Payment reconciliation (Statutory withholding) is a preventive measure in Talenox to ensure that Statutory Contributions are always set aside from each payment created.

Below is the list of the statutory contributions in Singapore we are referring to:

Payment Reconciliation helps employers avoid a situation where salary is paid out fully in parts with insufficient balance to contribute the month end employee's portion of statutory contributions. Having to claw back paid out salary from the employee can be unduly troublesome.
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This is especially helpful for employers who make multiple payouts for employees in a month, more commonly pertaining to hourly-rated part-time staff.

Payment Reconciliation was designed for employees in the following scenarios/criteria:

If payments made to employees fulfil any of the scenarios above, the system will do the following:

This process was created to ensure that when such employees resign, there will be enough buffer for employee statutory contribution payouts.

If you strictly make payments only once a month, always remember to process the CPF total for the month and refer to the Payroll & CPF summaries for the final calculation of net salary payable, together with respective contributions.
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Any amount that is withheld in excess after the month total processing is done will be reflected under Make Payment > Reconciliation Amounts (B).

If you are processing payroll on a monthly basis, you can ignore the reconciliation amount and when you export bank file, do ensure that the "Include Reconciliation" box is checked (default setting). 😄

1) Click on the drop-down arrow to view the payments you have processed.

Head over to “Select payment method >”
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2) Choose “Bank Transfer”

3) Ensure that the “Include Reconciliation” checkbox is ticked.

1) Click on the drop-down arrow to view the payments you have processed.

Head over to “Select payment method >”

2) Choose “Cheque”

3) Ensure that the “Include Reconciliation” checkbox is ticked.

The new payment flow also shows the Payment Reconciliation amounts separately under each payment method (Bank and Cheque payments) clearly.

If Statutory Withholding has occured for an employee and there is still Payment Reconciliation amounts yet to be paid out to them, our system will include this message into employee payslips during generation:

"A portion of net salary was withheld to provide a buffer in case additional CPF contribution is required. You may see this line if you have multiple payments in the same payroll month."

Employee A is a Singapore Citizen (40 years old) and contributes to CDAC SHG group. He is paid once in a payroll month.

He has met the criteria above and Payment Reconciliation will automatically apply to him when processing payroll in Talenox.

The system will withhold the maximum statutory amounts for this employee contribution based on his Gross Salary amounts:

Total of $100.50 will be withheld from Employee A's salary.

Payment Reconciliation is the amount that we return to employees after accounting for the actual statutory amounts that employees need to pay out.

When Employee A checks "includes withheld" in the bank file downloaded, Payment Reconciliation will automatically apply. These are how the calculations are done:

Total Net Salary paid out to employee after including reconciliation amounts:

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Employee B is a Singapore Citizen (40 years old) and contributes to CDAC SHG group. He is paid twice in a payroll month - 1st payment (15th) & 2nd payment (30th).

He has met the criteria above and Payment Reconciliation will automatically apply to him when processing payroll in Talenox.

The system will withhold the maximum statutory amounts for this employee contribution based on his 1st payment in the system:

Total of $100.50 will be withheld from Employee A's salary in his first payout (15th).

At this point, "include withheld" should be unchecked in the 'Make Payment' page in Talenox.

The Total Net Salary of $399.50 will then be paid out to employee in his first payment (15th).

Total of $203 will be withheld from Employee B's salary in his second payout (30th).

At this point, "Include Withheld" should be checked because this is Employee B's final payout for the month.

The actual statutory contributions for the month will be calculated which will trigger Payment Reconciliation, if any, to be paid back to the employee:

Actual Statutory Contributions

Reconciliation

Total Net Salary payable to Employee B in his 2nd payment (30th) is:

Total Net Salary paid out to employee in the full month (15th + 30th) is:

*CPF Rates found here.

**CDAC Rates found here.

Hope this helps with your Payment Reconciliation understanding in Talenox now!