Do employers withhold income tax from salaries in Singapore?

No. Unlike many countries, Singapore has no monthly PAYE income-tax withholding for local employees. You pay the full net salary after CPF and other authorised deductions; employees file and pay their own income tax. The exception is IR21 tax clearance, where you withhold a departing foreign employee's final payment until IRAS clears it.

What are the steps to run payroll in Singapore each month?

Gather inputs (hours, leave, variable pay); calculate gross-to-net including CPF, the Skills Development Levy and Self-Help Group contributions; generate itemised payslips; pay employees (commonly via a GIRO bulk file); and submit CPF contributions through CPF eZpay by the 14th of the following month.

What deductions are made from a Singapore salary?

The employee's CPF share (for Citizens and PRs), Self-Help Group fund contributions (CDAC, ECF, MBMF or SINDA, unless opted out), and any authorised deductions. The employer separately pays its CPF share and the Skills Development Levy on top of salary.

Are itemised payslips mandatory in Singapore?

Yes. Under the Employment Act, employers must give employees itemised payslips within three working days of payment, showing items such as basic pay, allowances, deductions, CPF, net pay and the payment period.

What is the Skills Development Levy (SDL)?

SDL is a levy payable by employers for all employees rendering services in Singapore, local and foreign. It is 0.25% of an employee's monthly wages, subject to a minimum of S$2 and a maximum of S$11.25, and is collected by the CPF Board together with CPF.

How to Run Payroll in Singapore: A Step-by-Step Guide for SMEs (2026)

Running payroll in Singapore each month means five things: gather your inputs, calculate gross-to-net (CPF, SDL and Self-Help Group funds), issue itemised payslips, pay your employees, and submit CPF via CPF eZpay by the 14th. Once a year, you also report employment income to IRAS under the Auto-Inclusion Scheme.

One thing that surprises newcomers: Singapore has no monthly income-tax withholding for local employees. You do not deduct income tax from salaries — employees file and pay their own tax, and you report their income annually. That makes the Singapore monthly run simpler than many countries', but the statutory contributions still have to be exact.

The monthly Singapore payroll cycle

Gather inputs — new hires, leavers, variable pay, leave, hours.
Calculate gross-to-net — CPF, SDL, Self-Help Group funds.
Generate itemised payslips.
Pay employees — typically a GIRO bulk payout file.
Submit CPF contributions via CPF eZpay by the 14th of the next month.

Step 1: Gather your inputs

Before calculating, confirm: new joiners and their start dates, leavers and final-pay items, variable pay (overtime, commission, bonus), unpaid leave, and any benefits. The most common source of rework is missing data — a new hire with no NRIC/FIN or bank details, or an unconfirmed CPF Submission Number. Catching these before the run is the entire point of a pre-run readiness check.

Step 2: Calculate gross-to-net

From gross pay, apply the statutory items:

CPF — for Singapore Citizens and PRs. The total is 37% for employees aged 55 and below (17% employer, 20% employee), subject to the S$8,000 Ordinary Wage ceiling from 2026. See the CPF contribution rates guide for the full table.
Skills Development Levy (SDL) — an employer levy for all employees (local and foreign): 0.25% of monthly wages, minimum S$2, maximum S$11.25. Collected with CPF.
Self-Help Group (SHG) funds — small monthly contributions deducted from Citizen/PR employees by community: CDAC (Chinese), ECF (Eurasian), MBMF (Muslim) and SINDA (Indian). They are automatic unless the employee opts out, and the amount is tiered by wage. See the CPF Board's contribution rates for the current figures.

There is no income-tax line in the monthly calculation for local employees.

Step 3: Generate itemised payslips

Itemised payslips are mandatory under the Employment Act and must be issued within three working days of payment. A payslip must show the basics — employer and employee, payment period, basic pay, allowances, deductions, CPF, overtime details where relevant, and net pay. Payslips can be soft or hard copy.

Step 4: Pay your employees

Most SMEs pay salaries through a GIRO bulk payout file uploaded to their bank, rather than individual transfers. The file lists each employee's net pay and bank details — so, again, accurate bank data gathered in Step 1 matters.

Step 5: Submit CPF via CPF eZpay

Submit and pay CPF contributions through CPF eZpay. They are due on the last day of the month and must be paid by the 14th of the following month, or 1.5%-per-month interest applies. See the CPF eZpay step-by-step guide.

Once a year: IRAS AIS

By 1 March, report each employee's prior-year employment income to IRAS under the Auto-Inclusion Scheme (IR8A and any appendices). For departing foreign employees, file IR21 tax clearance separately. See the IRAS AIS and IR8A guide.

Common mistakes to avoid

Treating foreign work-pass holders as CPF-eligible (they are not — but SDL still applies).
Missing the 14th CPF deadline and incurring interest.
Forgetting that bonuses attract CPF, subject to the Additional Wage ceiling.
Issuing payslips late or without the required items.

How AimmPayroll runs the cycle

AimmPayroll runs this whole sequence from one reviewed set of figures: readiness checks before the run, gross-to-net with CPF, SDL and SHG applied automatically, itemised payslips, a GIRO bulk payout file, the CPF eZpay file, and the IRAS AIS file at year-end — without re-keying between tools. Start free for up to three employees, or see pricing.