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                                                                                                                                                                                                                                          SINGAPORE PHARMBIO GUIDE 2021/2022
  may also use the fund for purposes like investment, healthcare, education and home ownership.
All employees who are Singapore citizens and Permanent Residents (PRs) contribute towards the CPF savings, with the latter contributing at a reduced rate during the first two year of being a PR. However, contributions are not required for expatriate employees on Employment Passes or Work Permits.
The current employers’ CPF contribution rate is set at 17% of the employees’ wages for employees aged 55 years old and below. This rate is gradually reduced to 7.5% for those above 65 years old. On the other hand, employees contribute 20% of their wages up to 55 years old. This rate will be gradually reduced to 5% once the employee has passed 65 years old. Both contributions are subjected to a salary ceiling of S$6,000, resulting in maximum monthly contributions of S$1,020 (from the employer) and S$1,200 (from the employee themselves) for each individual.
Companies should learn about the CPF requirements prior to their initial manpower and financial planning as CPF contributions affects an employee’s proposed wages. For example, an employee earning S$6,200 per month will have to contribute S$1,200 to his CPF account each month, reducing his take home pay to S$5,000. Furthermore, his employer will have to contribute an
additional $1,020 into his CPF account. Thus, the employer is effectively paying S$7,220 per month to hire this employee.
To make the first contribution, a new employer is required to submit a duly completed Form CPF/1 along with a cheque for the contribution amount to CPF Board (www.cpf.gov.sg). A welcome package and the new employer reference number will subsequently be sent once the payment has been processed.
Employment Pass
Foreign professionals have to obtain an employment pass before they can take up employment or carry out any business in Singapore. Foreigners who intend to become business owners may apply for an EntrePass from the immigration authorities before registering their businesses with ACRA. Such applicants have to register their businesses as private limited companies. These companies must have a paid-up capital of at least $50,000. Furthermore, the businesses need to meet certain requirements in order for the applicants to be eligible for an EntrePass, including funding from accredited sources, possessing intellectual property, having research collaboration with local institutes, or being supported by a government-supported business incubator. The applicants should also have at least 30% shareholding in their companies.
Other than the EntrePass, there are 3 other types of employment passes:
Employment Pass – for a foreigner with acceptable tertiary / professional qualifications who has received a job offer in Singapore. Applicant’s basic salary should be more than S$3,600 per month. More experienced applicants are required to command even higher salaries in order to qualify for the Pass. To comply with the rules of the Fair Consideration Framework, local firms are required to advertise a position in the mycareersfuture website (www.mycareersfuture.gov.sg) for a minimum period of 14 days before they may submit an Employment Pass (EP) application to hire a foreigner.
S Pass – for foreign mid-level skilled professionals, specialists or technicians with educational qualifications of degree or diploma and a fixed monthly salary of at least S$2,400. More experienced applicants are similarly required to command higher salaries which commensurate with their work experience and the work quality that they bring to the job. The number of S pass holders within a company is capped at 15% of the company’s total workforce in the services sector and 20% in the other sectors. The employer will also need to pay the foreign worker levy for all S pass holders under its employment.
Personalised Employment Pass (PEP) – offers foreign professionals greater job flexibility since this pass is not tied to a specific employer and pass holder is able to switch jobs within the country without the need to cancel and re-apply for another employment pass. The pass also
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