Employers in Singapore face challenges with flexible benefits

Flexible benefits that employers offer to employees as a way to retain and attract key talent have recently come into conflict with the main benefit offering in Singapore, the Central Provident Fund. The Central Provident Fund (CPF) is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, home ownership, family protection, and asset enhancement. Flexible benefits can include health screenings, gym membership, festive bonuses and on some occasions, groceries. However, these benefits can be subject to payment of CPF and many employers failed to make the appropriate contributions, assuming that any reimbursements to employees based on receipts and actual spending do not qualify for CPF payments, when in fact, CPF payments are required if the flexible benefits are made as cash payments to employees for expenditures that were not incurred on behalf of the employer. These errors can end up being costly for employers, as auditors have levied heavy fines of up to S$10,000. Employers need to pay close attention and internally review all benefits made to employees to ensure compliance with the CPF.

Fuente: Globex

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