Mandatory Itemised Payslips in 2016

24 November, 2015
By G-Team in Human Resource
itemised payslip

The Ministry of Manpower (MOM) has made amendments to the Employment Act (EA) on 17 August 2015, which states that “From 1 April 2016, all employers will be required to issue itemised payslips and key employment terms (KETs) to employees covered under the Employment Act.” Companies that breach this law are liable to be fined by MOM of up to S$1,000 on the first occasion and up to S$2,000 on subsequent occasions.

Under this new law, MOM has spelt out mandatory items to be included in the payslip. While it is a common practice for companies to issue out payslips to employees, be it hardcopy or softcopy, has your company already fully satisfied this checklist? Is your company ready to implement these changes in the upcoming year?

What is essential?

If your company is not aware of the itemized payslip requirements set out by MOM, now is the time to get yourself familiarized. Be it from an employer or employee point of view, it is essential to know what is required on the itemised payslip.

1.       Full name of employer.

2.       Full name of employee.

3.       Date of payment (or dates, if the payslips consolidates multiple payments).

4.       Monthly basic salary. For hourly, daily or piece-rated workers, indicate all of the following:

  • a.       Basic rate of pay e.g. $X per hour.
  • b.      Total number of hours or days worked or pieces produced.

5.       Start and end date of salary period.

6.       Allowance paid for salary period i.e.

  • a.       All fixed allowances e.g. transport,
  • b.      All ad-hoc allowances e.g. one-off uniform allowance.

7.       Any other additional payment for each salary period, such as:

  • a.       Bonuses
  • b.      Rest day pay

c.       Public holiday pay

8.       Deductions made for each salary period i.e.

  • a.       All fixed deductions e.g. employee’s CPF contributions
  • b.      All ad-hoc deductions e.g. no-pay leave, absence from work

9.       Overtime hours worked.

10.   Overtime pay.

11.   Start and end date of overtime payment period (if different from start and end date of salary period).

12.   Net salary paid in total.

More information may be found here on the MOM website.

Is your company ready?

Sure, your company has been dutifully giving employees payslips, be it in a hardcopy or softcopy format. But has your Human Resource (HR) department started looking at ways to “welcome” this new legislation?

Are my employees aware?

While the implementation of this new law might be the next hottest topic in the HR industry, it might not even reach the ears of the larger majority. Companies need to start looking at educating their employees on this new payslip format. Given that this change has direct impact on employees themselves, it is essential that they understand what their payslips or epayslips entails and is being reported to them.

Can my payroll system help me?

Though uncommon, there are still some companies having the practice of issuing hardcopy payslips to employees. Can your current payroll system be configured in ensuring all the necessary payroll information are printed for employees? With more companies outsourcing their payroll, there will definitely be a surge in requests to update the payroll software. Question is will your outsourced-payroll company be able to configure your current payroll software to comply with the government’s requirements? Additionally, given that some companies might still be purchasing licensed payroll software, this new legislation might require software upgrading and installations which then, translates to additional costs incurred.

How can I save my costs?

One of the main reasons cited by companies, especially start-up companies and Small Medium Enterprises (SMEs) for not giving out payslips is due to the cost. With this new law in effect, additional costs to the company are inevitable. However, one way companies can go about minimizing these additional expenses is to go paperless. Not only is going electronic a cost-effective strategy, it is environmental-friendly and employees can easily access their own payslip on the go.

While there are several unforeseen issues that might be looming ahead, with expenses being the primary concern, fret not. Currently, Gpayroll is providing this itemized payslip with no additional cost if your company were to purchase our payroll software. Furthermore, it comes with a two months free trial. Get started here or reach out to one of our friendly staff for more information.