After previously being delayed by one year due to COVID-19 and the related economic impact on employers and employees alike, the proposed increase in CPF contribution rates has been confirmed to take effect from 1 January 2022.
In summary, the CPF contribution rates for employees aged above 55 will be increased from 1 January 2022. The age bands applicable will also be modified from the same date to allow for a difference in rates for the 65 to 70 age category, as well as an additional 70+ category.
This increase will only be applicable to Singaporean Citizens and Permanent Residents (“PR”) who have had permanent residency for 3 years or more. First and second year PR’s will not be affected unless contributing at higher rates.
Affect on CPF at Higher Rates Built-in Item
When using SimplePay, you are able to set whether an employer and/or employee have elected to contribute the full CPF amounts due, even during the first two years of PR, by making use of the “CPF at Higher Rates” system item.
The 2022 updates would have the following effect on these contributions:
Where only one party has elected to pay full rates, then only the party contributing full rates would be affected (either employer or employee); and
Where both parties have elected to make the full rate contribution, both parties’ contributions would be affected by the increase.
Our development team have made sure that the system has already been updated so that the necessary changes will automatically be reflected on payslips on or after 1 January 2022, so no further action on your part will be necessary.
Any further queries on the above can be directed to the CPF Board through the listed channels on their website.
Should you have any questions regarding SimplePay or any of our services, please feel free to contact [email protected] for assistance.
Keep well and stay safe.