QUESTION

Dear All,

I have an employee who is currently under EP, he is applying PR,I wish to find out if he got his PR approved, which mean my company will be liable for additional 17% CPF contribution to pay. How your company handle this extra cost which not in the yearly budget at first. My Manager asked me to find out will it be possible if we can revise his salary ( salary deduct the 17%) by signing a new employment contract? and what if the employee refuse to this new salary? In fact, the expat salary we gave him is all inclusive (housing, transport and taxes).

Thank you.

Chloe

REPLY 1

For first year SPR, the employer CPF contribution rate is only 4% (depending on employee’s age). Therefore the full 17% (depending on employee’s age) contribution is only from 3rd year onwards.

You can consider having an addendum to his employment contract drawn up. Negotiate with him on the basis that his package is inclusive of tax, now that he has obtained SPR status, the new package will therefore be this and that.

CM

REPLY 2

If he gets his PR status, there will be a change of Employment terms and conditions. You will need to terminate the current Expat Contract. Start working on a fresh new Contract of Service stating what his local entitlement will be at his level. EG: No more allowance of Housing, taxes, etc.

Both parties need to start communication now to be in sync with new Employment terms & conditions/ benefits as a PR employee. You can call or check out MOM website for further assistance.

Rose

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