5 Common Payroll Mistakes Singapore SMEs Make — And How to Avoid Them

5 Common Payroll Mistakes Singapore SMEs Make — And How to Avoid Them

"Payroll errors don't just cost money. They erode employee trust — and in Singapore, they can trigger MOM investigations."

Running payroll in Singapore seems straightforward, but it carries layers of regulatory complexity — from CPF contributions to itemised payslips to leave entitlement calculations. Here are the five most common mistakes and how to avoid them.

Mistake 1: Incorrect CPF Contributions

CPF rates vary by age group, citizenship status, and wage bands. Many employers apply the wrong rate — particularly for employees nearing the 55, 60, or 65 age thresholds. CPF Board audits are routine and penalties are automatic.

Mistake 2: Not Issuing Itemised Payslips

Since April 2016, the Employment Act requires employers to issue itemised payslips within 3 days of payment. Failing to do so is a violation — even if the employee is paid correctly.

Mistake 3: Misclassifying Workers

Calling an employee a "contractor" to avoid CPF and Employment Act obligations is a red flag for MOM auditors. The classification must reflect the actual working arrangement, not just the contract title.

Mistake 4: Incorrect Leave Calculations

Annual leave, sick leave, and public holiday entitlements are governed by the Employment Act and vary based on tenure. Errors in pro-ration during onboarding or resignation create disputes.

Mistake 5: Missing IR8A Filing

The IR8A (employee earnings form) must be submitted to IRAS by 1 March each year. Late or inaccurate submission attracts penalties and can trigger tax investigations for both employer and employee.

Delom's payroll service manages your entire payroll cycle — CPF submissions, payslip generation, IR8A filing, and leave administration — accurately and on time. Learn more at www.delom.com.sg.