salary ceiling for CPF payments will drop from $5K to $4.5K

• Cindyfeh

  22 Jul 05, 09:42

  Salary ceiling for CPF payments will drop from $5K to $4.5K come 1 Jan 2006. It means that monthly earnings over $4,500 will NOT receive CPF contributions. This reduces CPF balances as well as incomes.
  
  The above information may not be useful for most of us here but think of it in 5 to 10 years time you heng heng earn $4.6K and you will miss out on the employer CPF contribution!
  
  Also must keep reminding yourself that the gov can lower this ceiling some more.It was lowered from $6k to $5k early this year 2005. Next year is $4.5K. Who knows 5 years down the road it might be reduced to $2K. If that happens, kiss your 13% (or whatevers left of it) employer CPF contribution good bye and maybe also kiss your flat good bye if you depended too heavily on using your CPF to buy your flat.
  
  Be warned.
  
  Amen.
  
• spencer99

  22 Jul 05, 15:12

  The lowering to 4.5k wef 1st Jan 06 is NOT news..... already annouced long time ago....
  
  as to further lowering... no one can tell. but u r right, it is like a pay-cut....
  
• spencer99

  22 Jul 05, 15:13

  The lowering to 4.5k wef 1st Jan 06 is NOT news..... already annouced long time ago....
  
  as to further lowering... no one can tell. but u r right, it is like a pay-cut....
  
• Atobe

  23 Jul 05, 09:23

  
  CPF is part of the wage component to a Worker that is paid by the Employer - this is a fact that is seldom appreciated by the Worker, who will only look at the "Take Home Amount" as real wage.
  
  Over time, the CPF ceiling level will drop even lower as salary will slowly rise to the previous levels before the financial crisis of 1997 and 2001.
  
  Who do you think will benefit from this exercise ?
  
  The Government and its related GLCs are the biggest employer of Singaporeans, and is the biggest beneficiary to the continuous falling contributions into the CPF.
  
  On one hand, CPF is reduced; and on the other side, the rate of wage increments are also pressed down - resulting in a "double whammy" being experienced by the Worker.
  
  Who else can benefit but the Employer.
  
  
• Goondu74

  23 Jul 05, 09:40

  Originally posted by Cindyfeh:

  Salary ceiling for CPF payments will drop from $5K to $4.5K come 1 Jan 2006. It means that monthly earnings over $4,500 will NOT receive CPF contributions. This reduces CPF balances as well as incomes.
  
  The above information may not be useful for most of us here but think of it in 5 to 10 years time you heng heng earn $4.6K and you will miss out on the employer CPF contribution!
  
  Also must keep reminding yourself that the gov can lower this ceiling some more.It was lowered from $6k to $5k early this year 2005. Next year is $4.5K. Who knows 5 years down the road it might be reduced to $2K. If that happens, kiss your 13% (or whatevers left of it) employer CPF contribution good bye and maybe also kiss your flat good bye if you depended too heavily on using your CPF to buy your flat.
  
  Be warned.
  
  Amen.
  

  I think you have ther wrong concept, when it eventually drops to $4.5k, and you suay suay earn $4.6k, then only the extra $100 the govt will not top up the CPF, meaning u rugi only abt $13. The remaining 4.5K they will still pay u yr 13%
• Cindyfeh

  23 Jul 05, 09:43

  Originally posted by Goondu74:

  I think you have ther wrong concept, when it eventually drops to $4.5k, and you suay suay earn $4.6k, then only the extra $100 the govt will not top up the CPF, meaning u rugi only abt $13. The remaining 4.5K they will still pay u yr 13%

  Thanks! overlook on my part.