Introduction
As part of the Budget 2023 announcement this year, the Central Provident Fund (CPF) monthly wage ceiling will be raised in stages, starting from the first increase from $6,000 to $6,300 in 1 September 2023, before the next adjustment taking place on 1 January 2024.
What Does This Mean
To help you understand these changes better, let’s consider an example: A 30-year-old Singaporean drawing a monthly salary of $7,000. Here’s how the CPF adjustments affect them:
How Does This Affect Employees and Employers
Employees will see a slight increase in their contributions, resulting in a reduction in take-home pay. There will also be an increase in contribution from Employers.
It is important to note that this will not affect employees drawing a monthly salary of $6,000 and below. Also, there are no changes to the CPF annual salary ceiling of $102,000.
What You Need to Do
Employers play a crucial role in ensuring accurate payroll processing. Ensure that the payslips for affected employees clearly reflect the new employee and employer contributions, as well as the revised net pay.
How D Next Stop Can Help
We specialize in providing comprehensive payroll services to businesses and we understand the intricacies of CPF contributions and how they can affect your employees' paychecks. Our team is here to assist you in navigating these changes, ensuring that your employees' payroll is accurate and compliant.
We want to ensure that you are well-informed and prepared for these changes. If you require assistance with your payroll, please do not hesitate to reach out to us!