To stay relevant to the changing business environment and needs of businesses in Singapore, the government is constantly updating business laws and regulations. To help you better navigate these new laws and comply with all of them, here are some changes you need to take note of in 2016.
1. New CPF Rules
Earlier this year, then-Finance Minister Tharman Shanmugaratnam shared in his Budget speech that there would be a few changes to the CPF in 2016, aimed at helping middle-income Singaporeans accumulate additional CPF savings for their retirement.
Here is a summary of all the changes:
- CPF Salary Ceiling: Raised to $6,000 (currently $5,000)
- Contribution Rate (50 to 55 years): 1 percent increase by employer, 1percent increase by employee
- Contribution Rate (56 to 60 years): 1 percent increase by employer only
- Contribution Rate (61 to 65 years): 0.5 percent increase by employer only
2. Payroll Changes
From 1 April 2016 onwards, as business owners, you will be required to issue itemised payslips and key employment terms (KETs) to employees covered under Singapore’s Employment Act. The purpose of this change is to allow employees to gain a better understanding of how their salaries are being calculated and their employment terms and benefits. This also helps employers prevent misunderstandings and minimises disputes at the workplace.
When you issue payslips to your employees every month, make sure to include these components:
- Full name of your business
- Full name of employee
- Date of payment
- Basic salary
- Basic rate of pay (e.g. $7 per hour or $50 per day)
- Total number of hours or days worked
- Salary period (e.g., 1 to 31 July 2015)
- Allowances (e.g., transport)
- Additional pay (e.g., bonuses)
- Salary deductions (e.g., CPF contribution)
- Overtime hours and rate worked
- Overtime pay
- Overtime period (if different from salary period)
- Net salary paid in total (basic salary + allowances + additional pay + overtime pay)
To better help you prepare for these changes, there’s an assistance package which consists of blank payslips and KETs which you can fill in by hand. Alternatively, you can download this handy eBook on 10 compliance tips for Singapore SMEs in 2016.
Bonus: Calculating manpower quota
As we all know, in Singapore, there are three basic tiers of work passes and permits: employment pass, S Pass, as well as work permits for foreign workers.
Here’s a table of comparison across the three passes:
So how do you know which employment quota your company has? Well, there are two key factors that determine that: how many local employees you hire, and which sector your company is operating in. The general rule of thumb is that you get one additional foreign employment quota for every 2 local employees, though this varies according to which sector your company operates in.
Here’s an example of the employment quota of a company in the service sector:
– See more at: http://business.asiaone.com/sme-central/news/2-important-changes-singapores-smes-need-prepare-2016#sthash.eqFPOxr7.dpuf
Article sourced from:
2 important changes Singapore’s SMEs need to prepare for in 2016 – at: http://business.asiaone.com/sme-central/news/2-important-changes-singapores-smes-need-prepare-2016#sthash.eqFPOxr7.dpuf