A payslip is a crucial document every employer should generate to his or her employees.
However, the age of generating physical payslips wasting ink and paper is long gone. And the world is embracing the ePayslip fast. In the year 2016, the Ministry of Manpower (MoM) of Singapore also welcomed the new concept of eSlips with the new rules and standards.
Singapore Ministry of Manpower or MoM has formed a new rule for generating payslips to employees of small and medium-sized businesses based in Singapore.
An ePayslip is Mandatory
The Singaporean government issued the new law by the employee act in 2016. The new law makes it is mandatory to release an ePayslips for all the employees work in an organization. The bill also clearly state the details the new payslip should include. The new rule aims to make sure that all the employee details are adequately maintained. Thus authorities have accurate information to have access to anytime when there are any issues arise.
This further gives a clear report to the government regarding the number of employees in an organization, their salary details and more importantly the amount the organization has to remit to the government as their contribution to Provident Fund (CPF).
Government receives accurate employee details.
With the new rule, the government will be able to receive clear information on each employee of the organization. From the number of employees, their salary details to the organization’s contribution to Provident Fund (CPF) the rule gives clear reports to the authorities.
Companies need to adopt a payroll system
To comply with the new MoM’s rule regarding ePayslip, a payroll system becomes a must-have software solution for all businesses. Lucky for all the organizations who are already using payroll systems, they won’t experience any hassle complying with the new rule. All it requires is some additional data to make sure their ePayslips are to the format given- And they are good to go.
However, in some cases, companies might have to do some small upgrades to the system to generate payslips to comply with the requested format.
But the change can be quite a lot of work for organizations not using the payroll system to manage employee payrolls to mandate with the law. The organizations will have to integrate accounting, payroll, HRMS and other essential business processes for this.
Thus those companies will immediately have to adopt a full ERP solution in their organization to comply with the new rule.
All the businesses will have to abide by this, thus leaving all organizations with no choice but having to have a full ERP solution. This might put enterprises that have no payroll system in a lot of pressure. Because selecting and implementing a suitable ERP solution is no joke, and when it has to do before a deadline, it can be scary.
Key Employment Terms (KETs) are mandatory
In the act, it mentions that it’s mandatory to provide Key Employment Terms in writing. This is to minimize employment disrepute.
With this employer and employee will have to have their mutual terms in the paper and sign it, thus ensuring complete understanding between the parties.
Penalty for not complying
The Ministry of Manpower (MoM) of Singapore will impose a hefty fine on employers who do not comply with the new law. Thus it’s always wise to make the necessary adjustments in your organization to efficiently generate ePayslips as per the new format of the employment act.
Help from the government
Implementing an ERP system cost a large sum of money. Plus it takes a lot of planning to make it a success.
Considering the implementation cost for a payroll system in the country, the government has given SME’s ability to generate payslips from the government MoM website.
To make things easy, the website shows clear information on the KETs and itemized payslips are with helpline numbers and email addresses. Therefore, the SME’s can contact the officials for necessary advisory services.
The MoM also conducts seminars and workshops for businesses to educate them and help them understand the new rule and how to make sure you are complying with it.
More information on the new MoM rule on ePayslip.
Itemized bill should be given with the salary or within 3 days of paying the salary.
The slip can be in either as a softcopy or as a hardcopy. Handwritten hard copies are also allowed.
The itemized Pay slip must contain the following details:
- Employer’s Full name
- Employee’s Full name
- Date(s) of payment of salary. Multiple dates are accepted when the same employee receives numerous payments such as some pending payments or accrued bonuses.
- The basic salary (Clearly mentioned) and how the payment is calculated (hourly basis or product pieces basis, etc…)
- The period which the salary is paid
- Allowance details( For example, travel allowance, meal allowance, uniform allowance etc.)
- Any additional payment details
- Any deductions (e.g., CPF contribution of the employee)
- Overtime hours (if relevant)
- Overtime pay (if applicable)
- Overtime payment and time period(if relevant)
- Net salary paid
Employers should produce payslips of the last 2 years for all employees (worked or still working in the organization.)
For ex-employees, the employer should provide payslips for the previous 2 years and retain them for 1 year after they leave. This is mandatory to all organizations including SMEs
A cloud-based payroll solution is the best
Although it is not required to have all the details in digital form for this, digitally storing payroll data of the organization can benefit you significantly. It will reduce a lot of work of the HRM as all the data and records are available online to the management. Thus a cloud-based payroll software can save you a lot of hassle during the process.
A payroll model with following detailed integrated with accounting will help you enhance the salary disbursement and HR requirements of the organization.
- Employee details
- terms of employment
- salary details (including the breakup of salary)
Another benefit of using cloud technology in this that it will help you generate accurate reports and comparisons on employee data collected. These reports comparisons are useful for appraisals, accounting and budgeting.
On the other hand, a cloud-based system can be more cost-effective for small and medium-sized enterprises because technology saves them money on-premises storage and handling data.
With a cloud-based system, all you have to do is input data into the system via an internet browser. And you will be able to access the data anytime anywhere without having to maintain expensive physical data storages while ensuring legal compliance of the data input. Addition to that, it also helps with generating payslip to employees and reports to the Singaporean government.
If the government made any modification in payslips, the software vendor would do the updates as necessary for you.
A cloud-based Payroll system solutions can also be accessed by a mobile platform enabling the HR to access the data from anywhere, any time of the day.
This is an important law every business based in Singapore should comply with regardless of the size of the organization or the industry they are in.