Employees are an organisation’s biggest cost and its biggest risk. Dealing with wages and incentives - and the employment taxes and other statutory on-costs paid to the authorities - as well as administration of the process is complicated and fraught with risks. Organisations are increasingly complex with businesses in multiple territories and complex interactions among stakeholders. Added to this are new business models and an increasingly non-traditional workforce mix, bringing together employees and a vast array of different contractual arrangements, ‘gig’ talent and other contingent workers.
Do you know how much you pay in employment taxes and what element of this is controllable? How do you keep up to date with current or impending legislative change? Are you using your payroll function to incorporate people analytics and reporting capabilities?
As countries around the world emerge from the COVID-19 pandemic, there continues to be a focus on employment tax and employee support related measures. For some jurisdictions this means the end of support measures and also of COVID-19 related exemptions. It also, in some cases, heralds an increased scrutiny from tax authorities regarding historic activities.
There is also a clear recognition that the world of work is changing and, in some instances, this is reflected in the way in which governments are looking to continue the support for hybrid working through employment tax measures. And, of course, this edition also reflects that for many countries there has been the start of a new tax year.
PwC’s employment tax and cost specialists take a proactive and integrated approach to the often neglected on-costs associated with remunerating a workforce. We also look at how effectively company employment tax functions support corporate business needs and strong compliance and governance. We look for ways to reduce a company’s workforce costs without reducing the size of its workforce. We can help with:
We help you understand and comply with your employer taxation obligations and to prepare for tax authority reviews. We help you validate your internal processes to control risks and costs and - if compliance failures occur - we work with you on remediation and can negotiate with tax authorities on your behalf.
The Minister has announced via the Budget 2022 that from Year of Assessment 2024 (income year 2023), a marginal tax rate of 23% would apply to annual chargeable income exceeding S$500,000 and up to S$ 1 million, with a 24% rate applicable to annual chargeable income exceeding S$ 1 million. You are welcome to use our Personal Income Tax Calculator to estimate your annual Singapore individual income tax payable from YA 2024 onwards to see how the increase in personal income tax rates will impact you.
We help you understand and mitigate current and emerging employment risks caused by legislation and regulation - including minimum wage, pay ratios and other pay fairness issues. We help you strengthen your risk management controls, policies and procedures. We work closely with PwC’s employment lawyers to identify risks related to employment structures and contracts.
We help you understand your total employment tax costs and to identify the controllable element. We help you restructure pay and benefits arrangements, such as flexible working arrangements and cost-effective benefit schemes to reduce employer costs. We help you develop policies and processes to support cost reduction strategies.
We work with our clients to help develop their employment tax strategy, prioritising key compliance imperatives, with particular focus on risk, reporting and systems in support of corporate business drivers.
Suk Peng Ding
Partner, Employment Tax, PwC Singapore
Tel: +65 9171 9390