4.12 First, increasing take-home pay. Currently, employees start contributing CPF when their monthly incomes exceed $500, but at a lower rate. Their contributions are increased to reach the full rate of 20% at a monthly wage of $750. We will now increase the employee CPF contributions more gradually, so that employees only pay the full rate of 20% when they get to a monthly wage of $1,500. Workers earning $1,000 or less will have larger reductions in employee contributions and hence larger increases in take-home pay. This change in employee contributions will apply to all low-wage workers regardless of age. The contribution rates for workers above 50 years old, which are lower, will be scaled down accordingly.
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