The yearly CPF contribution rates increase will take effect from 1 January 2023. In this blog post, we’ll take you through the changes to expect.
For this increase only employees aged between 55 to 70 will be affected, to strengthen their retirement adequacy. There will be no change to the CPF contribution rates for other age groups. Additionally, the increase is only applicable to Singaporean Citizens and Permanent Residents (PR) who have had permanent residency for 3 years or more. 1st and 2nd-year PRs will not be affected unless they contribute higher rates.
Affect on the “CPF at Higher Rates” System Item
On SimplePay, you can set whether an employer and/or employee have opted 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 2023 updates will have the following effects on the system item:
- 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 has proactively implemented the necessary changes to ensure that payslips generated from 1 January 2023 automatically include the CPF contribution rate increases. You don’t need to stress about doing anything from your side; SimplePay has you covered!
Any further queries on the above can be directed to the CPF Board through the contact page on their website here.
Should you have any questions regarding SimplePay or would like to find out more about our payroll software, please feel free to contact [email protected] for assistance. You can also sign up for a free 30-day trial account, if you aren’t using SimplePay yet.