There are also several statutory requirements for employers in Singapore in relation to their contribution per employee. These are as under:
Central Provident Fund (CPF) in Singapore
The first is the Central Provident Fund (CPF) contributions, which are payable to Singapore Citizens and Permanent Residents. The employer is required to pay the employer’s and employee’s share of CPF contributions monthly for all applicable employees. The CPF contribution is determined according to the rates set out in the CPF Act and are based on the employee’s actual salary earned for that month. The employer may deduct the employee’s share from his salary.
Companies have a grace period of 14 days to pay the CPF contributions after the end of the month for which CPF contributions are due. If the last day of the grace period falls on a Saturday, Sunday or Public Holiday, CPF should be paid by the next working day.
Skills Development Levy (SDL) in Singapore
Second is the Skills Development Levy (SDL), which is used to fund the Skills Development Fund which supports workforce upgrading programmes and provides training grants to employers. It is a compulsory levy that companies have to pay for all your employees working in Singapore, on top of CPF contribution and Foreign Worker Levy. The CPF Board collects SDL on behalf of the SkillsFuture Singapore Agency (SSG).
The SDL collected are channelled to the Skills Development Fund (SDF), which is used to support workforce upgrading programmes and to provide training grants to you when you send your employees for training under the National Continuing Education Training system.
Employers are required to make SDL contributions for all employees — i.e. all local and foreign employees, including casual, part-time and temporary employees. The SDL contribution rate is of 0.25% of an employee’s gross monthly remuneration up to the first $4,500, or $2, whichever is higher. Where the employee’s gross monthly remuneration is more than $4,500, the SDL is fixed at $11.25. The SDL must be paid by the employer and cannot be deducted from the employee’s salary.
The total monthly wages includes any salary, commission, bonus, leave pay, overtime pay, allowance and other payments in cash. After you have computed the SDL for each employee, you need to add up the total amount of SDL payable and round down to the nearest dollar.
Foreign Worker Levy (FWL) in Singapore
The CPF Board also collects the Foreign Worker Levy (FWL) on behalf of the Ministry of Manpower (MOM).
The Foreign Worker Levy (FWL), commonly known as “levy”, is a pricing mechanism to regulate the number of foreign workers in Singapore. As an employer, you do not have to pay Central Provident Fund (CPF) contributions for your foreign workers. However, you must pay a monthly levy for Work Permit and S Pass holders via General Interbank Recurring Order (GIRO).
Ensure you account for all contributions and follow all statutory requirements by availing our payroll services.
Contributions to Self-Help Groups (SHGs) and SHARE Donations
CPF Board is the collecting agent for contributions to self-help group (SHGs) funds and SHARE donations. These contributions and donations are deducted from your employee’s wages together with the employee’s share of CPF contribution. The SHGs Funds are as follows:
Chinese Development Assistance Council (CDAC) Fund, administered by CDAC
Eurasian Community Fund (ECF), administered by the Eurasian Association (EA)
Mosque Building and Mendaki Fund (MBMF), administered by Majlis Ugama Islam Singapura (MUIS)
Singapore Indian Development Association (SINDA) Fund, administered by SINDA
Employees are required to contribute monthly to the SHGs Funds. The SHGs are set up to uplift the less privileged and low income households in the Chinese, Eurasian, Muslim and Indian communities, respectively. The prescribed amount is deducted from the wages of the employees. If the employees wish to contribute a different amount or opt-out, they have to obtain the relevant forms from the respective SHGs.
Ensure you follow Singapore's CPF requirements in your payroll
Learn about the statutory requirements for Singapore employers as regards to their contribution per employee including the Central Provident Fund.