As an employer in Singapore, it's crucial to understand your obligations when it comes to national service compensation for your employees. This guide will provide you with a comprehensive overview of NSMEN make-up pay, ensuring you remain compliant with the relevant laws and regulations.
What is NSMEN Make-Up Pay?
National Service (NS) in Singapore is compulsory for male Singapore citizens and second-generation permanent residents. After full-time service, an NSman becomes Operationally Ready (ORNS) and typically goes through a 10-year training cycle. During this time, he may be called up for up to 40 days of ORNS activities each work year (1 April to 31 March), such as In-Camp Training (ICT).
NSmen make-up pay, also known as national service make-up pay or NS pay, compensates an NSman for the civilian income he loses while attending these activities. The cost is funded by MINDEF, not by the employer. Since MINDEF's automated system took over the calculation, the employer's role is mainly to verify the amount, pay salary correctly, and register for the DIRECT scheme if it wants to be reimbursed instead of deducting pay.
Service Pay (SP)
Service Pay is the NS allowance MINDEF pays for the period of an NS activity. For ORNS activities, it is pro-rated based on the duration of the activity.
Make-Up Pay (MUP)
Make-Up Pay is the difference between the civilian income an NSman loses and his Service Pay, for the duration of his ORNS activity. MUP is generated automatically for ORNS activities except IPPT, NS FIT and mobilisation.
There is also a minimum. Under base NS Pay, an NSman whose civilian income is low is paid up to a minimum of S$1,600 a month, pro-rated by the duration of the ORNS activity. MINDEF pays a top-up equal to the difference between the base NS Pay and his civilian income loss. If his foregone civilian income is higher than the base amount, he is paid according to his civilian income.
Why is NSMEN Make-Up Pay Important?
Handling NSmen make-up pay correctly is about more than paperwork. It keeps your employees' pay accurate while they are away on national service, and shows that you value their commitment. A wrong or late amount lands on your NSman first, so a quick check of the automated figure each time is worth the few minutes.
Calculation of NSMEN Make-Up Pay
The basic formula of MUP is: Make-Up Pay = Civilian Income Loss – Service Pay. For employed NSmen, MINDEF works out the civilian income loss automatically from CPF data that employers submitted to the CPF Board: CPF Ordinary Wages, and the monthly average of CPF Additional Wages received in at least 8 of the last 12 months, after removing the two highest monthly values (likely to be bonuses or other irregular payments). The figures below are only a simple illustration of the formula.
For example, an employed NSman earns $6,000 a month on a 5-day work week and attends a High-Key ICT with 11 working days of NS activity in a month with 22 working days. The Service Pay for the activity is $500 (illustrative figure).
- Civilian Income Loss: $6,000 × (11 working days for NS activity ÷ 22 total working days) = $3,000
- Service Pay (SP) for the activity: $500
- Make-Up Pay (MUP): $3,000 – $500 = $2,500
If the NSman's civilian income is below the base NS Pay (a minimum of $1,600 a month, pro-rated by the duration of the activity, in place since September 2022), MINDEF pays a top-up so that he receives at least the pro-rated base NS Pay. Because the automated figure is based on past CPF data, it may not match the pay of someone with an irregular pay arrangement. You can request an adjustment with supporting documents (see below). MINDEF publishes worked examples for different situations on the OneNS Portal.
NS Make-up Pay Claims
MINDEF now generates Make-Up Pay automatically, so employers no longer file a claim form 14 days ahead. Instead, you verify the amount on the OneNS Portal:
- One month before your employee's ORNS activity, the automatically generated amount appears on the Employee Payment Management eService on the OneNS Portal, and you are informed by email.
- If the amount is correct, you do nothing. If you do not amend or verify it two weeks before the activity starts, it is processed automatically for payment.
- If the amount is inaccurate, amend it on the eService with supporting documents. Adjustments submitted at least two weeks before the activity are paid within 10 working days of the start. Later adjustments are paid after processing, and all adjustments must be submitted within three months of the start of the ORNS activity.
- Payment is made within 10 working days of the start of the activity. If it has not arrived after that, contact the NS Contact Centre.
- If MUP was not generated, for example for a new hire with no CPF data, submit a claim manually on the eService and attach supporting documents such as the payslip for the month of the activity.
There are 2 ways MUP is paid, depending on whether your company is registered with the DIRECT scheme (Direct Reimbursement to Employers of Claims for NS Training). You can register and update your company's bank details on the Employee Payment Management eService, and the change takes effect on the next working day.
Registered with DIRECT scheme
Under the DIRECT scheme, employers continue to pay the employee as normal, and MINDEF reimburses the employer. No salary adjustment is needed.
- Keep paying your NSman what you would normally pay him on your regular pay schedule: full basic salary, fixed allowances, and the additional or variable payments (such as overtime or commissions) usually paid to him each month.
- MINDEF reimburses your company the automatically generated MUP amount.
- If the reimbursed amount is lower than what you paid, do not take the difference back from the NSman. The amount is an estimate based on past CPF data. Amend the claim with supporting documents instead.
- If your NSman is eligible for base NS Pay, MINDEF credits the top-up amount directly to him.
Not registered with the DIRECT scheme
If your company is not on the DIRECT scheme, salary adjustment is required, and MINDEF pays the NSman directly.
- Deduct the employee's salary based on the amount of time he was away from work due to the ORNS activity.
- MINDEF pays the automatically generated MUP amount directly to the NSman.
- For ORNS activities held overseas, Service Pay is typically paid directly to the NSman even if your company is on DIRECT. Recover the Service Pay component from him. To avoid this, DIRECT employers should submit the auto-generated claims at least 1 to 2 weeks before an overseas training starts.
If an NSman has left your company, delete the ineligible claim on the OneNS Portal at least two weeks before the activity starts. If it has already been paid, submit a cancellation request through the eService as soon as possible.
Swingvy payroll software supports the management and deductions of NS Pay. Find out more about the payroll platform and speak to our team for more information.
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