Singapore is one of the most attractive destinations for doing business in Asia, thanks to its stable economy, pro-business policies, skilled workforce, and strategic location. However, running a business in Singapore also comes with its own challenges, especially when it comes to managing human resources (HR) and payroll functions.
As a business owner or manager, you may have to deal with complex labor laws, tax regulations, compliance requirements, employee benefits, payroll processing, and other administrative tasks that can take up a lot of your time and resources. Moreover, these tasks are likely to become more demanding and dynamic as Singapore continues to evolve its workforce policies and practices in response to changing economic and social conditions.
Singapore’s Evolving HR and Payroll Landscape
The HR and payroll landscape in Singapore is constantly evolving, with the government regularly introducing new policies, regulations, and schemes that impact businesses of all sizes and sectors.
The Singapore Budget 2023 announced several measures that will impact HR and payroll functions for businesses operating in the country. Some of these measures include:
- Raising the salary ceiling for Central Provident Fund (CPF) contributions from S$6,000 to S$8,000 by 2026, with the first increase from S$6,000 to S$6,300 taking effect on September 1 2023. This means that employers will have to contribute more towards their employees’ retirement savings and adjust their payroll systems accordingly.
- Enhancing the Workfare Income Supplement (WIS) scheme for low-wage workers by increasing the qualifying income cap from S$2,300 to S$2,500 per month, raising the maximum annual payouts by up to S$400, and extending the eligibility age from 60 to 65 years old. This means that more workers will benefit from this scheme and employers will have to factor in these additional payments into their payroll calculations.
- Introducing a new Senior Worker Early Adopter Grant (SWEAG) and Part-Time Re-employment Grant (PTRG) to encourage employers to raise their retirement age and re-employment age ahead of the statutory schedule. The statutory retirement age will increase from 62 to 63 years old on July 1 2022, while the re-employment age will increase from 67 to 68 years old on July 1 2022. The statutory schedule will eventually raise both ages to 65 and 70 respectively by July 2030. These grants will provide financial incentives for employers who voluntarily implement these changes earlier than required by law.
- Expanding the Progressive Wage Model (PWM) to cover more sectors such as retail, food services, waste management, etc., which will set minimum wage standards for different job levels within each sector. This means that employers will have to comply with these wage requirements and ensure that their employees are paid fairly according to their skills and responsibilities.
These are just some examples of how Singapore’s HR and payroll landscape is changing rapidly and how businesses need to keep up with these changes or risk facing penalties or losing out on competitive advantages. However, keeping up with these changes can be challenging, especially for small and medium-sized enterprises (SMEs) that may not have enough resources or expertise to handle these tasks efficiently.
Benefits of HR and Payroll Outsourcing
This is where HR and payroll outsourcing can come in handy. By outsourcing these functions to a reliable service provider who has extensive knowledge of Singapore’s labor laws, taxation rules, compliance standards, and best practices, you can enjoy several benefits such as:
Saving time and money
Outsourcing can free up your time and resources so that you can focus on your core business activities and strategic goals. You can also save on costs such as hiring, training, software, hardware, etc., that are associated with managing HR and payroll internally.
Improving accuracy and security
Outsourcing can reduce errors and risks involved in HR and payroll processing such as miscalculations, delays, fraud, data breaches, etc., by leveraging advanced technology and security measures. You can also ensure compliance with all relevant laws and regulations without having to worry about keeping track of updates or changes.
Enhancing employee satisfaction
Outsourcing can improve employee morale and retention by ensuring timely and accurate payment of salaries, benefits, allowances, etc., as well as providing professional support for employee queries or issues. You can also offer more flexible working arrangements such as remote work options or self-service portals that can enhance employee engagement and productivity.
Moreover, HR and payroll outsourcing services in Singapore have evolved in recent years to cater to the changing needs of businesses. For example, some providers offer cloud-based solutions that allow for real-time access to data, automated payroll processing, and customizable reports. Others offer bundled services that combine HR, payroll, and other administrative functions to provide a comprehensive solution for businesses.
Outsource your HR and Payroll process
HR and payroll outsourcing can be a viable solution for businesses operating in Singapore, especially those that want to stay up-to-date with the latest workforce policies and practices.
When choosing an HR and payroll outsourcing service provider in Singapore, it is important to consider factors such as the provider’s reputation, experience, technology capabilities, pricing, and customer support.
HRMLABS is awarded by Infocomm Media Development (IMDA) as pre-approved digital solution vendor under Productivity Solutions Grant (PSG). With team of experts will help your business to navigate Singapore’s ever-changing payroll compliance regulations.