Payroll Module Definitions

This document consists of a list of words relating to the Payroll module with its definitions:

Payroll Set Up

• Company Registration Number - Unique Entity Number issued by ACRA upon registering the company in Singapore
• Allowance - Monetary value paid to employees on top of their Basic Pay and are usually CPF payable. This is different from the staff’s Basic Pay. Allowances include Transport Allowance, Meal Allowance, etc.
• Deduction - Amount taken out from the staff’s pay. This can include CPF, SHGs, No Pay Leaves taken.
• Joined Date - The date that the staff joined the company. 
• Confirmation Date - Normally, the date that a staff has completed his/her probationary period.
• Benefits-in-kind - Benefits in kind are benefits which employees receive from their employment but which are not included in their salary. They include things like company cars, private medical insurance paid for by the employer. 

Pay Elements

• Basic Pay/Basic Salary - Basic Pay is the payment that an employee receives for work rendered.
• Gross Salary - Combination of all CPF payable items in the staff’s pay information
• Net Pay/Net Salary - The amount that an employee will receive after all taxes and contributions have been deducted
• Bonus - An amount of money added to wages on a seasonal basis, especially as a reward for good performance. 
• Claims - Usually refer to staff benefits, for e.g. medical, dental benefits, etc. These are non-taxable most of the time 
• Commission - a fee paid to an employee for transacting a piece of business or performing a service 

Other Terms

• Ministry of Manpower (MOM) - The Ministry of Manpower is a ministry of the Government of Singapore which is responsible for the formulation and implementation of labour policies related to the workforce in Singapore. 
• Central Provident Fund (CPF) - The CPF is a mandatory social security savings scheme funded by contributions from employers and employees. 
• Foreign Identification Number (FIN) - A unique identification number issued to all foreigners who are residing / studying, working and staying in Singapore.

Self-Help Groups

• Chinese Development Assistance Council (CDAC) Fund - The CDAC Fund is used to fund CDAC’s programs and assistance schemes to help the students, workers and families from the lower income groups overcome their challenges and achieve social mobility. This is mandatory for both SG citizens and PR. Staff may choose to opt-out by submitting the opt-out form to CDAC
• Mosque Building and Mendaki Fund (MBMF) - The MBMF is applicable to all working Muslims in Singapore – regardless of race and nationality, which includes permanent residents and foreign workers.
• Singapore Indian Development Association (SINDA) Fund –Contributions to SINDA are mandatory for all working Singapore Citizens and Permanent Residents of Indian ethnicity. 
• Eurasian Community Fund (ECF) - Singapore Citizens and Permanent Residents belonging to the Eurasian community are required to contribute to this Self-Help Group (SHG).

Different OT Rates

Singapore:

• OT1 - applicable for working on PH (Public Holiday)
• OT2 - applicable for rendering OT on a normal workday or working on Off Day.
• OT3 - applicable for working on Rest Day.

Based on the rate defined, the OT amount will then reflect accordingly. Below is an example for clarity:

OT1 rate defined is 1.0; OT2 rate defined is 1.5; OT3 rate defined is 2.0

OT Formula: (BasicPay*12) / (52*44)

The OT amount that will be computed by the system will be as per below:

OT 1 (Sys) = ((BasicPay*12) / (52*44)) * OT1 Hours Worked * 1.0

OT 2 (Sys) = ((BasicPay*12) / (52*44)) * OT2 Hours Worked * 1.5

OT 3 (Sys) = ((BasicPay*12) / (52*44)) * OT3 Hours Worked * 2.0

If an employee is using a different OT formula, you may change accordingly in the Employee Pay Information page:

Malaysia:

• OT1 - Applicable for working on an off day / rest day within normal work hours.
• OT2 - Applicable for working beyond normal work hours on a regular workday.
• OT3 - Applicable for: 1. Working on a Rest Day beyond normal work hours. 2. Working on a Public Holiday within normal work hours (up to 8 hours).

• OT4 - Applicable for working beyond 8 hours on a Public Holiday.

  📌 Note: OT4 is applicable only to Malaysia clients as part of Malaysian labour law compliance, ensuring automatic OT4 calculation in the Attendance module according to the latest regulations.

  This category ensures that employees are compensated fairly for their extended hours on such days, in line with Malaysian labour laws.

Normal work hours refer to the first 8 hours of work, even on Public Holidays. Any time worked beyond these 8 hours falls under OT4.

Please note that this feature currently supports configurations using End Time and Standard Time for overtime policy calculations.

Example Scenario

To better understand how OT4 works, consider the following scenario:

A staff member works on a Public Holiday.

1. The first 8 hours will be calculated under OT3 (normal hours on a Public Holiday).
2. Any additional hours beyond 8 hours will automatically be calculated as OT4 (extended hours on a Public Holiday).

This helps ensure your company stays compliant with Malaysian labor laws while simplifying the payroll process.