Payroll Definitions


Annual Leave Encashment

Any unconsumed annual leave may be encashed when:

  • contract of service is ceased by either the employer or employee
  • at the discretion of the employer
  • contractual agreement between the employer and employee.



Allowance is the payment grant to the employee as part of the salary package to defray expenses bore by the employee for business purposes. Usually, they are subject to CPF contributions and taxable. For e.g. transport allowance, meal allowance and etc.


Basic Salary

Basic Salary is the payment (in the form of money) granted to the employee for the services provided to the employer. It does not include:

  • Additional payments by way of overtime, bonus or commission;
  • Travel, food, housing or any allowances however described;
  • Any sum paid to an employee or contract worker to defray special expenses incurred by the person due to the unusual or hazardous nature of the job;
  • Productivity incentive payments;
  • Contributions paid by the employer or employee to any pension or provident fund; or
  • Gratuity payable on discharge or retirement.



Usually, it refers to the payment in place of money such as such as club memberships granted to the employee for the services provided to the employer.



Gratuity given as gift, or compensation earned as reward upon achieving a goal or milestone.


Business Bank Account

The bank account registered for a business entity such as DBS Entrepreneur’s Account, OCBC Business Entrepreneur Account, or UOB Current Account.


Business Registration Number

Unique Entity Number



Claims usually refer to staff benefits, for e.g. medical, dental benefits, etc. Usually, they are not subject to CPF contributions and non-taxable. Do check with IRAS.


Childcare Leave (CCL) Claim

Childcare Leave Claim - Currently, working parents with at least one child who is a Singapore Citizen under the age of 7 years are entitled to 6 days of paid child care leave every year*. The first 3 days are employer-paid, and the last 3 days are Government-paid (capped at $500 per day, inclusive of CPF contributions).

* Childcare leave is capped at 42 days for each parent.


Contributions to Self-help Groups

Employers are expected to deduct your employees’ contributions to self-help groups (SHG) from their wages.


Chinese Development Assistance Council (CDAC) Fund

All employees belonging to the Chinese Community (Singapore Citizens and Singapore Permanent Residents) may contribute monthly to the CDAC Fund according to the wage levels set out by CDAC.


Eurasian Community Fund (ECF)

All employees belonging to the Eurasian* Community (Singapore Citizens and Singapore Permanent Residents) may contribute monthly to the ECF according to the wage levels set out by Eurasian Association (EA).

* “Eurasian” means a person defined as such in his/her identity card or a person of both European and Asian ancestry.


Mosque Building and Mendaki Fund (MBMF)

Employees who are working Muslims in Singapore (Singapore Citizens, Singapore Permanent Residents or Employment Pass and Work Permit holders) may contribute monthly to the MBMF according to the wage levels set out by Majlis Ugama Islam Singapura (Muis). It comprises Mosque Building Fund and Yayasan Mendaki Fund.


Singapore Indian Development Association (SINDA) Fund

Employees who are Indian descent* working in Singapore (Singapore Citizens, Singapore Permanent Residents or Employment Pass holders) may contribute monthly to the SINDA according to the wage levels set out by SINDA.

* Includes Bangladeshis, Bengalis, Parsees, Sikhs, Sinhalese, Telegus, Pakistanis, Sri Lankans, Goanese, Malayalees, Punjabis, Tamils, Gujaratis, Sindhis and all people originating from the Indian sub-continent.


Where applicable, if employees wish to contribute different amounts or opt out, they have to get the relevant forms from the respective SHG and submit them to their employers for endorsement before returning them to the SHG. Do contact the respective SHGs for more information.



Compensation is the payment (in the form of money) granted to the retrenched employee for loss of employment i.e. early termination of contract of service by the employer. Compensation can also be payable when an employee:


  • suffered an injury by an accident arising out of and in the course of employment,
  • contracted an occupational disease, or
  • contracted a disease due to work-related exposure to biological or chemical agents (effective 1 June 2012). For more info, visit: Workplace safety and health



Commission refers to payment (in form of money) granted to the employee for the services provided to the employer. Based on the total amount of sales the employee made, a certain portion, percentage or amount paid to the employee.


Central Provident Fund (CPF)

The Central Provident Fund (CPF) is a comprehensive social security savings plan that has provided many working Singaporeans with a sense of security and confidence in their old age. The overall scope and benefits of the CPF encompass retirement, healthcare, home ownership, family protection and asset enhancement. Working Singapore Citizens or Singapore Permanent Residents and their employers make monthly contributions to the CPF at rates set out in the CPF Act.


Date Confirmed

Date of a statement, often written, that an arrangement or meeting is certain.


Date Joined

Specified in the award of a contract, it is the date when the contractor must begin the work on the site.



Amount withheld by an employer from employee's salary including income tax, national insurance or social security contributions, and may also include group insurance or pension fund contributions, union or association dues, authorized wage assignments, etc.


Employee Code

Employee Code is an unique identification number issued to all employees by the employer.


Employee Pension

Contribution/Payment to retirement(pension) fund paid by the employee.


Employee Status

Employee Status refers to the condition of the employee's contract of service with the company. When the employee's contract of service ceased, i.e. resigned or terminated, employee status will be inactive. If it remains in force, employee status will be active


Employment Pass

The Employment Pass is a work pass for foreign professionals working in managerial, executive or specialised jobs.


Foreign Identification Number (FIN)

Foreign Identification Number (FIN) is a unique identification number issued to all foreigners who are residing / studying, working and staying in Singapore by Immigration & Checkpoints Authority (ICA).



An award given without any claim or obligation


Gross Salary

Aggregate amount of wages received on a regular basis, usually weekly, bi-weekly, or monthly prior to any deductions such a federal and state taxes. An individual's gross salary is one factor that is used by creditors to determine if credit will be extended to the individual and his/her ability to repay the funds.


Inland Revenue Authority of Singapore (IRAS)

Inland Revenue Authority of Singapore (IRAS) is responsible for collecting income tax, property tax, goods & services tax, estate duty (for deaths occurring before 15 Feb 2008), betting taxes and stamp duty.


IRAS Tax Reference Number



Loan Repayment

The act of paying back money previously borrowed from a lender. Repayment usually takes the form of periodic payments that normally include part principal plus interest in each payment. The other common method of repayment is a lump sum with interest at maturity.


Maternity Leave Claim

The Child Development Co-Savings Act covers parents of Singapore Citizen children, including managerial, executive and confidential staff.


Under the Child Development Co-Savings Act, an employee is entitled to maternity leave benefits if:


i.The child is a Singapore Citizen;


ii.The child's parents are lawfully married; and


iii.The employee has served her employer for at least 3 months before the child's birth.




The mother is self-employed and has been engaged in a particular business / trade / profession for a continuous duration of at least 3 months before the birth of the child; and have lost income as a result of not engaging in her trade, business, profession or vocation during the maternity leave period.


If the employee does not meet criterion (i) and/or (ii) at the time of confinement, but meets them within 12 months of the child's birth, she will be eligible for the remaining maternity leave from the date she meets all the criteria. The remaining maternity leave entitlement must be taken before the child turns 12 months old. She will not be eligible for the maternity leave that has lapsed.


Ministry of Manpower (MOM)

The Ministry of Manpower is a ministry of the Government of Singapore that directs the formulation and implementation of policies related to manpower in Singapore.


Monthly Payroll

A list of employees receiving wages or salaries, with the amounts due to each


National Service Make Up Pay (MUP)

National Service Make Up Pay (MUP) is a reimbursement for any civilian income loss NSman suffered as a result of having to attend his NS training. Any NSman who is gainfully employed or self-employed is eligible to claim MUP. Note that MUP is claimable only if there is an overlap between the NSman civilian working hours and the NS training. Any loss of income suffered outside the duration of NS training will not be compensated by MINDEF.


For NSmen who are employed, employers have two options for MUP.


Option 1: Direct Reimbursement to Employers of Claims for NS Training Scheme (DIRECT) [Optional Scheme for Employers]


Employer continues to pay the NSmen as per his normal pay schedule and claim reimbursement from MINDEF.


Option 2: Payment to the NSmen


Employer will certify the MUP claim and submit it to MINDEF and NSmen will be reimbursed directly by MINDEF.