Singapore Budget 2023: What HR Professionals Need to Know
Singapore’s Budget 2023, announced recently, contains several key measures that will impact HR professionals and their organizations. From changes to the CPF contribution rates and salary ceiling to new initiatives supporting working parents, it’s important for HR leaders to stay up-to-date with these developments to ensure compliance and take advantage of any available benefits.
- CPF Salary Ceiling Increase
One of the most significant changes for HR professionals is the adjustment to the CPF monthly salary ceiling. This ceiling will be raised in stages to $8,000 by 2026 to keep pace with rising salaries and help middle-income Singaporeans save more for their retirement. The increase will be implemented in four stages, starting from 1 September 2023, and will allow employers and employees to adjust to the changes.
This means that employers will need to make changes to their payroll systems and ensure that they are contributing to their employees’ CPF accounts according to the new ceiling rates. HR professionals will need to work closely with their payroll teams to ensure that these changes are implemented smoothly and that employees are aware of the changes to their CPF contributions.
- CPF Contribution Rates for Older Workers
The Budget 2023 also includes updates to CPF contribution rates for older workers. From 1 January 2024, the changes to the CPF contribution rates will be as shown below:
To help mitigate the rise in business costs, the Government will provide employers with a one-year CPF transition offset equivalent to half of the 2024 increase in employer CPF contribution rates for every Singaporean and permanent resident worker aged above 55 to 70. Employers do not need to apply for the offset as it will be provided automatically.
HR professionals will need to work with their payroll teams to ensure that the new contribution rates are implemented correctly and that employees are aware of the changes.
- Parental Leave Policies
The Budget 2023 also includes changes to parental leave policies. Each parent will receive 12 days of unpaid infant care leave per year for the first two years of their child’s life from 1 January 2023, up from six days currently. All parents of Singaporean children who have worked with their employer for a continuous period of at least three months will be eligible for this additional time off.
HR professionals will need to update their leave policies to ensure that the new parental leave entitlements are reflected accurately. They will also need to work with managers to ensure that the new leave entitlements are communicated to employees and that managers are aware of their responsibilities in granting this leave.
- Enhancements To Employment-Related Schemes
Finally, the Budget 2023 includes enhancements to various employment-related schemes, including the Enabling Employment Credit, Uplifting Employment Credit, Senior Employment Credit, and Part-time Re-employment Grant. HR professionals will need to be aware of these enhancements and work with their managers to ensure that eligible employees are enrolled in these schemes and that the company is taking advantage of any available funding or support.
Overall, the Budget 2023 includes a number of changes that will affect HR professionals in Singapore. HR professionals will need to work closely with their payroll teams, managers, and employees to ensure that these changes are implemented smoothly and that employees are aware of the changes to their CPF contributions and leave entitlements.
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