How to Nail Your Year-End Payroll Adjustments (Without Losing Sleep)

Reading Time: 4 minutes

Ah, year-end—the season of office parties, Christmas lights, and… payroll adjustments. If the thought of tackling payroll makes you cringe, you’re not alone. But the truth is, year-end payroll doesn’t have to be a nightmare. With the right plan, you can breeze through it and still have time to enjoy the festive season. Let’s break it down step by step to help you close the year smoothly.

Why Year-End Payroll Adjustments Are So Important

Let’s be real – nobody wakes up excited about payroll adjustments. But whether you’re a small business owner or an HR professional, getting it right is crucial for three main reasons:

1. Regulatory Compliance Matters
   The Inland Revenue Authority of Singapore (IRAS) is serious about accurate reporting. If your payroll data isn’t spot-on, you risk fines or, worse, an audit. And trust us, no one wants to deal with that.
2. Your Team Deserves Accuracy
   Your employees rely on you to get their pay, bonuses, and tax forms right. Messing up could harm trust or morale—and let’s be honest, that’s the last thing you would want heading into the new year.
3. Future You Will Thank YouA clean payroll at year-end means fewer headaches in January. When everything’s in order, you can focus on starting the new year fresh, rather than scrambling to fix 2025’s mistakes.

Your Year-End Payroll Checklist

 Not sure where to start? Here’s a handy checklist to make sure you don’t miss a thing:

1. Bonuses and Incentives

Bonuses are the highlight of the year for most employees, so it’s crucial to get them right.

Annual Wage Supplement (AWS)
Commonly known as the 13th-month bonus, AWS is a huge part of the Singapore workplace culture. Make sure it’s correctly calculated and recorded in your payroll system. Remember, AWS is taxable, so it needs to be reported to IRAS.

Performance Bonuses
Did your team hit their targets this year? If you’re rewarding them with performance bonuses, double-check that the amounts are accurate and properly taxed. Employees are counting on you to get this right!

2. CPF Contributions

CPF (Central Provident Fund) contributions can get tricky at year-end, especially if there were salary adjustments or promotions during the year.

Ordinary Wages (OW) vs. Additional Wages (AW)
CPF contributions are split into OW and AW categories. OW covers regular salaries, while AW includes things like bonuses. It’s crucial to ensure both are calculated accurately, especially with CPF contribution caps in place.

Adjustments for Mid-Year Changes
Promotions, pay raises, or even new hires can impact CPF contributions. Do a quick review to ensure all adjustments are reflected in the year-end payroll.

3. Employee Benefits and Allowances

Employee perks are great for morale, but they come with compliance responsibilities.

Benefits-in-Kind
Housing allowances, company cars, or other non-cash perks need to be reported to IRAS. These benefits are considered taxable income, so ensure they’re included in the employee’s earnings.

Allowances
Meal and transport allowances are common but need to be categorized properly. Misreporting allowances can lead to compliance issues, so double-check the details.

4. Leave and Overtime Adjustments

Leave and overtime are easy to overlook but essential to get right.

Unpaid Leave
If any employee took unpaid leave during the year, adjust their salaries accordingly. Leaving this out can throw off your year-end numbers.

Overtime Pay
Make sure all overtime hours are recorded and compensated correctly. This is especially important for employees who are paid hourly or work shifts.

Key Tax Filing Deadlines with IRAS 

IRAS tax filing can feel overwhelming, but knowing the key deadlines can make it manageable:

Form IR8A
This form is a summary of your employees’ earnings for the year. It’s due by March 1, so you’ll want to get started on it early. If you’re enrolled in the Auto-Inclusion Scheme (AIS), you can submit it electronically through platforms like Talenox. (Trust us, this is a lifesaver.)

Appendix 8A and 8B

• Appendix 8A covers benefits-in-kind, such as housing or transport.
• Appendix 8B reports on stock options or other employee share ownership plans granted to employees.

If either of these applies to your company, make sure they’re completed and submitted alongside the IR8A.

Form IR8S
This form is required if your company made voluntary CPF contributions beyond the statutory amount. It’s not as common but worth checking if it applies to your business.

Common Mistakes to Avoid

Let’s face it—mistakes happen. But when it comes to payroll, even small errors can have big consequences. Here are a few pitfalls to watch out for:

1. Missing Deadlines
   IRAS deadlines come up fast, especially with all the other year-end tasks on your plate. Start early and set reminders to avoid late penalties.
2. Misclassifying Benefits
   For example, reimbursed transport expenses might seem minor, but misclassifying them can land you in hot water with IRAS.
3. Overlooking Mid-Year Adjustments
   Salary changes, promotions, or even employees leaving mid-year can impact your payroll. A quick audit of your records now can save you a lot of trouble later.

How Talenox Can Simplify Year-End Payroll

Here’s where Talenox steps in to make your life easier:

• Automated CPF Calculations
  Say goodbye to manual math. Talenox automatically calculates CPF contributions, including OW and AW, so you never have to worry about errors.
• IRAS Integration
  With Talenox, you can generate and submit your IR8A forms directly to IRAS through the AIS system. It’s fast, easy, and reduces the risk of mistakes.
• Employee Self-Service
  Employees can access their own payslips and tax forms directly on the platform. That means fewer questions for you and more time to focus on other tasks.

And yes, Talenox is both IRAS-approved and ISO27001-certified, so you can trust it’s up to the task.

Tips for a Stress-Free Year-End

Want to make the year-end even smoother? Here are a few bonus tips:

• Start Early
  Don’t wait until the last week of December to start reviewing your payroll. The earlier you begin, the more time you’ll have to spot and fix any issues.
• Use Payroll Software
  If you’re still relying on spreadsheets, now’s the time to upgrade. Tools like Talenox automate a lot of the heavy lifting, saving you hours of work.
• Keep Records Organized
  Make sure you have all employee records, CPF statements, and tax forms in one place. Staying organised can save you from a last-minute scramble.

Wrapping It Up

Year-end payroll adjustments might not be the most glamorous task, but they’re essential for a smooth start to 2026. With a clear plan, a solid checklist, and the right tools, you can get everything done without breaking a sweat.

So go ahead—set aside some time this week, roll up your sleeves, and tackle that payroll. Your future self (and your employees) will thank you.

Need help simplifying your payroll process?

Check out Talenox and see how we can make year-end a breeze.