cattleherder wrote:I've set up a business a couple of months ago, three guys in total, currently two are on the payroll. First money came in, and so we can pay ourselves finally.
None of us is a PR or a citizen of Singapore, so no CPF contributions. So it should be very simple, paying ourselves. No special allowances, nothing, just the salary, according to the MOM requirements.
I had a conversation with an accounting company we work with, who initially quoted a very sensible S$50 per person + S$100 for the CPF account activation. Upon learning that we don't need the CPF, the lady started asking what else we need, and I am awaiting a quote. "Oh, so you missed the payroll date, so we need to make modifications." While these guys know what they're doing, and they helped us greatly with the employment passes and the initial setup, their modus operandi seems to be similar to that of inkjet printers: entry fees are cheap, then they charge you premium. I'm expecting them to ask for a few hundreds, which, honestly, makes no sense. Additionally, they use their own software so they will not update my Xero account (not a big deal but still a bummer).
I am looking at
a past topic about payroll software and I did some reseach about alternatives.
Questions:
1. Does the payroll compliance warrant paying an accountant?
2. What kind of contributions are there?
3. Is it a big issue if we missed the payment date? It's only for one month. Our job offers to ourselves (taken from templates) say that the pay day is "no later than 7 days". We obviously won't sue ourselves but I am wondering if it's an issue.
4. Any feedback on Sage Payroll (price not published), QuickHR (only S$5 a month!), SimplePay Xero plug-in (S$14 per employee per month), Talenox (S$40 per month under 5 employees)?
My background: I formed a company with another American in 2004. He was PR, for the first two years I was EP, then PR. When we started, we paid only the two of us. In our heyday, we paid about 16 people, some as employees, some as contractors. We never used an accountant and we never used any kind of payroll software. Such software is absolute overkill unless you are offering a smorgasbord of employee deduction opportunities... medical insurance, retirement plans, stock options, etc.
What you do need is a decent chart of accounts and an accounting package. We used Sage... others are probably equal or better.
Unless you are offering deductions for medical insurance, etc, there are no deductions from payroll for an EP. Cut a check, record the expense by employee. End of year, fill out an IR8A with total earnings and send it into IRAS. Next time employee logs in, IRAS has tax due all calculated. It's a no brainer.
There's a couple of wrinkles. If an EP leaves, you have to be bright enough to withhold last check, let IRAS know of termination, have employee pay tax, then send out remaining check amount.
I can see no reason whatsoever to pay money for a payroll program for 3 people. Seriously, you could keep it all in an Excel spreadsheet and be OK, although I am a fan of proper double entry bookkeeping.
As for "compliance"... what is that? Sure, if you are big company and you don't make payroll dates, someone is going to come and sniff around... the gahmen doesn't like to see 50 people not get paid on time... that's red flags everywhere.
But... three people? Which one of you is going to turn the other one in for failure to make payroll on time? Compliance is a non issue. And... unless you have no money, you do need to be disciplined enough to make your self imposed deadlines. One of these days you'll make enough money to pay GST... and they do get bent out of shape if you don't pay on time.
One of the biggest pains in the ass is employee expenses, especially if your employees travel. These expenses are reimbursable, tax free, to the employee and must be included in the payroll check, but not in IR8A reporting.
My wife handled all of our transactions and put the entries into Sage. Our accountant would quarterly reconcile. When my wife went on to other things, our account took over posting of a couple hundred transactions a month for $100 to $150.
