Phase 3 of the increase to CPF contribution rates for senior workers will take effect from 1 January 2024. In this blog post, we’ll walk you through the expected changes.

The Changes

The upcoming increase will only affect employees between the ages of 55 and 70,  in line with Singapore’s long-term objective of improving retirement adequacy. As with the previous increases, CPF contribution rates for other age groups will remain unchanged. The phase 3 increase will only be applicable to Singaporean Citizens and Permanent Residents (PR) who have held permanent residency for 3 years or more. Additionally, 1st and 2nd-year PRs will not be affected unless they choose to contribute using the higher rates. 

A more detailed breakdown of the rates applicable from 1 January 2024 can be viewed on the official CPF Contribution rate table.

Effect on the “CPF at Higher Rates” System Item

SimplePay allows you to set whether an employer and/or employee have elected to contribute to the full CPF amount due, even during the first two years of being a PR, by making use of the “CPF at Higher Rates” system item. 

The 2024 updates will have the following effects on the system item:

1. 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
2. Where both parties have elected to make the full rate contribution, both parties’ contributions would be affected by the increase.

SimplePay has proactively implemented the necessary changes to ensure that payslips generated from 1 January 2024 will automatically account for the CPF contribution rate increase. Rest assured, we’ve got you covered!

Any further queries regarding the CPF changes discussed above can be directed to the CPF Board via the listed channels on their website.

Should you have any questions regarding SimplePay or our payroll software, please feel free to contact us via support@simplepay.cloud. You can also take advantage of our free 30-day trial account here to explore the benefits of using SimplePay, if you aren’t a user already.

Keep well and stay safe.

Team SimplePay