The Employment Act defines “salary” or “wage” as all remuneration payable to an employee with respect to his employment, including allowances and bonuses. However, it excludes the value of accommodation, supply of light, water, medical attendance or other amenities.
It also excludes pension or provident fund contributions paid by the employer, travelling allowance, payments to defray special expenses incurred in the course of duty. Any gratuity paid on retirement or any retrenchment benefits payable are also excluded from the salary.
Things to consider:
Under the Employment Act, companies must pay their employees correct salaries within seven working days after the end of the salary period. Failure to pay salaries in accordance with provisions of the Act is an offence.
If an employee works for an incomplete month, he is only entitled to the pro-rata portion of his salary for that part of the month he worked.
Payment of overtime is only a statutory requirement if the employee falls within the scope of the Employment Act. For all other employees, payment for overtime will depend on the Employer’s policy and any agreement between the employee and the employer.
Public holidays are typically considered to be paid holidays. If the employee is requested to work on a public holiday by the employer, the employee should be paid an additional days pay on top of the monthly salary.
To ensure your employees’ wages are calculated correctly and in compliance with Singapore law, use our payroll services.
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