Year-End Payroll Adjustments in Singapore: A 2025 Guide for Small Business Owners

As the year draws to a close, it’s not just financial reporting you need to get right — payroll adjustments are just as important. Getting your end-of-year numbers in order ensures that your CPF contributions, employee income records, and IRAS reporting are clean, complete, and fully compliant.

Whether you’re handling payroll in-house or through external support, this guide outlines what small business owners in Singapore need to know before running their final payroll for 2024 (Year of Assessment 2025).

Why Year-End Payroll Adjustments Matter

Accurate year-end payroll ensures:

• Proper submission of employment income to IRAS
  
• CPF contributions are correct, especially on bonuses and additional wages
  
• Benefits-in-kind and share-related income are properly declared
  
• Your records match IRAS requirements under the Auto-Inclusion Scheme (AIS)
  
• Reduced risk of penalties, audits, or employee tax filing issues
  

Key Payroll Items to Review 

1. Bonuses and Additional Wages

• Record all year-end bonuses, including Annual Wage Supplement (AWS)
  
• Confirm payment dates — bonuses paid after 31 Dec 2024 fall into YA 2026
  
• Ensure CPF is applied correctly — Additional Wages are subject to a separate CPF ceiling
  
• Reconcile year-to-date bonus payments to avoid excess or missed CPF
  

2. Leave Encashment and Final Payments

• If employees encash unused leave or resign, treat leave pay as taxable income
  
• Include it in the final payslip and CPF computation
  
• Update leave records before closing out payroll data for the year
  

✅ Why juggle payroll and accounting? Get both services under one roof with real-time sync. Explore our solution here.

3. Benefits-in-Kind

• Tally up non-cash benefits such as housing, transport, insurance, or club memberships
  
• Declare them in Appendix 8A, if taxable and applicable
  
• Ensure the annual value of benefits is reflected, not just monthly breakdowns
  

4. Share Options or Employee Share Plans

• Review whether shares were granted, vested, or exercised in 2024
  
• Gains or benefits must be reported in Appendix 8B for each employee
  
• Confirm grant dates and market values for accurate IRAS submission
  

5. CPF Reconciliation and Voluntary Adjustments

• Ensure CPF contributions are correct across all months
  
• Reconcile any voluntary CPF top-ups, overpayments, or refunds
  
• If there were non-standard CPF entries, submit Form IR8S with your IR8A
  

6. Employee Data Accuracy

• Verify names, NRIC/FIN, hire and end dates
  
• Confirm income for new hires, resignations, and part-timers
  
• Update job titles and ensure all income types are categorised correctly
  

This data feeds into IRAS’ pre-filled tax returns for employees — so even small errors can cause confusion during tax season.

Auto-Inclusion Scheme (AIS) Requirements in 2025

For YA 2025, participation in AIS is mandatory if you:

• Had 6 or more employees in 2024
  
• Received a notification letter from IRAS instructing you to join
  
• Are a participating company in past years
  

AIS requires you to submit IR8A and supporting forms electronically via myTax Portal, not on paper.

Year-End Payroll Checklist (2025 Edition)

•  Bonuses, AWS, and commissions posted in the correct year
• CPF calculated for both Ordinary and Additional Wages
• Non-cash benefits reviewed and recorded
• Share option activity tracked and reported
• Leave payouts and final payments accounted for
• Employee profiles verified for accuracy
• All data prepared for AIS upload before 1 March

Being meticulous here reduces your risk of late filing, rejected returns, or last-minute corrections.

Summary

Year-end payroll adjustments are a critical part of compliance for employers in Singapore. This 2025 guide outlines what small business owners need to check before closing payroll for the year — including bonuses, CPF contributions, benefits-in-kind, and employee share options. It also covers the key IRAS forms (IR8A, Appendix 8A/8B, IR8S), Auto-Inclusion Scheme requirements, and the 1 March 2025 submission deadline. By finalising payroll accurately and early, employers can avoid penalties, reduce administrative errors, and ensure a smooth start to the new tax year.

Professional Payroll Services, Direct Support

Focus on growing your business while our in-house team manages your payroll. From payment processing to tax compliance, we handle everything under one roof. Get accurate payments, timely tax deposits, and perfect records that sync automatically with your accounting.

Experience payroll management that just works.

Ready to get started? Chat with us now, email [email protected], or use our  contact form.

Here are some articles you might find helpful:

Amending IR8A Forms in Singapore: What Employers Need to Know

Employer’s Guide to IRAS Tax Forms for Employees in Singapore

How to Prepare Payroll and Records for NSmen: A Compliance Guide for Employers in Singapore (2025)