Payroll Service Agreement Sample
- a22162
- Jul 14
- 12 min read
Updated: Jul 15
Singapore Payroll Service Agreement Sample
Here's a sample payroll service agreement for Singapore.
PAYROLL SERVICES AGREEMENT
This Payroll Services Agreement (the "Agreement") is made and entered into effective as of the [Day] day of [Month], [Year] (the "Effective Date"),
BETWEEN:
[CLIENT COMPANY NAME] (Company Registration No. [Client Company UEN])
a company incorporated under the laws of Singapore and having its registered address at [Client Company Address]
(hereinafter referred to as the "Client")
AND
BESTAR HR CONSULTING PTE. LTD. (Company Registration No. 202337005D)
a company incorporated under the laws of Singapore and having its registered address at 23 New Industrial Road, #04-08 Solstice Business Center, Singapore 536209
(hereinafter referred to as the "Provider")
(The Client and the Provider are hereinafter collectively referred to as the "Parties" and individually as a "Party").
WHEREAS:
A. The Client desires to outsource certain payroll-related functions to the Provider, and the Provider is in the business of providing such payroll services.
B. The Provider has the necessary expertise, resources, and systems to provide comprehensive payroll services to the Client in compliance with all applicable laws and regulations in Singapore.
C. The Parties desire to enter into an agreement setting forth the terms and conditions under which the Provider will render payroll services to the Client.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the Parties agree as follows:
1. SCOPE OF SERVICES
The Provider shall provide the following payroll services to the Client (hereinafter referred to as the "Services"):
1.1 Monthly Payroll Processing:
Calculation of gross salaries, allowances, and other emoluments based on data provided by the Client.
Calculation of statutory deductions including, but not limited to, Central Provident Fund (CPF) contributions (both employer and employee portions), Skills Development Levy (SDL).
Calculation of other authorized deductions (e.g., loan repayments, insurance premiums) as instructed by the Client.
Generation of payslips (electronic or physical, as agreed).
Preparation of payroll reports for the Client's review and approval.
1.2 Statutory Contributions Remittance:
Preparation of CPF submission files for direct submission by the Client or submission on behalf of the Client (with Client's explicit authorization and access).
Assistance with SDL calculations and reporting.
1.3 Bank GIRO File Generation:
Generation of bank GIRO files for salary disbursement to employees' bank accounts (subject to Client's direct authorization and upload to their banking platform).
1.4 Annual Income Tax Reporting (IR8A/IR21):
Preparation of Form IR8A for all employees, including an auto-inclusion file for IRAS (if applicable and authorized by Client).
Preparation of Form IR21 for foreign employees ceasing employment in Singapore (where applicable and with timely notification from Client).
1.5 Ad-hoc Services (as agreed and separately chargeable):
Generation of ad-hoc reports.
Assistance with audit queries related to payroll.
Processing of claims (e.g., expense claims, medical claims) if integrated with payroll.
Support for government grants or schemes related to payroll.
2. CLIENT'S RESPONSIBILITIES
The Client shall be responsible for:
2.1 Data Provision:Â Providing accurate, complete, and timely payroll data to the Provider, including but not limited to:
Employee new hires, resignations, and changes in employment status.
Salary adjustments, bonuses, commissions, and allowances.
Leave records (paid and unpaid).
Overtime hours.
Expense claims and other variable payments.
Any other information necessary for accurate payroll processing.
2.2 Timely Approvals:Â Reviewing and approving payroll reports and other documents prepared by the Provider within the agreed timelines.
2.3 Fund Availability:Â Ensuring sufficient funds are available in the Client's designated bank account for timely salary disbursements and statutory contributions.
2.4 Compliance:Â Ensuring overall compliance with Singapore's employment laws, including but not limited to the Employment Act, CPF Act, Income Tax Act, and any other relevant legislation. The Provider will process payroll based on the information provided by the Client and the Provider's understanding of current regulations.
2.5 HR Administration:Â Managing all aspects of human resource administration, including employee contracts, performance management, disciplinary actions, and benefits administration, which are outside the scope of this Agreement unless explicitly stated otherwise.
2.6 Notification of Changes:Â Promptly notifying the Provider of any changes in legislation or internal policies that may affect payroll processing.
3. FEES AND PAYMENT TERMS
3.1 Fees:Â The Client shall pay the Provider fees for the Services as detailed in Schedule A (Fees Schedule) attached hereto and forming an integral part of this Agreement.
3.2 Invoicing:Â The Provider shall issue invoices to the Client on a monthly basis, typically by the 5th day of each month for the preceding payroll period.
3.3 Payment:Â All invoices are due and payable within 14 days from the date of the invoice.
3.4 Late Payment:Â Without prejudice to any other rights or remedies of the Provider, if the Client fails to pay any amount due under this Agreement on the due date, the Client shall pay interest on the overdue amount at the rate of 5% per annum, compounded monthly, from the due date until the date of actual payment.
3.5 Review of Fees:Â The Parties shall review the fees annually, or as otherwise agreed, and may adjust them based on changes in scope, complexity, or market rates. Any adjustment shall be mutually agreed upon in writing.
4. TERM AND TERMINATION
4.1 Term:Â This Agreement shall commence on the Effective Date and shall continue for an initial term of one (1) year ("Initial Term"), unless terminated earlier in accordance with the provisions of this Agreement.
4.2 Renewal:Â Upon expiration of the Initial Term, this Agreement shall automatically renew for successive terms of one (1) year ("Renewal Term"), unless either Party gives written notice of non-renewal to the other Party at least sixty (60) days prior to the end of the then-current term.
4.3 Termination for Convenience:Â Either Party may terminate this Agreement for convenience by providing sixty (60) days' prior written notice to the other Party.
4.4 Termination for Cause:Â Either Party may terminate this Agreement immediately by written notice to the other Party if:
The other Party commits a material breach of any of its obligations under this Agreement and fails to remedy such breach within thirty (30) days after receipt of written notice specifying the breach.
The other Party becomes insolvent, makes any assignment for the benefit of creditors, files a petition for bankruptcy, or has a receiver or trustee appointed for its assets.
4.5 Effect of Termination:Â Upon termination of this Agreement for any reason:
The Client shall pay all outstanding fees for Services rendered up to the effective date of termination.
The Provider shall cooperate with the Client to ensure a smooth transition of payroll services, including providing all necessary payroll data, reports, and records to the Client in a mutually agreeable format.
All provisions of this Agreement which by their nature should survive termination, including but not limited to confidentiality, intellectual property, and limitation of liability, shall survive termination.
5. CONFIDENTIALITY
5.1 Definition:Â "Confidential Information" means all non-public information, whether written or oral, disclosed by one Party (the "Disclosing Party") to the other Party (the "Receiving Party") relating to the Disclosing Party's business, including but not limited to, financial information, employee data, trade secrets, processes, and technical information.
5.2 Obligations:Â The Receiving Party agrees to maintain the confidentiality of the Disclosing Party's Confidential Information and not to disclose such Confidential Information to any third party without the prior written consent of the Disclosing Party. The Receiving Party shall use Confidential Information solely for the purpose of performing its obligations under this Agreement.
5.3 Exclusions:Â The obligations of confidentiality shall not apply to information that: (a) is or becomes publicly available through no fault of the Receiving Party; (b) was known to the Receiving Party prior to its disclosure by the Disclosing Party without breach of any confidentiality obligation; (c) is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information; or (d) is required to be disclosed by law or by order of a court or governmental agency, provided that the Receiving Party gives prior written notice to the Disclosing Party to allow it to seek a protective order or other appropriate remedy.
5.4 Data Protection:Â Both Parties shall comply with the Personal Data Protection Act 2012 (PDPA) of Singapore concerning all personal data processed under this Agreement. The Provider shall implement appropriate technical and organizational measures to protect personal data against unauthorized or unlawful processing and against accidental loss, destruction, or damage.
6. REPRESENTATIONS AND WARRANTIES
6.1 Provider's Warranties:Â The Provider represents and warrants that:
It has the necessary experience, qualifications, and resources to perform the Services in a professional and workmanlike manner.
The Services will be performed in accordance with generally accepted industry standards and practices.
It will comply with all applicable laws and regulations in Singapore relevant to the provision of the Services.
6.2 Client's Warranties:Â The Client represents and warrants that:
It has the full power and authority to enter into and perform its obligations under this Agreement.
All information provided to the Provider will be accurate, complete, and timely.
7. LIMITATION OF LIABILITY
7.1 General:Â Neither Party shall be liable to the other for any indirect, incidental, consequential, special, punitive, or exemplary damages, including but not limited to, loss of profits, revenue, data, or business opportunity, arising out of or in connection with this Agreement, regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise, even if such Party has been advised of the possibility of such damages.
7.2 Provider's Liability Cap:Â The Provider's total aggregate liability to the Client under or in connection with this Agreement, whether in contract, tort (including negligence), or otherwise, shall not exceed the total fees paid by the Client to the Provider for the Services during the twelve (12) month period immediately preceding the event giving rise to the claim.
7.3 Exclusions:Â Nothing in this Agreement shall limit or exclude the liability of either Party for:
Death or personal injury caused by its negligence.
Fraud or fraudulent misrepresentation.
Any other liability that cannot be excluded or limited by law.
8. INDEMNIFICATION
8.1 Client Indemnity:Â The Client shall indemnify, defend, and hold harmless the Provider, its officers, directors, employees, and agents from and against any and all claims, liabilities, damages, losses, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with:
Any inaccurate, incomplete, or untimely data provided by the Client to the Provider.
The Client's failure to comply with any applicable laws, regulations, or statutory obligations.
Any breach by the Client of its representations, warranties, or obligations under this Agreement.
8.2 Provider Indemnity:Â The Provider shall indemnify, defend, and hold harmless the Client, its officers, directors, employees, and agents from and against any and all claims, liabilities, damages, losses, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with:
The Provider's gross negligence or willful misconduct in the performance of the Services.
Any breach by the Provider of its confidentiality obligations under this Agreement.
9. FORCE MAJEURE
Neither Party shall be liable for any delay or failure in performance of its obligations under this Agreement to the extent such delay or failure is caused by an event of Force Majeure. "Force Majeure" means any event beyond the reasonable control of the affected Party, including but not limited to, acts of God, war, hostilities, rebellion, revolution, civil commotion, strikes, lockouts, epidemics, pandemics, government restrictions, or natural disasters. The affected Party shall promptly notify the other Party of the Force Majeure event and use reasonable efforts to mitigate its impact.
10. GOVERNING LAW AND DISPUTE RESOLUTION
10.1 Governing Law:Â This Agreement shall be governed by and construed in accordance with the laws of the Republic of Singapore.
10.2 Dispute Resolution:Â Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be first resolved through good faith negotiations between the Parties.
10.3 Mediation:Â If the dispute is not resolved by negotiation within thirty (30) days, the Parties agree to attempt to resolve the dispute through mediation in accordance with the Singapore Mediation Centre (SMC) Mediation Procedure.
10.4 Arbitration:Â If the dispute is not resolved through mediation, the Parties agree to submit the dispute to arbitration administered by the Singapore International Arbitration Centre (SIAC) in accordance with the SIAC Rules. The seat of the arbitration shall be Singapore. The language of the arbitration shall be English. The number of arbitrators shall be one (1).
11. GENERAL PROVISIONS
11.1 Entire Agreement:Â This Agreement, including its Schedules, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written.
11.2 Amendments:Â No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by duly authorized representatives of both Parties.
11.3 Severability:Â If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be severed from the Agreement, and the remaining provisions shall remain in full force and effect.
11.4 Assignment:Â Neither Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld.
11.5 Notices:Â All notices and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, sent by recognized courier service, or sent by email with confirmation of receipt, to the addresses set forth below or such other address as either Party may designate by written notice to the other.
If to Client:
[Client Company Name]
[Client Company Address]
Attention: [Client Contact Person Name]
Email: [Client Contact Email]
If to Provider:
Bestar HR Consulting Pte. Ltd.
23 New Industrial Road, #04-08 Solstice Business Center, Singapore 536209
Attention: HR Consulting Dept.
Email: admin at bestar.asia
11.6 Counterparts:Â This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date first above written.
FOR AND ON BEHALF OF [CLIENT COMPANY NAME]:
Name:
Title:
Date:
FOR AND ON BEHALF OF BESTAR HR CONSULTING PTE. LTD.:
Name:
Title: CEO
Date:
__________
SCHEDULE A – FEES SCHEDULE
1. Per Employee Fee:Â
* S$ [Amount] per employee per month
2. Base Monthly Fee:Â
* S$ [Amount] per month:
3. One-Time Setup Fee:
* S$ [Amount] (for initial setup of payroll system, employee data migration, etc.)
* S$ 50 (for CPF Submission Account registration)Â
* S$ 50 (for SDL Account application with GoBusiness)
4. Ad-hoc Services Fees:
* IR8A Preparation:Â S$ [Amount] per instance
* IR21 Processing:Â S$ [Amount] per instance
* Auto-Inclusion Scheme (AIS) Registration:Â S$ 150 per instance
* Ad-hoc Reports:Â S$ [Amount] per hour / S$ [Amount] per report
* Payroll Audit Support:Â S$ [Amount] per hour
* Claims Processing (if applicable):Â S$ [Amount] per employee per month or S$ [Amount] per claim
5. Out-of-Pocket Expenses:
* Any pre-approved out-of-pocket expenses (e.g., courier charges for physical payslips) will be billed at cost.
6. Payment Terms:
* Invoices issued on the 5th of each month.
* Payment due within 14 days of invoice date.
Note:Â All fees are exclusive of Goods and Services Tax (GST), which will be added at the prevailing rate if applicable.
Important Considerations:
Service Level Agreements (SLAs):Â Consider adding a separate SLA or incorporating specific performance metrics and response times within the agreement to ensure service quality.
Review Clauses:Â Include clauses for periodic review of fees and service scope.
Exit Strategy:Â Detail the transition process in case of termination, including data handover and support for the new provider.
How Bestar can Help
Professional payroll services in Singapore can offer significant advantages to businesses of all sizes, from startups and SMEs to large corporations. Here's a breakdown of how we help:
1. Ensures Compliance with Complex Regulations
Singapore has stringent and frequently updated labor laws and tax regulations. Bestar is experts in:
Central Provident Fund (CPF) Contributions: Accurately calculating and submitting employer and employee CPF contributions based on age, residency status, and wage ceilings.
Income Tax (IRAS) Reporting: Preparing and submitting Form IR8A for all employees annually, and Form IR21 for foreign employees ceasing employment. Many also offer auto-inclusion services with IRAS.
Skills Development Levy (SDL):Â Calculating and contributing to the SDL.
Employment Act Requirements: Adhering to rules regarding timely salary payments (within 7 days after the end of the salary period), overtime calculations, leave entitlements (annual, sick, maternity, paternity), and payslip issuance.
Other Levies: Such as the Foreign Worker Levy (FWL), where applicable.
Staying Updated: We constantly monitor changes in legislation from the Ministry of Manpower (MOM), IRAS, and CPF Board, ensuring your business remains compliant and avoids costly penalties, fines, or legal issues.
2. Saves Time and Reduces Administrative Burden
Payroll is a detail-heavy and time-consuming process. Outsourcing it allows businesses to:
Free up Internal Resources: HR or finance teams can focus on strategic initiatives like talent management, employee engagement, and business growth, instead of getting bogged down in repetitive administrative tasks.
Automate Processes: Bestar uses advanced payroll software and automated systems that minimize manual data entry and calculations, leading to faster and more efficient payroll runs.
Streamline Operations: We handle the end-to-end payroll process, from salary computation and deductions to payslip generation and statutory submissions.
3. Improves Accuracy and Minimizes Errors
Even small mistakes in payroll can lead to significant problems, including employee dissatisfaction, over/underpayments, and penalties from authorities. Professional payroll services offer:
Specialized Expertise:Â Our teams are dedicated payroll specialists with deep knowledge of Singapore's payroll framework and best practices.
Robust Systems:Â We utilize secure and compliant systems designed to minimize human error.
Checks and Balances:Â Bestar has multi-tiered verification processes to ensure accuracy before final processing.
4. Enhances Data Security and Confidentiality
Payroll involves highly sensitive employee data (salaries, bank details, personal information). Bestar invests heavily in:
Secure Infrastructure: Encrypted systems, access-controlled environments, and robust cybersecurity measures to protect confidential data from breaches or unauthorized access.
PDPA Compliance:Â We are well-versed in the Personal Data Protection Act (PDPA) 2012 and implement measures to ensure compliance.
Reduced Internal Risk:Â Minimizes the risk of internal fraud or data leakage associated with in-house payroll handling.
5. Provides Scalability and Flexibility
As a business grows or experiences changes in its workforce, payroll needs can fluctuate. Outsourced payroll solutions offer:
Adaptability: We can easily adjust to accommodate changes in employee headcount, salary structures, or regulatory requirements without requiring you to invest in new internal systems or staff.
Support for Growth: Seamlessly handles workforce expansion, allowing your business to scale cost-effectively.
6. Offers Cost Efficiency
While there's a service fee, outsourcing payroll can often be more cost-effective than managing it in-house, by eliminating:
Staffing Costs: No need to hire, train, or retain dedicated in-house payroll staff, including salaries, benefits, and training expenses.
Software and Infrastructure Costs: No need to purchase, maintain, and update expensive payroll software or IT infrastructure.
Penalty Avoidance:Â Reduces the risk of costly fines and penalties due to non-compliance or errors.
7. Access to Advanced Technology and Reporting
Bestar uses sophisticated payroll systems that offer:
Real-time Reporting: Access to detailed payroll reports, allowing businesses to track costs, analyze trends, and make informed financial decisions.
Integration: Many solutions can integrate with existing HR and accounting systems (e.g., ERP systems) for a more holistic view of business operations.
Employee Self-Service Portals: Provide portals for employees to access payslips, tax forms, and leave balances, reducing queries to HR/payroll staff.
In essence, professional payroll services allow businesses in Singapore to delegate a critical yet complex function to experts, ensuring accuracy, compliance, and efficiency, thereby freeing up valuable time and resources to focus on core business activities and growth.