Having trouble to understand CPF in Singapore and how does it work? Here’s a quick overview of CPF in Singapore.
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- What is CPF (Central Provident Fund) and who needs to pay it?
- CPF (Central Provident Fund) was established to play one of the crucial functions in Singapore’s social security system.
✔It’s a compulsory, employment-based savings scheme for all Singapore Citizens and Permanent Residents(PRs) and both employees and employers are required to make regular contributions to the Fund. The savings will then be invested for the major financial needs including retirement, healthcare, and home ownership.
✔CPF rates
✔The CPF contribution rates vary depending on age ranges. Here’s how much (by percentage of your employees’ wages) each person contributes: (for monthly wages > $750)
✔For PRs, Lower CPF contribution rates will be applied to employer and employee in the first two years after the employee obtains his or her PR status. The employee needs to pay full contributions starting from the 3rd year of his or her PR status.
- CPF (Central Provident Fund) was established to play one of the crucial functions in Singapore’s social security system.
- When are CPF contributions due?
✔The due date for CPF contributions is on the last day of the calendar month. Enforcement action would be taken against employers who fail to pay by the 14th of the following month. Please note that you will be charged an interest of 1.5% per month starting from the first day after the due date if you do not pay your CPF contribution on time.
- What is CPF (Central Provident Fund) and who needs to pay it?
>>> Highlight of Singapore Budget 2023 for CPF <<<
The CPF monthly salary ceiling will be raised in stages from S$6,000 to S$8,000 by 2026.
✔From September 2023, the CPF monthly salary ceiling will be elevated by S$300 to S$6,300.
✔S$6,800 from January 2024
✔S$7,400 from January 2025
✔S$8,000 from January 2026
✔The employer’s CPF contribution for employees earning less than S$750 remains the same.
✔For employees who earn under $50 a month, there is no employer’s CPF contributions or employee’s CPF contribution necessary.
If you wish to know more about CPF Contribution, just get in touch with professional experts from iGS Consulting. We are always here for you.
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