Payroll in APAC: The Philippines

Posted on June 10, 2015 by Pragya Gupta

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.
Cloud Payroll Software for Philippines

Part III: Employer Contributions in the Philippines: Home Development Mutual Fund (Pag-IBIG)

Posted on June 8, 2015 by Pragya Gupta

This is the final iteration of the ‘Employer Contributions in the Philippines’ set of blog posts. So far, we have given you an overview of the BIR, the SSS and PhilHealth. We will now talk about the Home Development Mutual Fund – popularly known as Pag-IBIG Fund. The fund is the biggest source of housing finance in the Philippines. Along with the SSS and PhilHealth, employers also need to register to Pag-IBIG.

Requirements: Before you register your business with Pag-IBIG, you will need the following:

Employer’s Data Form (make sure you have a TIN and your SSS employer number to fill the form)
Specimen Signature Form (SSF [HQP-PFF-003])
SSS certification
Proof of business existence (Business permit/ Mayor permit)

You need to fill these forms and take them to the nearest Pag-IBIG service center. After the documents are processed, you will receive the Pag-IBIG Employer ID.

The following is the contribution that is required by the employer and employee

The Pag-IBIG registration process can be done online as well. After deductions, payment to the fund can be done online or through one of the accredited banks.

	Employee Share	Employer Share
PHP 1,500.00 and below	1%	2%
Over PHP 1,500.00	2%	2%

Finally, here we have an example on how PayrollHero calculates Pag-IBIG deductions.

This marks the end of our 3 part blogpost on Employer Contributions in the Philippines. For details on BIR, SSS and PhilHealth, click on the links. To see how PayrollHero calculates deductions on BIR, SSS and PhilHealth, make sure to click on the links.

Here is a helpful video from our friends at ZipMatch.com about Pag-IBIG

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 interested in learning more about PayrollHero for your Philippine business, check out our website at PayrollHero.ph. We would be pleased to chat further about your needs.

Part II: Employer Contributions in the Philippines: PhilHealth

Posted on June 8, 2015 by Pragya Gupta

Philippines PhilHealth Our previous post was an introduction to employer contributions in the Philippines with a closer look on BIR and the SSS. In this post, we’ll give you an idea about how health insurance works in the Philippines. PhilHealth is the health insurance institution that all private and government companies are required to register their new employees to. Here is a list of benefits that PhilHealth covers. Unlike the SSS, the employer’s share towards insurance is equal to the employee’s share towards insurance. The contribution schedule is available here.

Step 1: Employers need to first register their business through the Philippines Business Directory.

Step 2: All employees must submit the PhilHealth Member Registration Form (PMRF) to the HR department. Once that is done, you need to register your employees by filling out Employee Data Record (ER1) Form and submit the ER1 Form with the PMRF for each employee.

Step 3: After the forms are processed, companies will be given the following:

PhilHealth Employment Number (PEN)
Certificate of Registration
PhilHealth Identification Number (PIN)
Member Data Record (MDR) of registered employees.

The Certificate of Registration is required to be displayed clearly in your business’s offices.

Step 4: After deducting employer and employee contributions from the basic monthly salary, payment must be made to PhilHealth or via Accredited Collecting Agents. The payment should be made on or before the due date. The table below is from the PhilHealth website:

Employers with PENs ending in 0-4	Every 11th-15th day of the month following the applicable period
Employers with PENs ending in 5-9	Every 16th-20th day of the month following the applicable period

Step 5: Once the payment is done, you will have to report it within 5 days with the revised RF-1 Form. Alternatively, you can report it online using the Electronic Premium Reporting System

Additional Info:

For new employees in the company, you will have to file the ER2 form to ensure that they are covered by PhilHealth too. Make sure to ask them if the have their PIN so that you can add it to the ER2 form. The form should be submitted to PhilHealth within 30 days of the new employees coming into office. For separated employees, Form RF1 must be filled and submitted within 30 days of the employee leaving. To amend employer data, ER3 form must be filed along with supporting documents.

This is it for PhilHealth. For reference, here is how PayrollHero calculates PhilHealth deductions. Check out Part III of our posts on employee contributions. We give you a crash course on Pag-IBIG deductions.

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 interested in learning more about PayrollHero for your Philippine business, check out our website at PayrollHero.ph or contact us at sales@payrollhero.com. We would be pleased to chat further about your needs!

Singapore Corporate Taxes 102: Auto Inclusion Scheme

Posted on June 4, 2015 by Pragya Gupta

pablo

Our Singapore Corporate Tax lessons are back! (I know what you’re thinking… nothing says exciting like taxes). This time we’ll be talking about how employers in Singapore should handle tax forms for their employees. The IRAS is trying to digitize the entire system by introducing the Auto Inclusion Scheme this year and linking it to CPF contributions. In short, filing tax returns is going to be a smoother, more integrated process.

Under the Income Tax Act, there are four forms that employers should be aware of:

Form IR8A: This is to declare income of all employees
Appendix 8A: This form should be completes if the employee is provided with benefits-in-kind unless these benefits are exempted from Income Tax
Appendix 8B: If the employee has benefited from any Share Ownership Plans, then this needs to be completed
Form IR 8S: Must be completed if excess CPF contributions are made by the employer.

Explanatory notes on each form are here. Income tax returns must be filed for the following people:

Full time resident employees
Part time resident employees
Non-resident employees
Company director (including a non-resident director)
Pensioner and
Employees who have left the organisation within the financial year

For your reference, here are the tax rates for different income brackets:

Taxable Income Bracket	Total tax on income below bracket	Tax rate on income in bracket
0-20,000	0	0
20,001-30,000	0	2
30,001-40,000	200	3.5
40,001-80,000	550	7
80,001-120,000	3,350	11.5
120,001-160,000	7,950	15
160,001-200,000	13,950	17
200,001-320,000	20,750	18
>320,001	42,350	20

The Auto Inclusion Scheme is a system for recording employee income and tax related information for companies with 12 or more employees for the entire year, ending 31 December 2014. Companies have to submit employee information to IRAS electronically by March 1st of every year, starting from 2015. This way, companies do not need to distribute hard copies of the above forms for employees to file their income tax returns.

If employers use payroll software to generate payroll, then the software can be used to submit files to AIS using another (free) software provided by the IRAS called the Validation and Submission Application. The payroll software should meet the IRAS file format specifications in order to submit forms. The Validation and Submission Application software can be downloaded here.

Once every employee’s details are filled in through AIS, companies should inform their employees to file their tax returns through the myTaxPortal. Employees no longer need to fill in their income and details from the four forms above because the AIS system already has it stored.

Employers who have fewer than 12 employees are also encouraged to use the AIS by filling out this form and emailing it to ais@iras.gov.sg. After submitting the form, companies will also have to go through a trial exercise before joining the AIS.

The AIS system can be linked to CPF Data in order to fill up Form IR 8S easily. The system makes for smooth functionality across the IRAS and CPF platforms. To sign up for the AIS and CPF Data Link-up Service from 2016, this application form must be filled. For existing AIS members who want to use the CPF Data Link-Up Service, this application form must be filled.

Hope this helps! If you want to know how to pay up CPF contributions, we’ve got you covered. More on Tax Clearance and CPF contributions later.

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.

What To Do After The 3rd Store Grand Opening

Posted on June 4, 2015 by

Image by decor8blog.com

Success in your business would mean it’s time to expand, but this feat does not come without it’s own set of challenges.

After interviewing 3 different owners for our Retail/ Restaurant Executive Series, I’ve learnt that they all faced similar challenges in management, as soon as they’ve reached their 3rd store opening.

Here are some of the problems and solutions used by our retail/ restaurant executives when managing multiple store locations.

Keep Calm

Managing multiple locations means using technology to cut down on travel expenses

Implementing a different management system is necessary when you have several stores to oversee. Although it is not impossible, but it takes a lot of effort for you to constantly schedule your travel time to supervise different stores at different locations. Travel costs will pile up even more if your stores are located at different countries.

Getting your hands on free, cheap or available SaaS (software-as-a-service) solutions will be save your company a chunk of money. While some businesses have their own custom- built software platforms as collaborative platforms, some of the more commonly-used tools are available online and widely used by small business owners. Some of the best cost saving productivity tools are available online- free or at low monthly costs like Google Documents, Skype, PipelineDeals.com.

As mentioned by our retail executive Andrew Masigan, owner of The Advent Manila Hospitality Group in the Philippines, he advice that “the trick is to put the important systems in place… the efficiency your company’s chain-of-command largely determines
how well your stores operate”.

Managing multiple locations means having putting a system in place

“You must have systems in place to be able to standardize the quality of your communications, products and results,” says Bert Martinez, founder of Bert Martinez Communications. Ensuring a strong internal system of operations would mean that you can save costs on training and reduce time required for supervision. Each employee will have a clear understanding of their responsibilities and boundaries.

In our interview with Adrien Desbaillets, President at SaladStop, he says that “a strong infrastructure is required to support the operation. Overheads start to escalate and a strong focus on SOPs, training, technology is required.” The point here is then to make each employee’s responsibility crystal clear through an organised structure and combine that with a system that measures each person. That way, everyone is accountable for delivering their work regardless of which location they are based at.

Managing multiple locations means shifting from micro management to systematized macro management

Before, Eileen Grey– owner of The Picture Company in the Philippines, didn’t need to think about an entire infrastructure when she opened her first store. She recalls it being just “very personal and mom and pop” until her 3rd store opening. Now she has to consider personnel training, back office space, production, logistics and others.

Having systems and technology in place is good for the business, but it wouldn’t help much if there is no focus on communication. Establishing good communication practices within the whole business is key to collaborate with offices at different locations, co-workers and clients.

Good tips to foster good communication between offices at different locations can include using webcams during weekly team meetings or webinars so team members can see each other, establish a daily reporting system online and use a centralized task management software like Asana, Trello and others.

(Read on how PayrollHero stays in sync with our other offices across the globe)

PayrollHero can help you efficiently manage your multiple business locations and cut down on costs. Talk to us about our business or meet us at our next Meetup!

Canada B2B Networking Marketplace: The Post Event Write-up

Posted on June 2, 2015 by

Great turn out at the Canada B2B Networking Marketplace

The energy at the event was amazing as business owners are enthusiastic to share their product stories with others in attendance.

PayrollHero made a presence and shared our story- how we believe we can help businesses function better with our nifty HR and payroll management software in the cloud.

We would like to say a big Thank You to Guy Belanger for letting us take part in this great opportunity.

Thank you Guy!

Event Highlight

This year’s event also marks the 50th anniversary of bilateral ties between Singapore and Canada. In a speech by High Commissioner H.E Heather Grant, she expressed gratitude to be friends with Singapore and played a part during its formative years since 1965. (Read more about Singapore’s 50th anniversary of bilateral relationship with 13 other countries)

This event was a prelude to the main exhibition and networking events: CommunicAsia 2015 and BroadcastAsia 2015 held at the Marina Bay Sands, Singapore between 2- 5 June 2015.

If you’ve missed the opportunity to speak with the companies present at last night’s event, you can be sure to speak to them at these events. The Canadian pavilion at MBS Basement 2 (BH3-07) has meeting spaces to be used at your convenience on a first-come first-served basis.

If you’re looking to meet with PayrollHero, we are having a casual meetup at our office on 10th June 2015.

Details and Registration available here >>>

PayrollHero | Canada B2B Networking Marketplace

Posted on May 31, 2015 by

We are excited to be part of this networking event!

Proudly hosted by the High Commission of Canada- This networking event is all about getting to know Canadian companies in Singapore varying from hardware, software or service in Next Generation Connected Services, Telecommunications, Power Solutions, Mobile Broadband and many others.

If you interested in being part of this excellent networking opportunity, please register via this link: http://www.mbdesign.com.sg/Canada_CommunicAsia2015/

Stay tuned to read our after-event post next week!

Giving credit to the ‘little guy’ in your company

Posted on May 28, 2015 by

The PayrollHero Way
Giving credit where credit is due is an important task for managers to keep the morale of their employees up. Employees like to be noticed and praised for a job well done.

Why are managers not giving enough praise? Besides the fact that you are busy running around, taking care of daily operations; making sure everything is running as it should, finding out which employee did well for the last 4 weeks will take more effort. Most of the time, this task is not on the top of the priority list and so easily overlooked.

PayrollHero can help you look good to your employees!

Surely there are times where you wish you would have remembered to at least say ‘Good Job’ to Bob the cashier for working 8 hours and being the most helpful. Human errors like this can be avoided by using a simple app, where you can monitor your employees day to day work and track how they are performing accurately.

By using the employee feedback app, Daily Pulse, employees are able to ‘like’ their colleagues that was the most helpful at the end of the shift. Another plus, your customer can give their feedback using the Customer Feedback app too- by voting for the employee that was the most helpful to them.

You, the manager, will receive the data in real time via Xray Insights app. The app will show a clearer view of each employee performance and tracks the employee who is getting the most ‘likes’ on that particular shift. Information is readily available for you at a touch of a button. This makes your job so much easier! It also eliminate subjectivity in your decision as it is based on figures- not hearsay.

Work Place Transparency

At PayrollHero, we want to break the conventional workplace hierarchy by making information more transparent within the company. Using mobile or web apps, all managers can readily access whatever information required anytime, anywhere. We recognize that being on the ball is important when running a business- so time should not be wasted on you waiting for information from other managers.

The Data Might Even Surprise You!

You may be glad to find out that the employee that is actually doing great is the person you least expect. It could very well be the person who is clearing the dishes- that is the most helpful employee among the rest and the most ‘likeable’ to your customers.

The app works by making sure every employee is acknowledged, from the chef to the janitor. You can be the best manager who knows exactly the deserving employees to give credit to at the end of the day.

Read our post on Scheduling Best Practices for Managers.

Want to learn how to be a better manager?

Join our next Meetup on 10th Jun 2015 @ 4pm in Singapore.

We will be focusing on tips and tools you can use to better optimize HR and payroll processes, while cutting costs on time and creating a happier work culture.

To register >>>

5 Sure Wins When You Come To PayrollHero Meetups

Posted on May 27, 2015 by

This meetup is all about HR and payroll management in the cloud for businesses of any size. Today, more companies are getting smarter and are transforming the way they manage their time, attendance, scheduling, payroll and HRIS to a systematized cloud based solution. To make sure your company does not fall behind on this trend, you need to discover why choosing a better management system helps increase your bottomline.

During the meetup, we will be focusing on tips and tools you can use to better optimize HR and payroll processes, while cutting costs on time and creating a happier work culture.

Let’s solve those problems! We want to share our expertise together with you at our next PayrollHero Meetup!

We will have Steve Jagger, co-founder of PayrollHero!

Hello there!

Sure Wins!

Know the tools that can increase productivity in your business by eliminating buddy punching and ghost employees.
Gain new tactics to effectively improve scheduling, time and attendance, HR and payroll management for your employees.
Business Intelligence tools to use for your business to make informed decisions on human resource.
Get to learn about new tools that can help you gain insights and better understand your customer segment.
Our event is free of charge with FREE wine and snacks!

10th June, 2015, 4pm- 5.30pm
Ocean Financial Centre

What is the future of POS for retail?

Posted on May 25, 2015 by

Image by squareup.com

The mobile point of sale system seems to be the buzzword circling around today’s retail industry. But the real question is if the mobile POS system is going to take over the traditional hardware?

We have notice recently that there is a movement towards the mobile POS option, however most retailers still find comfort with the traditional hardwired POS system for their business. Probably for this simple reason- business owners find the traditional machine more familiar to manage, secure and it comes with all the bells and whistles (eg, bar code scanner, receipt printer) at one price.

But do small businesses need to invest a large sum of money to get an all-in-one POS system from the get go? Or would it be wiser to have software that grows with your business, and add to the hardware as they need it?

Let’s think about the concerns of a business owner when choosing the right POS system.

The most common concern shared by most owners is that the traditional hardware gives them the sense of security and familiarity. The POS machine itself is built to withstand the daily grind of business. The POS is plug-in to a power point and does not require charging. The mobile POS system option can only last up to 3-4 hours on the phone or tablet, after which an hour downtime to charge. For a restaurant, this arrangement might not be suitable because POS system must be up and running from start to finish.

Next, a report by the Federal Reserve reveals that security concerns is another main reason why traditional POS system triumphs over mobile systems. Identity theft has been the top complaint on the Federal Trade Commission’s list of complaints for 13 years in a row. This shows that when it comes to credit card transactions, owners have more trust in POS systems than the mobile systems.

Additionally, the mobile system depends completely on the signal strength from wireless provider or a Wi-Fi connection which isn’t as reliable and secure compared to a hardwired connection. While some owners are skeptical about mobile POS not having security to protect cardholders data, business owners can be assured that mobile apps like Square adhere to the PCI Data Security Standard (PCI-DSS).

Another worry with mobile devices being small, it can be easily misplaced or stolen. Comparable to the bulky POS system- it is definitely harder to run out the door with that.

But, owners might not need to choose after all.

Although POS systems might be the better option for retail businesses, it doesn’t mean that the mobile software should be disregarded. The smart business owner would see these 2 systems as mutually exclusive and use both methods to provide better service and enhance customer experience. One does not need to replace the other.

Take for example, a restaurant having their waitresses carry personal tablets to ring up food orders at the table within seconds, that information is also automatically reflected on the main POS system. By cancelling out the time they would usually take to key every order at the machine- this saves time on service and improves workflow. The customer can then physically pay for their meal using the traditional POS system at the cashier once they are done.

Retail outlets in Singapore are doing just that! Taking customer experience to another level through an integrated POS system. Restaurants like Sakae Sushi improves efficiency and flow by installing iPad Minis at the table for customers to ring up orders on their own, without waiting for a waitress. The central POS system at the cashiers handles all the payments after customers are ready to pay for their meal.

iPad Mini for food orders at Sakae Sushi

Central POS system at Sakae Sushi

Saving costs with technology. The integrated POS system at your restaurant or retail outlet, would mean that business will need less employees to wait on customers. Service has become self-sufficient.

Last words. It makes sense for business owners to combine the familiarity and security of traditional POS system with the added features from the mobile system to enhance efficiency and customer experience. Although it is important to consider when integrating software into your service; and depending on the nature of the business, reducing the number of staff in place of machines could also mean you will lose the human touch in your service.

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