# Payroll in-house, on software, or outsourced

URL: https://skillsforce.com.sg/insights/payroll-in-house-software-or-outsourced-singapore
Title: Payroll in-house, software or outsourced in Singapore | Skillsforce
Description: Spreadsheet, software, bureau or outsourced payroll in Singapore: the honest four-way comparison, and where CPF and IRAS liability actually sits.
Updated 07 August 2026. First published 07 August 2026. Author: Skillsforce (People-operations team)
Category: payroll-cpf

Every model of running payroll in Singapore answers to the same two regulators. The difference between a spreadsheet, software, a bureau and full outsourcing is who does the work and what breaks, not who is on the hook for it.

## Should a small company in Singapore run payroll in-house, on software, or outsource it?

All four models, in-house spreadsheets, payroll software, a bureau, or full outsourcing, leave the employer legally responsible for CPF and IRAS filings under the Income Tax Act and CPF Act. The right model depends on headcount and complexity, not liability: a stable, simple payroll of a handful of staff can genuinely stay on a spreadsheet.

## Key points

- Four models exist: in-house manual, payroll software, a bureau or managed service, and full HR and payroll outsourcing. They differ in who does the computing, not in who is legally responsible for the result.
- The Income Tax Act puts the annual return duty on 'every employer' (section 68), and the CPF Act's definition of employer is written to catch anyone paying wages on the employer's behalf, not to remove the employer from the picture.
- One-Stop Payroll, IMDA's Pre-Approved Solutions List and the Productivity Solutions Grant are real, current infrastructure. PSG in particular is dated: it is scheduled to fold into a new EDGE framework in the second half of 2026.
- Buying software answers the arithmetic question, not the compliance one. Individual platforms carry real, verified gaps, some do not support benefits-in-kind reporting, some generate a bank file that still needs manual upload.
- A minimum monthly fee dominates outsourced and bureau pricing at very small headcount, exactly the size band where staying in-house is otherwise the cheapest option.
- Staying in-house at a small, stable headcount is a legitimate, permanent choice, not a stopgap to be embarrassed about.

Ask five Singapore employers how they run payroll and you will get five different answers: a spreadsheet plus CPF EZPay, software someone in finance operates, a bureau that processes the numbers and hands back a report, or a provider running the whole function. All four are legitimate. None of them changes who the Income Tax Act and the CPF Act are actually addressing when a return is wrong.

That is the fact most buyers have backwards. Paying someone else to run payroll changes who does the computing, not who answers for the result. What should actually decide the model is more mundane: headcount, how much of the pay is fixed versus variable, whether anyone holds a work pass, and whether the person who understands the file is one person or something that survives them leaving.

This is a genuine four-way comparison, including the honest case for staying exactly where you are.

## What are the four ways to run payroll in Singapore?

Four models, roughly in order of how much the employer still does directly:

| Aspect | In-house manual | Payroll software | Bureau or managed service | Full HR and payroll outsourcing |
|---|---|---|---|---|
| Who computes wages, CPF and SDL | You, in a spreadsheet, with CPF EZPay auto-computing CPF and, for citizens and Permanent Residents, SDL | You, inside the software, which computes and often generates the CPF file | The provider, from data you supply each cycle | The provider, as part of running HR and payroll together |
| Who files with CPF Board and IRAS | You, via CPF EZPay and myTax Portal | Usually you, submitting a file the software generates; some platforms integrate directly | Usually the provider, on your authority | The provider, on your authority |
| Who is legally liable if a filing is wrong | You | You | You | You |
| What you still do every month | Data entry, checks, submission, payment | Approve runs, review exceptions, keep the software's data current | Supply changes, new hires, leavers, no-pay leave, review the output | Supply changes, review the output |
| Typical cost shape | Your own time, no vendor fee | Per-employee software fee, sometimes a base fee | Base or minimum monthly fee plus per head, often with set-up and add-on charges | Similar shape to a bureau, usually bundled with HR administration |
| What tends to break | A formula nobody has reopened since it was built | A platform that does not cover a form or a bank file type nobody checked before buying | A cycle where the data you supplied was wrong, so the provider filed wrong data correctly | The same, one layer further from your own records |
| Genuinely suits | A handful of fixed, simple salaries | Enough repetitive computation to be worth automating, with someone able to own it | No one on the team who owns payroll as a real job | The same, plus wanting HR administration handled alongside it |

## Who is legally responsible, whichever model you pick

Every payroll delivery model in Singapore, spreadsheet, software, bureau or full outsourcing, leaves the employer as the party legally liable for CPF and IRAS filings, and that is not a Skillsforce opinion. It follows from how the statutes are written.

[Section 68 of the Income Tax Act](https://sso.agc.gov.sg/Act/ITA1947?ProvIds=pr68-) puts the annual employment-income return on "every employer", not a software vendor, not a bureau. Section 94 sets the general penalty for simply not filing: a fine of up to S$5,000, and in default of payment, imprisonment of up to six months. Section 95 covers a negligent incorrect return specifically, at a penalty equal to double the tax undercharged, which is the tier that actually fits a genuine mistake rather than an intent to deceive.

The CPF Act reaches the same way. Its definition of "employer" names the company, but it is also drafted to catch "any manager, agent or person responsible for the payment of wages... on behalf of an employer." Read plainly, that does not narrow who can be pursued when payroll is delegated to an agent; it widens it. Nothing in either Act treats a software vendor or a bureau as a substitute address for the employer's own statutory return.

Neither CPF Board nor IRAS publishes a single sentence saying "you are still liable if you outsource"; the point is built from the statutes above, not quoted from a regulator. What CPF Board does say is operational, and it is addressed to the employer: its guidance on [declaring accurate wage information](https://www.cpf.gov.sg/employer/employer-obligations/declaring-accurate-wage-information) tells employers to verify that wages are declared accurately, and states that "periodic audits and investigations will be conducted by the CPF Board to check on the accuracy of wage information submitted." The check happens after the fact, against the employer's own submission, not against whichever tool or provider produced the numbers. The calendar underneath does not change either: CPF and SDL fall due on the last day of the month regardless of who is keying the numbers, and the [full statutory payroll calendar](/insights/singapore-employer-payroll-compliance-calendar) applies whichever model you use.

## What each model actually involves

### In-house manual

A spreadsheet, built once and extended as people join, paired with CPF EZPay for the actual submission. Every input is typed by someone on your team: ordinary wages, additional wages, the CPF Submission Number, each employee's citizenship and PR status if it applies. [How CPF submission actually works](/insights/how-to-submit-cpf-contributions-singapore) is worth reading before assuming this is simple; the process itself is short, but it rewards someone who does it the same careful way every month.

The honest failure mode here is not a dramatic one. It is a formula that was correct the month it was built and has not been reopened since, quietly producing the same small error every cycle. We cover exactly how that happens, and what it costs, in [what actually goes wrong on a payroll spreadsheet](/insights/payroll-spreadsheet-risk-cpf-ir8a-singapore).

Genuinely fine for a small, stable headcount with fixed salaries and no work-pass holders. Gets harder fast once any of those stop being true.

### Payroll software

The employer still operates the system, but the system computes CPF and SDL and often generates the file CPF Board or IRAS expects, rather than a person building the arithmetic from scratch. Coverage varies more than the category name suggests: our own check of Singapore HR and payroll software found real, named gaps on individual platforms, one that does not support benefits-in-kind or stock-option appendices (those still go through myTax Portal manually), one whose bank file is GIRO-only, and one where disbursement still means uploading a file to the bank yourself. Buying software answers the arithmetic question. It does not, by itself, answer the compliance question; that still needs checking line by line against what you actually need it to do.

### A payroll bureau or managed service

The provider runs the calculation and the filing on data you supply each cycle: new hires, leavers, no-pay leave, changes in wages. You are no longer the one keying CPF Submission Numbers, but you are still the one telling the bureau what changed, and a bureau that files wrong data correctly still produces a wrong filing. This model earns its keep once no one on the team wants to own payroll as an actual job, but it is not a walk-away service; the review still has to happen on your side.

### Full HR and payroll outsourcing

The broadest version: payroll runs alongside HR administration, so leave, claims and employment records sit with the same provider as the pay run. Useful where the gap is not just payroll but the person who used to hold the whole HR function. The structural point does not change though; the return the provider files is still filed on your authority, under your CPF Submission Number and your UEN.

## Government infrastructure worth knowing about

Three pieces of Singapore government infrastructure sit underneath the software and outsourcing options, and most comparisons skip them entirely.

**[One-Stop Payroll](https://www.onestoppayroll.gov.sg/about/about-osp/)** is a joint effort by IRAS, CPF Board, MOM and GovTech. OSP-ready payroll software can submit annual salary data to IRAS, monthly CPF contribution information to CPF Board, and responses to MOM's Occupational Employment Dataset, from a single platform via API, rather than three separate logins. It soft-launched in August 2024. You reach it through your payroll software, not a portal you log into directly, and it does not appear to extend to IR21 tax clearance, SDL, itemised payslips or bank disbursement; none of those are named among the submissions it covers.

**IMDA's Pre-Approved Solutions List**, under the SMEs Go Digital programme, covers HR and payroll as one category among several, alongside accounting, invoicing, inventory, customer management, e-commerce and cybersecurity, for solutions IMDA assesses as market-proven and cost-effective. The current roster sits on a searchable government listing rather than a fixed page, and is worth checking directly rather than assuming any given product is on it.

**[Enterprise Singapore's Productivity Solutions Grant](https://www.enterprisesg.gov.sg/financial-support/productivity-solutions-grant)** funds up to 50% of eligible costs, capped at S$30,000, for a local SME (registered and operating in Singapore, at least 30% local equity, and either group annual sales turnover of no more than S$100 million or a group employment size of no more than 200 employees) buying a pre-approved solution. As at 7 August 2026, PSG is still active, but Enterprise Singapore has stated it will fold into a new EDGE framework launching in the second half of 2026, with no more specific date published yet. Confirm current status before relying on it for a purchase decision.

## Which one you actually are

Strip away the vendor pitch and the decision runs on three things: headcount, complexity, and whether the person who understands your payroll is a person or a process.

A handful of employees, fixed salaries, no work passes, is genuinely in-house territory. A spreadsheet built with the Ordinary Wage/Additional Wage split understood, kept by someone careful, checked before each bonus month, is a reasonable choice, not a stopgap you are embarrassed about. It stops being reasonable the moment any of those conditions change.

Enough people that the arithmetic is repetitive, but the team is still small, is where software earns its fee. You are not buying compliance, you are buying the removal of manual computation, which frees the same person up to check exceptions instead of building formulas.

No one on the team owns payroll as a real job is exactly the gap a bureau or managed service exists for, someone whose actual role is payroll, rather than payroll being the thing a finance generalist does on top of everything else.

Complexity that has outgrown what one person can safely track, multiple entities, a mix of work-pass types with different SDL and CPF treatment, shift pay, or genuine HR administration alongside payroll, is where full outsourcing tends to earn its cost rather than just add a layer.

There is a genuine cost dynamic worth naming honestly, not as a sales point: a minimum monthly fee dominates the cost of an outsourced or bureau service at very small headcount, exactly the size band where in-house is otherwise the cheapest option. That minimum fee is also why a [payroll setup built for a startup](/services/payroll/for-startups) looks different from one built for a fifty-person company; the fixed cost has to make sense against very few payslips.

None of this is a ladder you are supposed to climb. Plenty of employers stay in-house permanently, because their payroll stays simple permanently. The four-way comparison above is meant to be read against your own headcount and complexity this year, not against where you expect to be in three.

None of the four models discharges the statute; they only change who is doing the arithmetic and how fast a mistake gets noticed. A spreadsheet run by someone careful, for a dozen straightforward salaries, is not a compliance risk waiting to happen. It stops being a reasonable choice at a fairly specific point: a work-pass holder, shift pay, more than one entity, or losing the one person who understands the file. We run [payroll processing](/services/payroll) for employers past that point. For everyone else, the comparison above is the whole decision.

## Frequently asked questions

### Who is legally responsible for CPF and IRAS filings if I use a payroll provider?

The employer, under every model. The Income Tax Act's return duty falls on "every employer" (section 68), and the CPF Act's definition of employer is written to also catch anyone responsible for paying wages on the employer's behalf, which widens accountability rather than transferring it away. A provider changes who does the computing, not who answers for the result.

### Is CPF EZPay enough on its own for a small company?

For CPF submission specifically, yes: CPF Board built it to suit employers of any size. It does not compute Skills Development Levy for foreign staff automatically, does not cap contributions above the Additional Wage ceiling, and does not touch IR8A, IR21 or itemised payslips, so "enough for CPF" is not the same as "enough for payroll".

### What is the difference between payroll software and payroll outsourcing?

With software, your team still operates the system: entering data, approving runs, keeping records current. With outsourcing, a provider does that operating on data you supply. Neither changes who the CPF Act and Income Tax Act hold responsible for the filing itself.

### What size company should consider outsourcing payroll in Singapore?

There is no fixed headcount threshold, but the pattern is consistent: outsourcing earns its cost once no one on the team genuinely owns payroll as a job, or once complexity, multiple entities, mixed work-pass types, shift pay, has outgrown what one person can safely track by hand.

### What is One-Stop Payroll and do I need to sign up for it?

A joint IRAS, CPF Board, MOM and GovTech initiative letting OSP-ready payroll software submit AIS, CPF and MOM dataset information from one platform. You do not sign up directly; it works through your payroll software if that software is OSP-ready, and it does not cover IR21, SDL or bank disbursement.

### Is there government grant support for payroll software in Singapore?

The Productivity Solutions Grant currently funds up to 50% of eligible costs, capped at S$30,000, for an eligible local SME buying a pre-approved solution. Enterprise Singapore has stated PSG will fold into a new EDGE framework in the second half of 2026, so confirm its status before relying on it.

## Sources

- [Income Tax Act 1947, section 68 (returns by employer)](https://sso.agc.gov.sg/Act/ITA1947?ProvIds=pr68-) (Current version as at 05 August 2026)
- [Income Tax Act 1947, section 94 (general penalties)](https://sso.agc.gov.sg/Act/ITA1947?ProvIds=pr94-) (Current version as at 05 August 2026)
- [Income Tax Act 1947, section 95 (penalty for incorrect return)](https://sso.agc.gov.sg/Act/ITA1947?ProvIds=pr95-) (Current version as at 05 August 2026)
- [Central Provident Fund Act 1953, section 2 (definition of employer)](https://sso.agc.gov.sg/Act/CPFA1953?ProvIds=pr2-) (Current version as at 05 August 2026)
- [CPF Board: Declaring accurate wage information](https://www.cpf.gov.sg/employer/employer-obligations/declaring-accurate-wage-information) (Accessed 05 August 2026)
- [One Stop Payroll: About OSP](https://www.onestoppayroll.gov.sg/about/about-osp/) (Accessed 05 August 2026)
- [One Stop Payroll: FAQ (launch timeline)](https://www.onestoppayroll.gov.sg/faq/) (Page last updated 24 July 2026; accessed 05 August 2026)
- [IMDA: SMEs Go Digital programme](https://www.imda.gov.sg/how-we-can-help/smes-go-digital) (Page last updated 28 April 2026; accessed 05 August 2026)
- [Enterprise Singapore: Productivity Solutions Grant](https://www.enterprisesg.gov.sg/financial-support/productivity-solutions-grant) (Accessed 05 August 2026)

## Related

- [Singapore payroll compliance calendar](https://skillsforce.com.sg/insights/singapore-employer-payroll-compliance-calendar)
- [Payroll spreadsheet risk](https://skillsforce.com.sg/insights/payroll-spreadsheet-risk-cpf-ir8a-singapore)
- [How to submit CPF contributions](https://skillsforce.com.sg/insights/how-to-submit-cpf-contributions-singapore)
- [Switching payroll providers](https://skillsforce.com.sg/services/payroll/switching-providers)
- [Payroll processing](https://skillsforce.com.sg/services/payroll)