How to Calculate Payroll in Singapore (2026 Guide)

How do you calculate an employee's monthly pay in Singapore?

Work from the employment contract in five steps. First, take the basic pay. Second, add the allowances written in the contract — transport and shift allowances are the usual ones. Third, add extra hours for the month (worked out below). Fourth, subtract the employee's contribution — 20% of wages for an employee aged 55 or below. Fifth, check the result: that net pay is the take-home pay that lands in the employee's bank, and it is the figure the payslip must show.

Worked example — one Singapore citizen employee under 55 in a single month. Basic pay S$5,000 a month, transport allowance S$300, so the package before overtime is S$5,300. The employee worked 10 hours of overtime: the hourly basic rate is (12 × S$5,000) ÷ (52 × 44) = S$26.22, and overtime pays 1.5 times that, so S$39.33 an hour — S$393.30 for the 10 hours. Gross salary for the month is S$5,693.30. The employee's contribution is 20% of S$5,693.30, which is S$1,138.66, so net pay is S$4,554.64.

Note the last two lines: the employer contribution and the training levy are not deducted from the employee — they are costs the employer pays on top of the gross salary. At 17% plus the levy, the true cost of a S$5,693.30 month is S$6,672.41, about 17% more than the gross salary. Our payroll calculator guide covers the same gross-to-net steps for any country, and the Singapore salary calculator runs the employee-side figures.

What are the CPF contribution rates in 2026?

The Central Provident Fund (CPF) is Singapore's mandatory social security savings scheme, run by the CPF Board. The contributions are split between the employer and the employee, and the rates depend on the employee's age. The table below gives the 2026 rates for Singapore citizens and permanent residents from their third year of PR status, earning more than S$750 a month. The total contribution is divided between three accounts: the Ordinary Account (for housing and investment), the Special Account (for retirement) and the MediSave Account (for healthcare). For an employee aged 35 or below, the 37% total splits as 23% to the Ordinary Account, 6% to the Special Account and 8% to MediSave.

Two details catch employers out. First, the age band is set by the employee's age on the last day of the month, and a new rate applies from the first day of the month after the birthday month — not from the birthday itself. Second, the rates for workers aged 55 to 65 rose by 1.5 percentage points on 1 January 2026 and rise again on 1 January 2027, when the 55–60 band goes to 35.5% in total and the 60–65 band to 26%. New permanent residents pay lower graduated rates in their first two years: 9% in total in year one (4% employer, 5% employee) and 24% in total in year two (9% employer, 15% employee), rising to the full rates from year three.

Contributions are due on the last day of each month, with a grace period until the 14th of the following month. Most employers submit through CPF EZPay, which computes the amounts automatically. Miss the deadline and late payment interest accrues at 1.5% a month from the first day after the due date, with a minimum of S$5 — and the Board can take enforcement action. The total contribution for one person is also capped at S$37,740 a year.

How does the Ordinary Wage ceiling work?

Contributions are not charged on unlimited pay. Two ceilings cap them. The Ordinary Wage ceiling caps the monthly salary that attracts CPF: from 1 January 2026 it is S$8,000 a month, up from S$7,400 in 2025 — the final step of a phased increase that began in 2023. Ordinary Wages are the regular monthly payments: basic salary, fixed allowances and overtime. Anything above S$8,000 a month attracts no contributions at all. (Some older guides still quote S$6,800 — that was the ceiling before the phased increases, and it is out of date for 2026.)

Worked example — an employee under 55 on a basic salary of S$10,000 a month. Contributions are calculated on S$8,000 only: the employer pays 17% × S$8,000 = S$1,360 and the employee pays 20% × S$8,000 = S$1,600, for a total of S$2,960 a month. The extra S$2,000 of salary is CPF-free.

The second ceiling covers Additional Wages — bonuses, commissions and other non-monthly payments. The Additional Wage ceiling is S$102,000 a year, minus the total Ordinary Wages already subject to CPF in that year. Worked example — an employee on S$8,000 a month all year has S$96,000 of Ordinary Wages subject to CPF, so the Additional Wage ceiling is S$102,000 − S$96,000 = S$6,000. A year-end bonus of S$12,000 therefore attracts contributions on S$6,000 only: the employer pays 17% × S$6,000 = S$1,020 and the employee pays 20% × S$6,000 = S$1,200. The other S$6,000 of the bonus is CPF-free.

What is the Skills Development Levy (SDL)?

The Skills Development Levy (SDL) is a small monthly charge every employer pays for every employee — citizens, PRs and foreign workers alike — to fund workforce training. It is 0.25% of the employee's total monthly wages, with a minimum of S$2 and a maximum of S$11.25, because it is calculated on wages up to S$4,500 only. The employer pays all of it; there is no employee share, and it never appears as a deduction on the payslip.

The CPF Board collects the training levy on behalf of the Skills and Workforce Development Agency, and it can be paid together with the contributions through EZPay. It is due within 14 days from the end of each month, and late payment carries a penalty of 10% a year on the amount outstanding. The amounts are small — S$11.25 a month at most per employee — but the training levy is the easiest item to forget entirely, because it is the only payroll charge that applies to every single employee with no exceptions.

Alongside CPF and the training levy, the employer also deducts the self-help group contributions from the employee's wages by default: CDAC for Chinese employees, SINDA for Indian employees, the Mosque Building and Mendaki Fund (MBMF) for Malay/Muslim employees, and the Eurasian Community Fund (ECF) for Eurasian employees. These are small fixed monthly sums set by each fund, the employee can opt out, and they are paid together with the contributions.

What is the Foreign Worker Levy?

The Foreign Worker Levy (FWL) is a monthly fee the employer pays to the Ministry of Manpower for every Work Permit holder and S Pass holder it employs. It is a pricing mechanism that regulates how many foreign workers a company may hire: the more of your quota you use, the higher the fee per worker. Employment Pass holders are exempt — no fee is charged for them. The levy is separate from salary and from CPF, which does not apply to Work Permit or S Pass holders at all.

Worked example — a services company with a basic-skilled Work Permit holder in Tier 1 pays S$450 a month for that worker, plus 0.25% of wages as the training levy, and no CPF. The same worker in Tier 3 would cost S$800 a month. An S Pass holder costs a flat S$650 a month in every sector, since 1 September 2025. The fee is charged from the day the Work Permit is issued and stops only when it is cancelled or expires; for a worker who does not work a full calendar month it is charged daily at the monthly rate × 12 ÷ 365. The foreign-worker quota (Dependency Ratio Ceiling) caps foreign staff at 35% of the workforce in services, 60% in manufacturing and 83.3% in construction — always confirm the current rates on the MOM website before budgeting a hire, because they are adjusted as manpower policy changes.

How is overtime calculated in Singapore?

Overtime pay in Singapore is calculated on basic salary only — allowances are excluded. Under Part IV of the Employment Act, overtime must be paid at least 1.5 times the hourly basic rate of pay, and the hourly basic rate is worked out with MOM's formula: (12 × monthly basic salary) ÷ (52 × 44). Contractual working hours cannot exceed 44 hours a week, extra hours are capped at 72 hours a month, and no employee may work more than 12 hours a day including overtime.

These overtime rules apply only to Part IV employees: workmen whose basic monthly salary does not exceed S$4,500, and non-workmen whose basic monthly salary does not exceed S$2,600. Managers and executives are not covered by Part IV, so their overtime is whatever the contract says. Overtime pay must be paid within 14 days after the end of the salary period — a week later than the salary itself, which is due within 7 days.

Worked example: on a basic salary of S$4,000, the hourly rate is (12 × S$4,000) ÷ (52 × 44) = S$48,000 ÷ 2,288 = S$20.98. Eight extra hours pay S$20.98 × 1.5 × 8 = S$251.76. Our overtime pay guide walks through the same calculation step by step for any pay period.

What must a payslip show in Singapore?

Since 1 April 2016, every employer in Singapore must issue an itemised payslip to every employee covered by the Employment Act, in soft or hard copy. The payslip must be given together with the salary payment, or within three working days of payment. It must contain 12 mandatory data points: the employer's and employee's full names, the date of payment, the basic salary, the start and end dates of the salary period, the allowances, any other additional payments, the deductions, the extra hours worked and the overtime pay, the overtime payment period if it differs from the salary period, and the net pay.

The payslip is where payroll errors become visible, so treat it as the final check: the basic salary on the payslip must match the contract, the deduction must be exactly 20% of the wages for an employee under 55, and the net pay must equal gross pay minus that deduction. Keep the latest two years of employment and salary records for current employees — MOM can ask for them — and give every new employee their written Key Employment Terms within 14 days of starting work.

What about income tax and the IR8A?

Singapore has no PAYE-style system: the employer does not deduct income tax from the employee's monthly pay. Instead, the employee settles tax directly with IRAS on assessment, based on the previous year's income — the Year of Assessment 2026 covers income earned in calendar year 2025. The employer's job is reporting, not withholding. Every employer must file the annual return for each employee by 1 March of the following year, under the Auto-Inclusion Scheme (AIS), so IRAS can pre-fill the employee's tax return.

The one exception is non-resident employees. Their employment income is taxed at a flat 15% or at the resident progressive rates, whichever is higher — and for non-residents the employer does withhold tax, because there may be no later assessment to catch it. Resident employees' tax is worked out on chargeable income — total income minus deductions and personal reliefs, capped at S$80,000 a year — using IRAS progressive tax brackets. Our gross salary Singapore guide works through a full S$72,000 example of that tax calculation.

What is the monthly payroll checklist?

Singapore payroll runs as a monthly cycle with five phases: collect the inputs, calculate, pay, submit the contributions, then issue payslips and keep records. Missing a phase is how fines happen, so run the same list every month.

• Step 1 — Collect inputs. Attendance, overtime hours, leave taken, new joiners and leavers, and each employee's pass type — citizen, PR or foreign — because it decides CPF versus levy.
• Step 2 — Calculate each employee. Basic salary plus allowances plus overtime, minus the employee's CPF contribution — and check the basic-versus-allowances split and the S$8,000 Ordinary Wage ceiling before you finalise anything.
• Step 3 — Add the employer costs. Employer contributions at the right age band, the training levy at 0.25% of wages, and the FWL at the right sector and tier for foreign staff.
• Step 4 — Pay and submit. Pay salaries within 7 days of the salary period ending and overtime pay within 14 days; submit CPF and the training levy through EZPay by the 14th of the following month.
• Step 5 — Issue payslips and file. Give every employee an itemised payslip with all 12 mandatory data points, file the annual return for each employee by 1 March, and keep two years of payroll records.

Five common mistakes in Singapore payroll

• Charging CPF on the full salary above S$8,000. CPF stops at the Ordinary Wage ceiling. On a S$10,000 salary, contributions are calculated on S$8,000 only — overpaying by S$740 a month on the combined rate.
• Using the old S$7,400 ceiling. The Ordinary Wage ceiling rose to S$8,000 on 1 January 2026. Payroll templates that still use S$7,400 underpay CPF by S$222 a month for every employee above the old ceiling.
• Paying CPF for foreign workers. Work Permit and S Pass holders are not covered by CPF — they attract the Foreign Worker Levy instead. Deducting 20% from a foreign worker's pay is wrong on both sides.
• Deducting income tax from monthly pay. Singapore has no PAYE. Tax is settled by the employee on assessment; the employer's duty is the annual filing by 1 March, not a monthly deduction.
• Missing the 14th-of-the-month CPF deadline. Contributions are due on the last day of the month with grace only to the 14th of the next month. Late payment interest runs at 1.5% a month, with a S$5 minimum, from the first day after the due date.