With effect from 1 January 2015, the CPF contribution rates will increase. The following table is meant for employees who are Singapore Citizens, Singapore Permanent Residents in their 3rd year onwards and with wages above $750. The table does not apply for the Ordinary Wage in excess of $5000.CPF Contribution rate wef 1 January 2015. (Brackets represent the increase in percentage points compared to previous rates.)
|Employee's age||Employer's contribution||Employee's contribution|
|50 and below||17% (+1%)||20%|
|Above 50-55||16% (+2%)||19% (+0.5%)|
|Above 55-60||12% (+1.5%)||13%|
|Above 65||7.5% (+1%)||5%|
As it can be seen above, the employee enjoys a real wage increase because the Employer's contribution has increased from between 1% to 2% percentage points.
The bad news are for those who are Self-Employed. Self-Employed are required to increase their Medisave contribution by 1 percentage points for those with net trade income above $18,000. This results in reduction in take home pay with no real increase in income. As Medisave is relatively much less liquid compared to take home cash, it means the Self-Employed is worst off.
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