The payroll software is the one that calculates the salaries of the employees each month. The employee can be paid by hourly rate / daily rate / fixed monthly salary. The employee may have some additions and deductions in each month such as overtime pay, daily allowances, advance pay, medical claim, special allowance, etc. And the employee’s unpaid leave, lateness and early departure pay must be deducted from the employee’s salary.

Every month, the payroll software should be able to generate the pay stub for the employees. And payroll software should have useful management reports such as monthly salary summary report, overtime pay report, tax report, annual summary report, and monthly reconciliation report.

And different countries have their own calculation of taxes and provident funds. Therefore, the payroll system must comply with the local government regulation for salary calculation.

Payroll for Singapore:
Payroll in the country of Singapore must comply with Singapore government regulations as given below.

CPF – CENTRAL PROVISION FUND:
An employee who is a Singaporean/Permanent Resident of Singapore must contribute CPF to the CPF board. The amount of the CPF composed of the contribution of the employer and the employee. There are different calculation percentages depending on the salary and age of the employee. Information can be found on the CPF BOARD website.

Ethnic Funds: (SINDA/CDAC/MBMF/ECF):
Based on the ethnic group of the employee, there is a need for the employee to contribute from an ethnic background. This contribution amount will be deducted from the employee’s salary every month and this fund will go directly to the welfare of the relevant ethnic group. Ethnic backgrounds are SINDA (for Indians), CDAC (for Chinese), MBMF (for Malays), ECF (for Eurasians). The amount of the contribution will vary depending on the employee’s salary. Information can be found on the websites of the relevant ethnic groups.

SDL- (SKILLS DEVELOPMENT ASSESSMENT):
This tax must be paid by all employees working in Singapore. The SDL is currently 0.25% for wages up to S$4,500 (as of 2010). This amount must be paid by the employer to the SDL board. The SDL board uses this fund to provide grants for employee training/skills upgrading programs, etc. There are usually many training courses delivered by SDL-approved vendors. A company can get a grant of up to 90% from the SDL board while sending their employees for training.

FWL- (RATE FOR FOREIGN WORKERS):
This levy must be paid by the employer of foreign workers working at their company based on the skill level of the worker. Currently (as of 2010) the LOW / MEDIUM / HIGH levy levels must be paid by the employer. The fee amount can be found on the FWL website.

Income tax:
Based on the employee’s salary, income taxes must be paid by the employee. Currently, the Singapore Income Tax Board makes it a mandatory condition that the employer must submit details of its employees’ annual earnings directly to the Income Tax Board, which is called automatic inclusion. There are various forms like IR8A, IR21, IR8S, APPENDIX-A has to be submitted as per requirement.

National Service:
It is mandatory for all permanent residents and eligible Singaporeans to apply for national service. During the national service period, the employee’s salary will be paid by the government (MINDEF – Ministry of Defense) and the corresponding CPF must be paid by the employer.

Leave – (annual leave, medical leave, child care leave, maternity leave):
There are certain types of leaves that are mandatorily granted as an employee benefit. Such as annual leave (7 days), medical leave (14 days), child care leave (6 days for Singaporeans and 2 days for non-Singaporeans), maternity leave (60 days)

Payroll Software for Singapore:
The right payroll software for Singapore should have all of the above features integrated. Apart from that, a good payroll software for Singapore should have the following additional features.

Remains:
There are many foreigners working in Singapore. Those foreigners who have a work permit pass / employment pass / professional pass. Generally, this pass is valid for certain years. Therefore, payroll software must show balances when due.

GIRO online bank:
For employee wages Writing checks/paying cash is seriously out of date. The payroll software must be able to generate the interface file for the banks with the details of the salaries of their employees. Then the bank can directly credit your wages to your account.

Multi-company:
There are companies that have subsidiaries as well. Therefore, the payroll software must be able to create records from multiple companies in the system and the reports must be separated accordingly.

Competitor multi-user access and user rights:
Payroll is always handled by the HR department and there may be more than one HR user accessing the system. And company heads also want to access the system directly without always relying on HR executive reports. Therefore, payroll software must have concurrent multiple access capabilities with different access rights.

restore backup
Audit trail – to monitor changes made by other users
reports like
1. Payroll Summary Report,
2. Year-to-date summary report,
3. Overtime summary report,
4. Reconciliation report / salary comparison,
5. Bonus/deduction report,
6. Custom Report Writer to generate the reports the user needs.

Conclusion:
The Singapore government insists on having all kinds of employee related transactions such as income tax, provident funds, ethnic fund contributions, skill development fee, foreign worker fee, etc… over the internet. instead of paper/manual. Also, as per government law, a company must retain all such payroll records for at least 7 years for audit verification.

It’s very difficult to do all those types of calculations and transactions manually and keep all the paperwork. It becomes mandatory that important to have the payroll software in any company for efficient and accurate payroll processing.