your business not only avoids penalties but also builds a strong foundation for sustainable growth.

👉 Stay compliant and confident with ccMonet — the AI-powered bookkeeping and compliance platform designed to help SMEs manage HR, finance, and governance effortlessly.

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