accounting-services-singapore

Changes to CPF Contribution Rate and Auto Inclusion Scheme

December 13, 2022

We are left with few more weeks before we say Goodbye to year 2022 and start a fresh new year in 2023. However, this remaining weeks may be challenging for some employers as there are 2 major changes to Singapore Payroll effective 1 January 2023. In other words, Employers are left only with limited time to take actions.

 We have summarised 2 major changes effective 1 January 2023.

 

1. Changes in CPF contribution Rate effective 1 January 2023:

      1. Do you know that CPF contribution rates will increase effective 1 January 2023?
      2. Does your company have employees that belong to the Age Group of above 55 years to 70 years old?
      3. If yes, the below revised CPF contribution rates are applicable to your employees that belongs to the above-mentioned Age Group.

    Source: cpf.gov.sg/employer/increase-in-cpf-contribution-rates-1-january-2023

    Actions Required by Employer?

      1. If your company is using an In-House Payroll System or External Payroll Software, please ensure the payroll engine has been updated with the revised CPF contribution rates.
      2. If your company is using an Outsourced Payroll Provider, please ensure the Payroll Report for Jan 23 has been computed correctly with the new CPF contribution rates.
      3. If your company is using Microsoft Excel to do Payroll Computation, please update the Excel formulas accordingly.

     

    2. Employers cannot use IRAS AIS offline application

    Auto Inclusion Scheme (AIS) for Employment Income:

    Do you know that AIS is compulsory for Employer with 5 or more employees?

    If my company have 4 active employees in the current month payroll, does it mean that my company is not required to register for AIS?

    The answer is NO.

    Even though your company has 4 active headcounts, your company needs to include those employees who has resigned or left during the year from 1 January to 31 December 2022. 

    If your company has less than 5 employees (regardless the number of employees), IRAS also encouraged your company to join the AIS and submit the employees’ employment income electronically.

    IRAS AIS Offline Application:

    IRAS AIS Offline Application will not be available for use effective 1 January 2023.

    Actions Required by Employer?

    For those employers who are currently using IRAS AIS offline application, we strongly encourage them to switch to payroll software with API or to submit the employment income records using IRAS Online Application.

    We have summarised the below cases who is currently using IRAS offline application:

    • Employers who are still doing the Payroll Manually or using Excel.
    • Employers who do not have a Payroll Software
    • Employers who have Payroll Software but their software cannot integrate with the IRAS AIS Application Programming Interface (API)

    Source: https://www.iras.gov.sg/taxes/individual-income-tax/employers/auto-inclusion-scheme-(ais)-for-employment-income/submit-employment-income-records

     

    How can we assist you?

    We give guidance to our clients in ensuring that they are compliant with the latest regulations. We also offer comprehensive HR and Payroll services to suit the needs of our clients. Regardless of the size of your company, you can expect:

    1. High quality and professional advice from our dedicated HR & Payroll Department.
    2. Accurate and timely payroll services to relieve our clients from any hassle and give them peace ofmind to focus on growing their businesses.

    Additionally, we offer web-based HR and payroll solutions to facilitate our clients’ needs for electronic approval of leave and expense claim submissions.

     

    About Ledgen Group

    Ledgen Group offers a well-rounded suite of statutory compliance services in Singapore, Hong Kong, Malaysia and other jurisdictions. We provide excellent value-for-money services to our clients by assisting in their company set-up, corporate secretarial, accounting, tax compliance, as well as HR and payroll outsourcing needs.

    Come talk to us today at enquiry@ledgengroup.com.

     

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