Changes to CPF and Employment Pass
The Singapore Government recently announced several key employment related changes aimed at helping Singaporeans save more for retirement and raising productivity. As an employer in Singapore, these changes will affect you:
1. CPF Matters
Increase in Employer CPF Contribution by 0.5% Point
Employer CPF contribution rate will be increased by a further 0.5% point. The 0.5% point increase will take effect from 1 September 2011. (Please see Annex A for details of the new CPF contribution rates by age group and Annex B for CPF contributions rates for low wage workers earning between S$50 to S$1,500 per month and above age 35.)
Downloads
Click here to download Annex A, Annex B
Increase in CPF Salary Ceiling to $5,000
To keep pace with income growth in recent years, the CPF salary ceiling will be adjusted upwards from $4,500 to $5,000. The change applies to all age groups and will take effect from 1 September 2011.
If your payroll is managed by the Virtual HR team, the changes will be executed for you on the effective dates. You may want to update your salary budgets.
2. Employment Pass Matters
Change in Qualifying Salary Thresholds for Employment Pass Applications
From 1 Jul 2011, to qualify for S Pass, applicants' monthly salaries will have to be $2,000 or more, up from $1,800. Similarly, the qualifying salary thresholds for Q1, P2, and P1 Passes will be raised to $2,800, $4,000, and $8,000 respectively. Employers of existing EP and S Pass holders will be given a one-time renewal of up to 2 years to meet the salary thresholds. Further renewals thereafter will be subjected to the new salary criteria. Existing EP and S Pass holders who cannot meet the new salary threshold may also apply for lower pass types if they are eligible.
Increase in Salary Threshold for Part-Time Employment
A company needs to have the requisite number of full-time local workers under the Dependency Ratio framework to qualify for foreign workers. The Singapore Government wants to ensure that local workers are employed meaningfully rather than being employed on token salaries just to allow employers to access to foreign workers. As such, a threshold salary of $650 applies today; below which local workers are deemed to be working part-time, and employers will need two such part-time workers to be counted as one full-time worker. Given the increases in locals' wages, the threshold salary will be increased from $650 to $850. This will take effect from July 2011.