Cracks in the system: Financial strain and payroll burnout threaten Singapore’s workforce

Half of Singapore’s workforce is experiencing financial stress, even as payroll teams are stretched thin, according to Deel’s 2025 Singapore Payday Expectations Report. The findings revealed a dual challenge: employees dealing with stagnant wages and rising living costs, and payroll professionals overwhelmed by compliance and operational demands. These pressures increase the risk of payroll errors, employee disengagement, and even talent loss, highlighting the urgent need for organisations to modernise how pay is managed.

The report found that one in two employees in Singapore is either just getting by or struggling financially, a higher proportion than in Hong Kong (37%). Millennials are particularly hard hit: only 8% said their wages have kept pace with inflation. Alarmingly, 42% of employees said they could maintain their lifestyles for less than three months without income, and 13% said even a month’s disruption would be disastrous.

To cope, employees are cutting discretionary spending (55%), taking on part-time or freelance jobs (41%), or relying on financing tools such as credit cards (47%) and buy-now-pay-later schemes (33%). “A good number of employees told us they simply won’t be able to sustain their lifestyles if they’re out of work for more than a month,” Karen Ng, Regional Head of Expansion, Enterprise, North and South Asia at Deel, told HRM Asia. “That financial strain is also driving new demands for flexibility in how they are paid.”

Earned wage access (EWA)—which allows employees to draw a portion of their wages before payday—is emerging as a solution. While only a quarter of payroll teams currently invest in EWA, nearly three in four employees (74%) say they would use it if available. Gen Z employees and parents managing family expenses show the strongest demand.

Beyond frequency of pay, employees are calling for greater personalisation and transparency in their compensation. 57% would prefer a higher salary with fewer benefits, while 54% want the flexibility to mix salary, leave, and benefits. Almost seven in 10 employees are open to alternative compensation models such as stocks or equity (46%), employer-backed rewards or loyalty points (34%), or even cryptocurrency (28%).

But many employees still feel in the dark about how their pay is managed. Only 29% said they can confidently decode their pay slips, and more than a quarter (27%) do not know who to approach with payroll-related questions. “The survey highlighted that employees continue to struggle with understanding deductions and pay slip details,” Ng said. “This lack of clarity fuels frustration and shows why transparency and simplicity in payroll are becoming non-negotiable.”

Payroll teams under strain

The report also highlighted the challenges faced by payroll professionals themselves. More than three-quarters (77%) of organisations stated that recent Central Provident Fund (CPF) ceiling changes and other regulatory shifts have increased their teams’ workloads, with poor system integration between HR, payroll, and finance adding to the strain.

“80% of organisations we surveyed admitted their payroll teams are not functioning well,” Ng noted. “Burnout is common because these teams are understaffed and under-resourced. Payroll often doesn’t get the investment that recruitment or engagement functions do, even though it’s mission critical.”

The shortage of payroll expertise is also acute. Singapore currently has around 3,000 open payroll manager positions, yet few graduates aspire to such roles. “Most people don’t set out to become a payroll manager—it’s often something you fall into from HR or finance,” Ng said. “But it’s a rare talent pool, and organisations must start recognising payroll professionals as strategic assets rather than just administrators.”

While technology adoption is accelerating—47% of organisations already use AI in payroll and another 46% plan to—Ng cautioned that adoption alone is not enough. Only half of organisations have real-time integration between payroll, HR, and accounting systems, with many still relying on manual uploads that increase the risk of errors.

“In midsize organisations especially, the single most impactful change is integration,” Ng stressed. “Investing in the right technology that connects across systems will not only reduce errors but also retain payroll talent by easing their workload.”

Privacy, data protection, and training remain barriers to AI adoption. “Implementing new tools is not just about cost—it’s about convincing internal stakeholders that data will remain secure and giving payroll teams the skills to use them effectively,” Ng explained.

Ng believes payroll can evolve from a back-office task into a powerful lever of employee engagement and business resilience. With the right data and analytics, payroll can provide insights into employee preferences and support more tailored compensation strategies.

“When you have payroll data at your fingertips, you can personalise benefits in meaningful ways,” Ng said. “For example, a younger employee may be motivated by equity, while someone with a family might value regular cash increments. Payroll analytics can help leaders design packages that truly resonate with different workforce segments.”

As employees demand clarity and flexibility while payroll teams struggle with resource constraints, organisations cannot afford to ignore the warning signs. “Organisations should act now to modernise payroll and equip their teams with the right tools and support,” Ng concluded. “When payroll operates seamlessly, it does more than reduce errors—it creates the foundation for positive employee experiences and stronger workplace trust.”