Pay elements are the itemised components that make up an employee's monthly salary — covering everything paid to or deducted from staff. You can define and manage all your company's pay elements from the Pay Elements page in Payroll Configuration.
Add a Pay Element
Step 1: Click on .
Step 2: Select .
Step 3: Click on .
Step 4: Click on .
Step 5: Scroll down and click on .
Configure the Pay Element
Step 6 — Pay Element ID: Provide a unique pay element ID. You may use the same name as the element, but spaces and special characters are not allowed.
Step 7 — Element Name: Enter a descriptive, clear name. This is the label that employees will see on their payslips.
Step 8 — Type: Select whether this pay element is an Allowance, Deduction, or Reimbursement.
| Type | Description |
|---|---|
| Allowance | A sum paid to the employee to cover a service or a specific allotment (e.g. transport allowance). |
| Reimbursement | A sum paid to cover expenses the employee has already incurred out of pocket. |
| Deduction | Any amount to be deducted from the employee's pay (e.g. salary advance recovery). |
Step 9 — Amount / Formula: Enter a fixed amount or formula. For example, if all employees receive a fixed $100 allowance, enter 100. If the amount varies by employee, leave this as 0 and specify the amount individually in each employee's Pay Information page.
Step 10 — Amount Limit (Optional): Set a threshold amount or percentage if required. The system will flag any pay record where this element exceeds the specified limit.
Step 11 — Tax Code: For all pay elements of type Allowance, you must select the correct tax code.
Important: Selecting the correct tax code for Allowance pay elements is essential to ensure all wages are accurately reflected in the employee's IR8A form. An incorrect or missing tax code may result in incomplete statutory reporting. |
Step 12 — Additional Settings: Specify whether the pay element should be prorated, whether it is CPF/SDL payable, and whether it is a Benefits-in-Kind type. Hover over each tooltip for a detailed explanation of each option.
Step 13 — Wage Type: Select whether this pay element falls under Ordinary Wage (OW) or Additional Wage (AW). This is important for CPF calculation.
Step 14 — Frequency: Choose how often this pay element should be applied. There are four options.
| Frequency | Description |
|---|---|
| Fortnightly | Used when payroll is processed every two weeks. Select whether this element applies in the first interval, the second interval, or both. |
| Monthly | The default setting for monthly payroll runs. This pay element remains active every month. |
| One Time | Applied only once. After the payrun is processed, the pay element automatically becomes inactive. |
| Inactive | The pay element will not be included in any payrun until reactivated. |
Step 15 — Recurring Months (Optional): Use the Recurring field to specify particular months in which this pay element should be applied. Leave this blank if the element runs for all eligible months.
Step 16: Click to save the pay element.