Payroll in Singapore 2026: CPF rates, SDL and IR8A

In Singapore the employer does not withhold income tax: employees pay their own tax to IRAS, and the employer reports their pay on Form IR8A by 1 March. Each month it deducts the employee's CPF contribution (20% up to age 55) and pays it to the CPF Board with its own 17% and the 0.25% Skills Development Levy.

Singapore payroll at a glance

CPF and other contributions

CPF applies to Singapore citizens and permanent residents. The rates fall with age:

These are the rates from 1 January 2026 for monthly wages above S$750; lower, phased-in rates apply between S$50 and S$750, and no CPF is due on S$50 or less. Permanent residents in their first two years pay graduated rates unless they apply for full rates. With the S$8,000 Ordinary Wage ceiling (up from S$7,400 in 2025), the maximum monthly contribution on Ordinary Wages for an employee aged 55 or below is S$2,960, of which S$1,600 from the employee. Bonuses and other Additional Wages attract CPF up to the annual Additional Wage ceiling of S$102,000 minus the Ordinary Wages subject to CPF in the year.

Rounding. The CPF Board rounds the total contribution to the nearest dollar and the employee's share down to the dollar; the employer's share is the difference.

From 1 January 2027 the rates rise again for older workers: 16.5% employer and 19% employee (35.5% in total) above 55 to 60, and 13% each (26%) above 60 to 65.

SDL is due for every employee, foreigners included, and is paid together with CPF. The foreign worker levy is a monthly charge per Work Permit holder, alongside the sector quota.

Income tax on salaries

There is no pay-as-you-earn withholding: each employee files a tax return and pays IRAS. The resident rates have applied since the year of assessment (YA) 2024, so they cover income earned in 2026, which is assessed in YA 2027:

Reliefs. The Earned Income Relief is granted automatically: S$1,000 below age 55, S$6,000 from 55 to 59 and S$8,000 from 60. CPF Relief covers the employee's compulsory CPF contributions on wages within the ceilings. All personal reliefs together are capped at S$80,000 per year of assessment. A non-resident's employment income is taxed at a flat 15% or at the resident rates, whichever gives more tax.

Foreign employees leaving. When a foreign or permanent-resident employee stops working for you in Singapore, is posted overseas or plans to leave Singapore for more than three months, file Form IR21 and withhold all monies due to the employee for tax clearance.

Minimum wage, working time and mandatory pay

Singapore has no statutory minimum wage; pay is agreed between employer and employee or with a union. Two schemes still set floors:

• The Progressive Wage Model sets wages for cleaning, security, landscape, lift and escalator, retail, food services and waste management, and occupational progressive wages for administrators and drivers.
• Firms that employ foreign workers must pay local employees at least the Local Qualifying Salary: S$1,800 a month for full-time staff and S$10.50 an hour for part-timers. It also decides how many locals count towards the Work Permit and S Pass quotas.

Hours and overtime. Part 4 of the Employment Act covers workmen earning a basic salary of up to S$4,500 a month and other employees, except managers and executives, earning up to S$2,600. They work up to 44 contractual hours a week and earn overtime of at least 1.5 times the hourly basic rate (for non-workmen at most S$13.60 an hour), capped at 72 hours a month. Salary is paid at least monthly, within 7 days after the salary period, and overtime pay within 14 days.

Monthly payroll calendar and filings

Every month: pay CPF and SDL by the last day of the calendar month. The CPF Board takes enforcement action if contributions are not paid by the 14th of the following month, and late payment interest is 1.5% a month from the day after the due date.

Payslips: give every employee covered by the Employment Act an itemised payslip with the payment, or within three working days. It shows the employer's and employee's names, the payment date, the salary period, basic salary, allowances, other payments, deductions, overtime hours and pay, and net salary. Keep payslip copies for current employees for the latest two years, and for former employees for the last two years, held for one year after they leave.

Every year: prepare Form IR8A and its appendices for all employees, residents, non-residents, directors and pensioners included, by 1 March of the year after the income was earned. Employers with five or more employees in 2026, or those that received a notice from IRAS, must submit them electronically to IRAS under the Auto-Inclusion Scheme (AIS). Other employers give the forms to their employees instead of sending them to IRAS.

Worked example: S$6,000 a month

A Singapore citizen aged 35 earns S$6,000 a month in Ordinary Wages, with no bonus. The salary is below the S$8,000 ceiling, so CPF applies to the full amount: 37% × 6,000 = S$2,220 in total, of which S$1,200 from the employee and S$1,020 from the employer. SDL is 0.25% × 6,000 = S$15, capped at S$11.25.

For the year, her assessable income is S$72,000. CPF Relief of S$14,400 and the Earned Income Relief of S$1,000 leave S$56,600 of chargeable income. Tax: S$550 on the first S$40,000, plus 7% × 16,600 = S$1,162, so S$1,712 for YA 2027, which she pays to IRAS herself.

Common mistakes

1. 1Using the 2025 Ordinary Wage ceiling of S$7,400 instead of S$8,000 from January 2026.
2. 2Applying the 55-and-below rates to older employees, or forgetting the higher rates from January 2027.
3. 3Rounding CPF the wrong way: the total to the nearest dollar, the employee's share down.
4. 4Leaving foreign employees out of SDL, which applies to all employees.
5. 5Deducting income tax from salary as if Singapore had PAYE, or missing the IR8A deadline of 1 March.
6. 6Releasing final pay to a departing foreign employee before IR21 tax clearance.

For a smooth month-end, see our month-end close checklist.

How Clientlly helps

Clientlly ships a built-in payroll profile for Singapore: CPF at 20% for the employee and 17% for the employer up to the S$8,000 Ordinary Wage ceiling, the Skills Development Levy with its minimum and maximum, and the resident tax rates with the Earned Income Relief and CPF Relief to estimate each employee's own tax, checked against official sources on 1 October 2026. It calculates gross to net and the employer contributions, produces payslips, supports recurring payroll adjustments, and imports employees and payroll data; an administrator can adjust the rates in the payroll tax settings, for example so that payslips show no income tax deduction, since Singapore employers do not withhold it. The profile models one employee in a primary job, aged 55 or below, single, without dependants, at national level, so other CPF age bands, permanent residents' graduated rates, Additional Wages, the foreign worker levy and personal circumstances must be checked.

The Clientlly HR module also handles leave requests and approvals with a leave calendar and keeps HR documents in one place, and attendance and time tracking records hours and overtime for you to review before payroll.