Employers to Face Higher Medisave and Older Worker CPF Contribution Rates
Employers will face higher Medisave and older worker CPF contribution rates with effect from 1 January 2015, as announced in the FY2014 Budget Statement.
Employers' CPF contribution rates to the Medisave Account will be raised by 1 percentage point. In addition, the CPF contribution rates for workers aged above 50 years to 65 years will also be increased. The overall impact of these increases for an employee's monthly wage of $750 and above is shown in Table 1 below:
Table 1
|
Age (years)
|
Current
|
Effective 1 Jan 2015
|
|
Employer's CPF
|
Employee's CPF
|
Total CPF
|
Employer's CPF
|
Employee's CPF
|
Total CPF
|
|
50 and
below |
16% |
20% |
36% |
17% |
20% |
37% |
|
Above
50 - 55 |
14% |
18.5% |
32.5% |
16% |
19% |
35% |
|
Above
55 - 60 |
10.5% |
13% |
23.5% |
12% |
13% |
25% |
|
Above
60 - 65 |
7% |
7.5% |
14.5% |
8.5% |
7.5% |
16% |
|
Above 65
|
6.5% |
5% |
11.5% |
7.5% |
5% |
12.5% |
With these changes taking effect in less than a year, employers need to prepare themselves in order to avoid CPF non-compliance and the resulting penalties once the new regulations kick in.
Backed by more than 25 years of payroll outsourcing experience, we keep a keen eye on the latest statutory updates, giving our clients peace of mind over their CPF compliance.
To find out how we can support you in CPF compliance, please feel free to contact us.
To read the full CPF Board announcement on the changes above, click here.
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