Budget 2015 – Highlights for Employers and Individuals

1.  CPF Changes:

• the income ceiling for CPF contributions will be increased from $5,000 to $6,000 from 1 Jan 2016;
• CPF contribution rates for workers aged 50~55 will increase by 2 percentage points (1 percentage point from employer, and 1 percentage point from employee);
• CPF contribution rates for workers aged 55~60 will increase by 1 percentage point (from employer);
• CPF contribution rates for workers aged 60~65 will increase by 0.5 percentage points (from employer);
• The Temporary Employment Credit will be enhanced and extended by two years

2. Tax Rebates:

• employers will enjoy a 30% rebate up to a cap of $20,000 on their payable taxes for the year;
• employers will benefit from a one-year road tax rebate of 20% for cars, 60% for motorcycles and 100% for petrol-run commercial vehicles; and
• tax deductions for donations will be increased from 250% to 300%, making it even easier for employers to expand their CSR efforts and/or give to their favourite charities.

3. Extension of Wage Credit Scheme – the Wage Credit Scheme has been extended to 2017.  The WCS helps employers by co-funding up to 20% of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000.

4. Support for Globalization – in a push to help companies expand overseas, the government has approved the following:

• the support level for SMEs for all activities under IE Singapore’s grant schemes will be increased from 50% to 70% for the next 3 years;
• the Double Tax Deduction for Internationalisation scheme will be enhanced to cover salaries incurred for posting Singaporean employees overseas; and
• the International Growth Scheme will be introduced to support larger companies venturing and expanding overseas.  Under this scheme, qualifying companies will enjoy a 10% concessionary tax rate on their incremental income from qualifying activities until 31 March 2020.

More information can be found here.

1.  SkillsFuture – in a move to build competencies of the workforce, several initiatives have been announced:

• Singaporeans aged 25 years old and above will receive a SkillsFuture Credit of $500 in 2016, to be used for continuing education and training;
• a new Earn and Learn programme will provide support for ITE and Polytechnic students to take on structured internship programmes with local companies;
• Singaporeans aged 40 and above will enjoy up to 90% education and training subsidies for courses funded by the Ministry of Manpower and the Workforce Development Agency

2.  CPF Changes:

• the income ceiling for CPF contributions will be increased from $5,000 to $6,000 from 1 Jan 2016;
• CPF contribution rates for workers aged 50~55 will increase by 2 percentage points (1 percentage point from employer, and 1 percentage point from employee);
• CPF contribution rates for workers aged 55~60 will increase by 1 percentage point (from employer);
• CPF contribution rates for workers aged 60~65 will increase by 0.5 percentage points (from employer).

3. Tax Rebates – employees will enjoy income tax rebate of 50%, capped at $1,000 for income earned in 2014.

4. Changes to Personal Income Tax Rate – the top 5% of income earners will pay more taxes.  For those with a chargeable income of above $320,000.00, the tax rate will increase to 22%, with smaller increases for others in the top 5%.  These will take effect only from Year of Assessment 2017.

More information can be found here and here (for families).