Astab would like to wish all our clients and readers a happy and prosperous new year! As we step into the new year, we would like to remind all our readers a few of the upcoming compliance changes and the expiry of government grants.
Changes to CPF Contribution Rates Effective 1st January 2014
From 1 January 2014, the CPF contribution rates for low-wage workers will be increased to help them save more for retirement. Private sector employees and government non-pensionable employees, including first and second year Singapore Permanent Residents (SPR), who are earning monthly wages of >$50 to <$1,500 will benefit from the changes. The following changes will apply to wages earned from 1 January 2014:
The phased-in employer’s CPF contribution rates for all employees aged above 35 years old and earning wages of >$50 to <$1,500 will be increased to the full rates.
There is no change for employees aged 35 years and below and earning wages of >$50 to <$1,500 as the full employer’s CPF contribution rate already applies.
(ii) Increase in Employee’s CPF Contribution Rate
The phased-in employee’s CPF contribution rates for all employees earning wages of >$500 to <$750 will be increased. The phased-in employee's contribution rates for all employees earning wages of >$750 to <$1,500 will be increased to the full rates.
There is no change for employees earning wages of ≤$500 as they are not required to make employee CPF contributions.
You can also visit the CPF Board website for the softcopies of the CPF Contribution Rate Booklets.
Auto-Inclusion Scheme for Employment Income
From Year of Assessment (YA) 2014, employers with 14 or more employees or who have received the "Notice to File Employment Income Of Employees Electronically" are required to participate in the Auto-Inclusion Scheme (AIS) under S68(2) of the Income Tax Act. Employers who are participating in the AIS for Employment Income can use the e-Submission of Employment Income to submit details of their employees' employment income to IRAS electronically. The submitted income and deduction information will then be automatically included in the employees' income tax assessment. Companies not in the AIS for Employment Income must still provide the hard copy IR8A/IR8S/Appendix 8A/Appendix 8B to their employees.
Expiry of the Productivity and Innovation Credit
The Productivity and Innovation Credit will end in the Year of Assessment (YA) 2015. This means that companies and businesses can claim the cash payout and enhanced deduction in qualifying expenditures up til the end of their financial year ending 2014. However, we hope that IRAS would extend the program to help companies offset the rising cost of business in the current challenging environment.