Upcoming Changes to Central Provident Fund (CPF) Ordinary Wage Ceiling

Singapore is poised to implement significant changes to the Central Provident Fund (CPF) contribution framework, aimed at bolstering retirement savings for workers. These progressive updates are designed to align CPF contributions with current wage levels, allowing individuals to better prepare for retirement.

Key Changes to Central Provident Fund (CPF):

These adjustments will be phased in over several years, beginning with an increase in the CPF Ordinary Wage ceiling from SGD 6,400 in September 2023 to SGD 6,800 in January 2024. The ceiling will then rise to SGD 7,400 in January 2025 and ultimately reach SGD 8,000 by January 2026.

𝐂𝐏𝐅 𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐖𝐚𝐠𝐞 𝐂𝐞𝐢𝐥𝐢𝐧𝐠 𝐰𝐞𝐟 𝟏 𝐉𝐚𝐧 𝟐𝟎𝟐𝟔 = $𝟏𝟎𝟐, 𝟎𝟎𝟎 − 𝟏𝟐 𝐌𝐨𝐧𝐭𝐡𝐬 𝐱 𝐎𝐫𝐝𝐢𝐧𝐚𝐫𝐲 𝐖𝐚𝐠𝐞 (𝐜𝐚𝐩𝐩𝐞𝐝 𝐚𝐭 $𝟖, 𝟎𝟎𝟎)

Implications for Employers and Employees:

• For employers:

  • Employers will need to update their payroll systems to accommodate the new wage ceilings and any adjustments to CPF contribution rates.

  • Companies must ensure compliance with these new regulations to avoid penalties while maintaining smooth payroll operations.

• For employees:

  • They should prepare for changes to their take-home pay as a higher proportion of their earnings will be allocated to CPF accounts.

  • While this may slightly reduce immediate disposable income, the increase in CPF contributions will significantly enhance long-term retirement savings.

Conclusion:

These changes to the CPF contribution framework reflect Singapore's commitment to ensuring retirement savings keep pace with wage growth and demographic shifts. Both employees and employers should prepare for these adjustments to fully benefit from the enhanced CPF contribution structure.

Note: This information is accurate as of the point of publishing.

For HR and Payroll services, contact us today.

Understanding the New Shared Parental Leave and Government-Paid Paternity Leave in Singapore

Starting April 1, 2025, Singapore will enhance its parental leave benefits, providing a total of 30 weeks of paid leave for working parents to bond with their newborns. This initiative aims to support family bonding and shared parental responsibility, with changes implemented in phases to balance the impact on employers.

Key Changes:

• Mandatory Government-Paid Paternity Leave (GPPL):

  • From April 1, 2025, the previously voluntary additional two weeks of GPPL will become mandatory, granting eligible working fathers a total of four weeks of paternity leave.

• New Shared Parental Leave (SPL):

  • The current SPL scheme will be replaced by a new scheme, offering 10 weeks of leave shared between both parents.

  • Implementation will occur in two phases:

    • From April 1, 2025: Eligible parents receive six weeks of SPL.

    • From April 1, 2026: The leave extends to 10 weeks.

How Parents Can Share the New SPL:

• Default Allocation:

  • Each parent is initially allocated half of the SPL to encourage shared responsibility.

• Flexibility in Sharing:

  • Parents can reallocate their share of the SPL to better suit their caregiving needs.

  • Changes to SPL allocation should be submitted via the LifeSG website or app within four weeks of the child's birth. Any changes after this period require the employer’s consent.

Guidance for Employees

• Early Notification:

  • Parents should inform their employers early about their pregnancy and discuss leave plans, including the use of SPL within the first 12 months after birth.

• Notice Requirements:

  • A minimum notice of four weeks is required before taking GPML, GPPL, and SPL.

• Discussion Points for Leave Plans:

  • Decide on the number of weeks of SPL to take.

  • Determine whether the leave will be in one continuous block or separate blocks.

  • Set start and end dates for the leave period(s).

Guidance for Employers

• Supportive Policies:

  • Employers are encouraged to facilitate and support employees’ leave plans.

• Verification and Claims:

  • Employers can verify employees’ SPL arrangements and submit leave reimbursement claims

    through the Government-Paid Leave Schemes portal at profamilyleave.msf.gov.sg.

Conclusion:

The expanded parental leave scheme in Singapore underscores the importance of family bonding and shared parental responsibilities. By understanding these changes and planning accordingly, both employees and employers can ensure a smooth transition and effective management of leave entitlements.

Note: This information is accurate as of the point of publishing.

For leave administration and claims submissions, contact us today.

Section 202 Relief – Exclusion of Directors’ Shareholding Interests in Financial Statement (Companies Act 1967)

With effect from 9 December 2024, the Registrar of Companies introduced a class exemption under Section 202(2) of the Companies Act 1967. This exemption allows private and non-listed public companies to exclude directors’ shareholding disclosures from their annual directors’ statements, provided that unanimous consent from shareholder(s) is obtained.  

This regulatory development offers a practical means to comply with the reporting obligations while maintaining statutory transparency through existing statutory registers. 

Our Corporate Secretarial team can assist with the implementation of this exemption, from preparing the necessary consent from shareholder(s) to drafting compliant directors’ statements, and supporting your process. 

We can help your company benefit from this relief compliance, contact us today.