For more details about Singapore Budget 2011, please click here.
Increase in Employer CPF Contribution by 0.5 Percentage Point
To help Singaporeans save more for their retirement, the Government will increase the employer CPF contribution rate to the Special Account by 0.5 percentage point. This will restore the total CPF contribution rate to 36%. The 0.5 percentage point increase will take effect from 1 September 2011.
This restoration of the employer CPF contribution rate follows Prime Minister Lee Hsien Loongâ€™s announcement at the May Day Rally in 2010, on the 1 percentage point increase in employersâ€™ contribution, with 0.5 percentage point to the Medisave Account on 1 Sep 2010 and another 0.5 percentage point to the Special Account on 1 Mar 2011.
All employees will benefit from the new CPF contribution rate change. Employees aged above 35 who are earning between $50 and $1,500 per month will also see pro-rated increases in their CPF contribution rate.
Increase in CPF Salary Ceiling to $5,000
To keep pace with income growth in recent years, the CPF salary ceiling will be adjusted upwards from $4,500 to $5,000¹. The change applies to all age groups and will take effect from 1 September 2011.
All employees will benefit from the 0.5 percentage point increase in employer CPF contribution, while those earning more than $4,500 a month, estimated to be 390,000 members, will benefit from the increase in the CPF salary ceiling.
The last change in the CPF salary ceiling was in 2006, when it was lowered from $5,000 to $4,500.