Daily Archives: June 10, 2015

Payroll in APAC: Singapore

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Employer contributions in Singapore are collected by the Central Provident Fund (CPF). The deductions and levies contribute towards savings for Singaporeans and Permanent Residents (PRs) for retirement, insurance and building their homes. There are also certain levies that go towards different ethnic funds. We will go through all these deductions and levies.

CPF

CPF contributions are done by the employee and employer. The contributions arsingapore cpfe restricted to Singaporeans and PRs only. There are 4 major accounts that CPF contributions go into: Ordinary Account (for retirement, housing finance, investment, education), Special Account (for old age and special contingencies), Medisave Account (for hospital bills) and Retirement Account (this account is opened once the employee turns 55). Check out these links to find out contributions rates and deadlines.

Foreign Workers Levy

The levy is imposed on employers who employ foreign workers with Work Permits or S Passes. Levies do not need to be paid for employees with Employment Passes. The levy is calculated based on the ratio of Singaporeans to foreign employees that your business employs. Here is a link on how the foreign levy is calculated. The levy is paid on the first of every month. More details on the FWL here.

Skills Development Levy

The SDL goes to the Skills Development Fund, which provides grants for training programmes and workforce upgrading programmes. The levy must be paid for Singpaorean, PR and foreign workers. The rates are linked here.

Ethnic Fund

There are 4 Self Help Group (SGH) Funds that collect levies based on the ethnicity of your employees. The four funds are:

  1. Chinese Development Assistance Council (CDAC) Fund, administered byCDAC
  2. Eurasian Community Fund (ECF), administered by the Eurasian Association(EA)
  3. Mosque Building and Mendaki Fund (MBMF), administered by Majlis Ugama Islam Singapura (MUIS)
  4. Singapore Indian Development Association (SINDA) Fund, administered by SINDA

The levy is paid out of employees’ salaries. Employees may choose to opt out of the levy by signing the relevant forms. The levy must be paid every month. Here are the rates.

If you are looking for a Singapore cloud based payroll platform – look no further. PayrollHero’s end to end solution includes time, attendance, scheduling, HRIS and Singapore payroll. Plus, amazing business intelligence. Let us know if you want a one on one demo.

For more information on CPF contributions, make sure to read this link. If you want to know more about employer contribution in the Philippine, check out Payroll in APAC: the Philippines.. Hope this helps!

Disclaimer: As always, consult your lawyer or accountant for advice! We are here to help, but your specific situation should be reviewed by a professional with complete knowledge of your situation.

Payroll in APAC: The Philippines

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The Payroll in APAC blog posts are (as you might have guessed), a series of blog posts on tax and employer contribution laws in APAC nations. This gives payroll and human resource administrators a high level understanding on what you should know in these countries. Our first post is on the Philippines.

Creditable and Final Withholding Taxes:

The Bureau of Internal Revenue (BIR) is the Philippine equivalent of the IRS in the United States. Companies are required to withhold taxes from employees who are subject to income tax. They are then required to remit these taxes to the BIR.

There are two broad classifications of withholding taxes: Creditable withholding taxes and final withholding taxes. Creditable withholding taxes apply for certain income payments and are creditable against income tax. On the other hand, Final Withholding Taxes are not creditable against withholding taxes. Unlike the former, final withholding taxes are prescribed on royalties and interest incomes.

Social Security Service (SSS)

The SSS is the social security net for Filipinos. It covers a list of contingencies: from disabilities to maternity. All private companies are required to register with the SSS and deduct contributions for their employees. Around 70% of the contribution comes from the employer and 30% from the employee.

Deductions are made from the employee’s salary and remitted to the SSS. Payments are done monthly or quarterly, based on the type of employee. The summary on benefits and schedule on payments is posted here.

PhilHealth

The health insurance institution in the Philippines is called PhilHealth. All private and government institutions are required to register and deduct contributions from their employees’ salaries. PhilHealth covers a number of benefits. The share of the contribution is split between the employer and the employee. The payment dates and contribution schedule are available here.

Pag-IBIG – Home Development Mutual Fund

The final contribution that employers need to be aware of is Pag-IBIG. This institution provides housing finance for Filipinos. Contributions by the employer are equal to 2% of the employee’s salary. The dates for payment are in this link.

These are the 4 major tax and employer contribution laws that Payroll and Human Resource administrators should be aware of. At PayrollHero, we deduct the required contributions and generate payroll for our clients. Here are examples of how we compute BIR taxes, SSS, PhilHealth and Pag-IBIG contributions.

For more information on BIR, SSS, PhilHealth and Pag-IBIG with respect to what forms need to be filled and filing deadlines, make sure to click on the links!

Disclaimer: As always, consult your lawyer or accountant for advice! We are here to help, but your specific situation should be reviewed by a professional with complete knowledge of your situation.

If you are in need of a payroll provider in the Philippines that can provide an end to end solution, then let us know. PayrollHero’s Philippine cloud based payroll platform incorporates, time, attendance, scheduling, HRIS, business intelligence and Philippine payroll in one, easy to use solution.
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