You will be able to read a payslip from gross pay to net pay and explain how each line gets you from one to the other.
A payslip is a calculation: gross pay at the top, deductions taken off it, and net pay at the bottom. To check yours, read each line, decide whether it adds to your pay, takes something away or is there for information only, and then confirm that the sums work.
It is the one financial document most employees get every month, and most people only look at the final number, net pay, because that is what reaches their bank account. Every line above net pay is a step in the calculation, and an error in any step makes the final figure wrong. Nobody else checks your payslip on your behalf.
Start at the top with gross pay, which is everything you earned in the pay period before deductions. It is your basic salary plus any allowances, overtime, commission or bonus paid that month. Check it against your contract. If a contractual allowance is missing, such as a fixed transport allowance, gross pay is already short, and so is every figure below it.
Next come the deductions. The largest is usually your employee CPF contribution. This is your own money, moved into your CPF accounts instead of being paid out as cash. The rate depends on your age and income level, and the government reviews CPF rates from time to time, so check the current rate table on the CPF Board website instead of relying on an old figure you remember.
Your employer also pays CPF for you, on top of your salary. Many payslips show this employer share for information only, and it is not deducted from your pay. If your net pay looks as if both your share and your employer's share were deducted, ask HR.
You may also see a small deduction for a self-help group fund: CDAC, ECF, MBMF or SINDA. This deduction is made by default, based on your race or religion. Each fund's website explains how to change your contribution.
Any other deduction, such as repaying a staff loan, should be one you agreed to in writing. If you can't remember agreeing to a deduction, find out what it is.
Then do the arithmetic. Net pay should equal gross pay minus all deductions, and it should match the amount that arrived in your bank account to the cent. If the two differ, either the payslip or the transfer is wrong. Look into it the same week you notice it.
Under Singapore's Employment Act, employers must give itemised payslips to employees the Act covers. The Ministry of Manpower (MOM) publishes the list of items a payslip must show, including the employer's name, your name, the date of payment, the salary period, basic salary, allowances, deductions, overtime pay and hours, and net pay. In Lesson 1.2 you'll check your own payslip against that list.
Small payroll errors tend to repeat. An allowance left off once is often left off every month until someone notices, and a CPF deduction calculated on the wrong wage stays wrong every month. An error you catch in the first month takes one quick email to HR. The same error caught after a year means twelve months of paperwork, and possibly a tax and CPF correction as well.
Keep every payslip in one folder. Payslips are the first thing you'll be asked for when you prove your income for a loan or a tenancy, or when you raise a pay dispute. Having them together, and knowing what each line means, puts you in a stronger position if any of those come up.
Try it now with your most recent payslip. Label every line as an addition, a deduction or information only. Then check that gross pay minus the deductions equals net pay, and that net pay equals what arrived in your bank account. Write down any line you can't explain. Those questions are where the rest of this module starts.
Take your latest payslip and mark each line as an addition, a deduction or information only. Then check the net pay against the amount credited to your bank.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).