As announced in Budget 2015 earlier this year, the CPF contribution by employers for employees aged 50 to 65 years will be increased by 0.5-1%. For employees aged 50 to 55, their share of CPF will also be increased by 1%. This change will help them to save more for their retirement needs.
Other changes include raising the Ordinary Wage Ceiling from $5,000 to $6,000 per month. With the change in the Ordinary Wage Ceiling, the Additional Wage Ceiling will also be increased from $85,000 to $102,000. The Additional Wage Ceiling is the amount of additional wages that will attract CPF contributions in a year.
Calculation of CPF for Additional Wage Ceiling will be:
($102,000) – (Total Ordinary Wage subject to CPF for the year)
The CPF Annual Limit from 2016 will also be increased to $37,740 ($6,000 x 37% x 17 months).
You can read up more about the new CPF contribution rates: https://mycpf.cpf.gov.sg/Assets/members/Documents/Jan2016_Con_Rate_Page.pdf
If number crunching is not your cup of tea, leave the mind boggling task of CPF contribution calculation to MYOB Payroll software. All you need to do would be to input your employees’ details and their wages and the software would do the rest for you!
Alternatively, you can also outsource your company’s Payroll to us and we will make sure that calculations and submission of CPF is timely and in accordance to any changes that may be made by CPF Board or MOM from time to time.