THE CPF employer contribution rate will go up by one percentage point across the board from January next year, with this increase to be funnelled towards the employee’s Medisave account.
This will lift the overall CPF contribution rate from 36 per cent currently to 37 per cent in 2015, of which 20 percentage points comes from employees and 17 percentage points from the employers.
This is expected to help citizens provide for future healthcare needs, such as the higher premiums widely expected when the revamped national health insurance plan MediShield Life is launched next year.
To help firms shoulder the heavier burden, the government will introduce a one-year temporary employment credit (TEC) scheme, under which employers will receive an offset of 0.5 percentage point of wages, up to the CPF salary ceiling of $5,000. The TEC, which also commences in January next year, will cost the government $330 million.