Dear readers, thanks for dropping by. Kindly note that I have migrated all these posts to my new blog All Things Cozy and Homely . I will blog at the new site from Jan 15 onwards.

Tuesday, September 27, 2011

CPF Contribution & Allocation Rates changes (from 1 Sep 2011)

 Extracted from the CPF site:
 From 1 September 2011, the employers’ CPF contribution rate is increased by 0.5 percentage point. For employees who are above 35 years old and earning monthly wages of up to $1,500, the higher employer CPF contribution rate will continue to be phased in from 0% at the wage of $50 to the new full rate at the wage of $1,500. The increased contribution will be credited to the employees’ Special Account (including those above 55 years of age).

However, the additional 0.5 percentage point does not apply to graduated employer and employee rates for first or second year Singapore Permanent Residents (SPR) and their employers.

The new CPF contribution amount can be computed using the CPF Contribution Calculator or determined using the CPF contribution rate booklets.

** This is the table meant for:

       (1) Private Sector Employees
       (2) Non-Pensionable Employees (Statutory Bodies & Aided Schools)
       (3) Non-Pensionable Employees (Ministries)

       Note: For (1), (2) and (3), the Ordinary Wage Ceiling is $5,000.

I have actually done up an excel  sheet showing how  the CPF contribution of an ordinary Singapore couple, with a combined gross income of $4500,  will look like. I have made an assumption that there is a wage increase of $100 per year for this couple, and there is no income ceiling for them.

You can use this CPF template** to forecast how your housing loan matches up with the CPF contribution as you age. This is pretty useful for you to predict when cash is needed when the CPF contribution is lower than your monthly housing loan deduction. Just beware not to mess-up the formula used in the excel sheet. :)

A gentle reminder that the Ordinary Wage Ceiling is $5,000, which means the CPF contribution rate will still be based on $5,000 even if your income exceeds $5000.

Hope you find the template useful. :)

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