| What is CPF (and other contributions) |
What is Central Provident Fund (CPF)?CPF is a comprehensive social security savings scheme to which both employers and employees have to contribute. CPF takes care of members' needs in retirement, healthcare, home ownership, family protection and asset enhancement. CPF is a mandatory social security savings scheme funded by contributions from employers and employees. The savings set aside in your Retirement Account when you reach age 55 provide for monthly payouts from age 65, through CPF LIFE or the Retirement Sum Scheme, for your expenses in retirement. Both employees and employers make monthly CPF contributions. These contributions go into three accounts:
CPF funds can also be invested in products such as insurance, unit trusts, exchange traded funds (ETFs), fixed deposits, bonds and treasury bills, shares, property funds and gold. Only if there is $20,000 and above in the OA and $40,000 and above in the SA. Read More: https://www.cpf.gov.sg/Members/AboutUs/about-us-info/cpf-overview https://www.mom.gov.sg/employment-practices/central-provident-fund https://www.mom.gov.sg/employment-practices/central-provident-fund/how-you-can-use-your-cpf Who Contributes CPFSingaporean or Singapore permanent resident, CPF contributions from employer and yourself. CPF contributions are payable when there is an employer-employee relationship, i.e. a contract of service. CPF contributions are payable for employees who are Singapore Citizens or Singapore Permanent Residents (SPR) from their 3rd year of obtaining SPR status, including part-time/casual employees. However, CPF contributions are not mandatory for Singapore citizens or SPR working overseas. CPF contributions will be deemed as voluntary for employers who wish to continue making CPF contributions for employees posted overseas. CPF contributions are not allowed for foreigners. But CPF contributions are payable once a foreign employee obtains SPR status. To help the SPR employee adjust to the lower take-home pay, both the employer and employee will contribute to CPF at graduated rates for the first two years. From the third year onwards, both employer and SPR employee will contribute to CPF at full employer-full employee rates (i.e. rates applicable for a Singapore Citizen employee.) Read More: https://www.mom.gov.sg/employment-practices/central-provident-fund/cpf-contributions https://www.cpf.gov.sg/Assets/Employers/Documents/WhoDoYouNeedToPayCPFFor.pdf https://www.mom.gov.sg/employment-practices/central-provident-fund/employers-contributions Penalties for not paying CPFIf you don’t comply with the CPF Act, you may be liable to: Late payment interest charged at 18% per annum (1.5% per month), starting from the first day of the following month after the contributions are due. The minimum interest payable is $5 per month. A fine of up to $5,000 and no less than $1,000 per offence and/or up to 6 months jail. A fine of up to $10,000 and no less than $2,000 per offence and/or 12 months jail for repeat offenders. Fine of up to $10,000, imprisonment of up to 7 years or both if you deduct your employee’s share of CPF contributions but fail to pay the contributions to CPF Board. Read More: https://sso.agc.gov.sg/Act/CPFA1953 https://www.cpf.gov.sg/Employers/EmployerGuides CPF Contributions Rates
· 17% by employer · 20% by employee
§ Total percentage of wage (26%) · 13% by employer · 13% by employee o 62.17% to OA, 16.21% to SA, 21.62% to MA o 60 – 65 years old § Total percentage of wage (16.5%) · 9% by employer · 7.5% by employee o 62.17% to OA, 16.21% to SA, 21.62% to MA o Above 65 years old § Total percentage of wage (12.5%) · 7.5% by employer · 5% by employee o 62.17% to OA, 16.21% to SA, 21.62% to MA Other ContributionsIn addition to CPF, there are other contributions like the compulsory Skills Development Levy (SDL), Self-Help Groups (SHGs) and, Social Help and Assistance Raised by Employee (SHARE) Donations Skills Development LevyAs required by law under the Skills Development Levy (SDL) Act, employers are required to pay a monthly SDL for all employees rendering services in Singapore. The SDL payable is at 0.25% of the monthly remuneration for each employee, with the minimum payable of $2 and a maximum of $11.25. Currently, CPF Board collects SDL on behalf of the SkillsFuture Singapore Agency (SSG). All SDL collected are channelled to the Skills Development Fund (SDF) which is used to support workforce upgrading programmes and to provide training grants to employers when they send their employees to attend training under our national Continuing Education and Training system. The SDL and SDF are administrated by the SkillsFuture Singapore Agency (SSG). Read More: Self-Help GroupsThe Self-Help Groups (SHGs) are set up to uplift the less privileged and low-income households in the Chinese, Eurasian, Muslim and Indian communities respectively. The SHGs Funds are as follow: · Chinese Development Assistance Council (CDAC) Fund o All working Chinese in Singapore who are Singapore Citizens and Permanent Residents, belonging to the Chinese community. · Eurasian Community Fund (ECF) o All working Eurasian, a person defined as "Eurasian" in their identity card, or a person of both European and Asian ancestry, in Singapore who are Singapore Citizens and Permanent Residents, belonging to the Eurasian community. · Mosque Building and Mendaki Fund (MBMF) o All working Muslims in Singapore who are Singapore Citizens, Permanent Residents and foreign employees either on an Employment Pass or a Work Permit. · Singapore Indian Development Association (SINDA) Fund o All working Indians in Singapore who are Singapore Citizens, Permanent Residents and Employment Pass holders and are of Indian descent (including Bangladeshis, Bengalis, Parsees, Sikhs, Sinhalese, Telegus, Pakistanis, Sri Lankans, Goanese, Malayalees, Punjabis, Tamils, Gujaratis, Sindhis and all people originating from the Indian sub-continent). Although not compulsory, employers are expected to deduct the SHG contributions from their employees’ wages. Employees who do not wish to contribute can submit an opt-out form to the respective SHGs. Read More: Social Help and Assistance Raised by EmployeeSHARE is a monthly giving programme of Community Chest, the fund-raising and engagement arm of the National Council of Social Service. On behalf of Community Chest, the CPF Board collects employee’s donations to SHARE from employee’s wages made through the company payroll. Donations by employees are voluntary and deducted from their wages. 100% of the donations are channelled directly to support critical social service programmes and goes towards: · Building strong relationships of families in difficulty to stay resilient · Caring for vulnerable seniors and to age gracefully in the community · Empowering children with special needs and youth-at-risk to reach their potential · Integrating adults with disabilities into society · Supporting persons with mental health issues to integrate into society Although not compulsory, employers are expected to deduct the SHARE contributions from their employees’ wages. Employees who do not wish to contribute or change their contribution should contact National Council of Social Service Community Chest. Read More: https://www.comchest.sg/Share-as-One/Home.aspx
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