In this article, you will learn:
According to Section 96 of the Employment Act, every employer is legally bound to give a Payslip to every employee working in his organization.
Such a Payslip must be given by the employer within the time limit prescribed for giving the payslips and for the salary period or periods to which such a Payslip relates.
The time period for giving the Payslip depends upon when and how often the salary is paid by the employer to his employees.
So let’s understand what a Payslip is, what are the various components of a Payslip, and finally, have a look at the Payslip Template.
Also Read: Try QuickBooks Online Accounting Software for Global
What is Payslip?
The employees receive a salary in return for the services rendered by them to their employer. The details of such remuneration are contained in a document that is called a Payslip.
In other words, a Payslip is a document that comprises the components of the salary received by the employee for the services rendered to the employer under the contract of service.
As of April 1, 2016, the Ministry of Manpower (MOM) mandated all the employers to issue itemized Payslips to employees covered by the Employment Act.
What is an Itemized Payslip?
Itemized Payslip is nothing but a Payslip that contains details of information regarding components of salary item by item that is paid to the employees.
The Itemized Payslip is given to all the employees covered by the Employment Act and is given at the time of paying salary to the employee.
If the employer is unable to provide an itemized Payslip to the employee at the time of paying the salary, it must be given within three working days of such payment.
You must remember that an itemized Payslip can be given both as a soft or a hard copy including the handwritten payslip.
This step was undertaken for the fact that giving itemized Payslips to the employees is a good HR practice as employees become aware of their salary components. Furthermore, itemized Payslips help in resolving disputes over salary if any.
The Ministry of Manpower also rolled out Tripartite Guidelines for providing itemized Payslips to the employees. The Guidelines provided how businesses can adopt such a practice by putting in place the necessary system to manage Payslips.
In addition to this, the MOM also released Payslip Templates for companies to adopt them as per their requirements.
Frequency of Paying Salary
As mentioned above, itemized Payslips are issued to the employees at the time of paying salary to them. Thus, it is important to understand for you as an employer how often can you issue salary to your employees.
If an employee is covered under the Employment Act, you need to pay the salary minimum once a month. Accordingly, the salary must be paid within 7 days after the end of the salary period together with the salary slip. In the case where employees work overtime, the salary must be paid within 14 days after the end of the salary period together with the salary slip.
In some cases, you may choose to pay the salary at shorter intervals say fortnightly. In such a case, there would be more than one salary period within a particular month. Thus, you may consolidate all the salary payment details in respect of that calendar month into a single itemized Payslip. And such payslips can be given on the day when you choose to pay your employees, which must be a minimum once a month.
Further, there can be cases where the final salary payment day may vary based on the situation at hand:
|Situation||Payment of Final Salary|
|Where employee resigns and completes the requisite notice period||Last day of employment|
|Where employee resigns without intimation and does not serve a notice period||Within 7 days of the last day of employment|
|Where the employee is dismissed on account of misconduct||Last day of employment. If payment of salary is not possible on the last day of employment, then it must be paid within 3 working days of such a dismissal.|
|Where you as an employer terminate the contract||On the last day of employment. If payment of salary is not possible on the last day of employment, then it must be paid within 3 working days of such a termination.|
In all the above cases, the itemized payslip must be issued on the day when dismissal or termination payment is made to the employees. Make sure that the payslip contains details of such payments, item by item.
Maintaining Record of Payslips
As an employer, you are required to maintain a record of all the payslips:
- Of the lastest two years – in the case of current employees and
- Of the last two years for a period of one year after the employee has left the employment.
Components of Itemized Payslip
As per the guidelines issued by MOM, the itemized payslip must contain the following items. You may, however, skip specific items/items from the payslip if these do not apply to a particular employee. For instance, if ‘Overtime Pay’ does not apply to a specific employee, you may exclude ‘Item 10’ from the payslip.
- Full name of the employee
- Date of payment (or dates, if the payslips consolidate multiple payments)
- Basic salary in the case of hourly, daily, or piece-rated works, you need to mention the following:The basic rate of pay, for instance, S$ X per hour
Total number of hours or days worked or pieces produced
- Start and end date of the salary period
- Allowances paid for salary period, such as All fixed allowances, example transport
All ad-hoc allowances, example one-off uniform allowance
- Any other additional payment for each salary period, such as Bonuses
- Rest day pay
Public holiday pay
- Deductions made for each salary period, such as All fixed deductions (example employee’s CPF Contribution)
All ad-hoc deductions (example deductions for no-pay leave, absence from work)
- Overtime hours worked
- Overtime pay
- Start and end date of the overtime payment period (if different from item 5 start and end date of the salary period)
- Net salary paid in total