Letter of Employment for myself when I'm the director and employee

[kingboy]

I incorporated a Pte Ltd company as sole director. I am the 100% owner and the only employee in the company at the moment. As I am the director of the company and at the same time paying myself a monthly salary as an employee, may I ask whether is it normal to issue a letter of employment myself and sign it myself? I find it strange to see the employee name is same as the one who sign the letter. Is there any proper way to handle this? Thank you.

[Myasis Dragon]

I incorporated a Pte Ltd company as sole director. I am the 100% owner and the only employee in the company at the moment. As I am the director of the company and at the same time paying myself a monthly salary as an employee, may I ask whether is it normal to issue a letter of employment myself and sign it myself? I find it strange to see the employee name is same as the one who sign the letter. Is there any proper way to handle this? Thank you.

You don't need a letter of employment because a letter of employment is a contractual obligation between a company and its employees. But, you are the company, so what are you going to do... sue yourself because you think you're not being paid enough?

I would advise, however, that you properly allocate your salary and directors fees. Directors fees are not subject to CPF. So if you decide to pay yourself lots of directors fees and not much salary, IRAS may visit you and force you to take a salary that would be the norm for your position and business.

[kingboy]

I incorporated a Pte Ltd company as sole director. I am the 100% owner and the only employee in the company at the moment. As I am the director of the company and at the same time paying myself a monthly salary as an employee, may I ask whether is it normal to issue a letter of employment myself and sign it myself? I find it strange to see the employee name is same as the one who sign the letter. Is there any proper way to handle this? Thank you.

You don't need a letter of employment because a letter of employment is a contractual obligation between a company and its employees. But, you are the company, so what are you going to do... sue yourself because you think you're not being paid enough?

I would advise, however, that you properly allocate your salary and directors fees. Directors fees are not subject to CPF. So if you decide to pay yourself lots of directors fees and not much salary, IRAS may visit you and force you to take a salary that would be the norm for your position and business.

Hi Myasis Dragon, thank you so much for your reply. I will be drawing a monthly salary from the revenue and paying CPF. May I seek for your input whether is it a proper way where I issue myself a payslip as an employee "Senior Consultant" so that I could use it to apply credit card or maybe loan in near future?

[Myasis Dragon]

I incorporated a Pte Ltd company as sole director. I am the 100% owner and the only employee in the company at the moment. As I am the director of the company and at the same time paying myself a monthly salary as an employee, may I ask whether is it normal to issue a letter of employment myself and sign it myself? I find it strange to see the employee name is same as the one who sign the letter. Is there any proper way to handle this? Thank you.

You don't need a letter of employment because a letter of employment is a contractual obligation between a company and its employees. But, you are the company, so what are you going to do... sue yourself because you think you're not being paid enough?

I would advise, however, that you properly allocate your salary and directors fees. Directors fees are not subject to CPF. So if you decide to pay yourself lots of directors fees and not much salary, IRAS may visit you and force you to take a salary that would be the norm for your position and business.

Hi Myasis Dragon, thank you so much for your reply. I will be drawing a monthly salary from the revenue and paying CPF. May I seek for your input whether is it a proper way where I issue myself a payslip as an employee "Senior Consultant" so that I could use it to apply credit card or maybe loan in near future?

Yes, you need to maintain a payroll system for yourself, even if it is just a spreadsheet showing monthly salaries, CPF withheld, and directors fees. You will need to prepare an IR8A for IRAS so that your income tax liability can be computed.

My company used direct deposit for my partner and me, then emailed a PDF showing gross amounts, CPF withholding, and net amounts paid.