Common Payroll Mistakes Made by Small Business Owners in Singapore
Updated: Mar 31
The management of payroll is a crucial function for a growing business, yet it is also complex and susceptible to costly mistakes.
Common payroll errors include failing to comply with government regulations and miscalculating wages, taxes, and deductions. This article discusses some of the mistakes small business owners often make.

1. Not complying with government regulations
In Singapore, apart from CPF contributions, businesses are also required to make Skills Development Levy (SDL) payments for their employees. The CPF Board collects SDL contributions on behalf of the SkillsFuture Singapore Agency (SSG). Read more about the CPF and SDL.
From 1 April 2016, all employers are required to issue itemised pay slips to employees covered by the Employment Act. Failure to comply with this regulation may result in a fine. Here are the detailed requirements for issuing itemised pay slips.
Thus, businesses must consider to either employ a full time HR person, invest in a payroll software, or outsource payroll to experts that helps them in this area.
2. Miscalculating employees’ pay
Miscalculation can be defined as an error on payroll. It might be hard for Human Resources staff to stay accurate on employees’ payroll, especially when dealing with different worker classifications and work schedules. Regardless of size, miscalculation can happen in any business.
Payroll is a complex process. It contains a lot of factors, including attendance, overtime, leave, benefits, and expenses. Businesses such as food and beverage (F&B) also hires a lot of part-timers, which complicates the payroll further as they as pay according to hours they worked. Small businesses can prevent miscalculation by using payroll software that allows them to calculate employees' pay without error. But such software still requires a person run and oversees it.
Employers should keep updated with their employees' personal data, including date of birth and nationality. This helps to avoid confusion when the payroll department processes salary payments and tracks CPF contributions and deductions. If an employee changes status, for example from Employment Pass to Permanent Resident, the HR department must update its records accordingly.
3. Not keeping adequate payroll records
Failure to maintain proper payroll records is a very prevalent mistake among small and medium enterprises (SMEs), which can lead to significant problems if there is a dispute regarding payments made. Every business must keep proper records and provide the appropriate forms to the government regulators when they ask for them. This way, any problems can be fixed more easily and quickly.
For a business in Singapore, submission of tax forms to the Inland Revenue Authority of Singapore (IRAS) is required annually before March 1 each year.
Companies that do not keep proper records of their payroll will eventually pay a hefty price for their negligence. Investing in a good payroll software can help you track your records and generate them whenever you need them. Also, your outsourced payroll service provider must be able to provide records of your payroll as requested, as part of their contractual obligations.
4. Pay-run schedule problems
Consistent salary disbursement schedules can help increase your workforce's productivity and morale. Any late payment can cause problems for employees' expense plans or GIRO arrangements. It is also important to make scheduled CPF payments to avoid non-compliance penalties.
For businesses with limited resources, the struggle to meet payroll deadlines and complete payroll processing may detract from other important day-to-day tasks. Errors in calculating these payments can have a negative impact on the company's finances. To reduce the risk of missing payroll deadlines, consider using payroll processing software.
Avoid Payroll Errors and Issues with Acc Pro (Singapore)
Acc Pro (Singapore) offers hassle-free and cost-effective payroll processing services to small business owners, so they can focus more on their core business activities. We assign a dedicated payroll administrator to each of our clients.

Acc Pro (Singapore) is an approved vendor of HR and Payroll services under the PSG Grant Singapore. You can claim up to 50% Productivity Solutions Grant (PSG). In addition, SkillsFuture Enterprise Credit (SFEC) encourages employers to invest in the enterprise transformation and capabilities of their employees. Eligible employers will receive a one-off S$10,000 credit to cover up to 90% of out-of-pocket expenses on qualifying costs for supportable initiatives, over and above the support levels of existing schemes.
If you have any questions about payroll outsourcing, please don’t hesitate to contact us.