Changes in Singapore’s CPF Contribution and Allocation Rates from 1 January 2016
1) CPF contribution rates for employees aged between 50 to 65 years will be increased between 0.5% and 1.0% as shown below. This applies to employees whose wages are ≥$750:
Employee’s age (years) | Increase in % contribution rate by employer | Increase in % contribution rate by employee |
51 to 55 | +1 | +1 |
56 to 60 | +1 | No change |
61 to 65 | +0.5 | No change |
*For employees earning $501 to $750, the revision to the employee contribution rates will be phased in at a later stage.
2) The Ordinary Wage (OW) ceiling for Private Sector employees will be increased from $5,000 to $6,000 for wages earned from 1 January 2016 onwards.
Consequently, the Additional Wage Ceiling will also be increased to a Total CPF Ceiling of $102,000, equivalent to 17 months of the Ordinary Wage Ceiling of $6,000.
The CPF Annual Limit (the maximum amount of mandatory and voluntary contributions to all three CPF Accounts that a CPF member can receive in a calendar year) will be revised from $31,450 to $37,740 for employees below 50 years old.
Assistance to Employers hiring older workers
To support employers with rising payroll costs, the increased employer CPF contribution rates for older workers i.e. those aged 50 to 65 years old, will be offset by an enhanced and extended Temporary Employment Credit (TEC) from 2016 till 2017:
- In 2016, employers will receive an offset of 1% of wages for Singaporeans and Permanent Resident workers up to the CPF salary ceiling of $6,000.
- In 2017, employers will receive an offset of 0.5% of wages for Singaporeans and Permanent Resident workers up to the CPF salary ceiling of $6,000.
TEC payments will be made based on employees’ income paid and declared with CPF Board in the respective year.
Mazars provides a full payroll outsourcing service. For more information regarding our Singapore payroll services, please send us an email.