What is CPF?

Jobs and Careers in Singapore: I am being paid less at the company where I work because my CPF contribution is higher than the others in the company. What do I do?

  • I am working in a startup where I am the only Singaporean. The others are all foreigners or new permanent residents who are still in the first or second year of their PR. So my CPF contribution is much higher than the others. I have been interning here for the past 4 months and I was offered a permanent position recently. However, I was told that since my CPF contribution was so high, the company cannot pay me as much as they are paying the others. The offer I have received includes the employer contribution amount as well. I am a postgraduate and the effective gross salary is much less compared to the others working in the company and even by general market trends. I have started looking for another job, but the market is pretty bad and I really need a job. Can anyone please advice me on what to do? Is it even legal to get the employer contribution from the employee?

  • Answer:

    Let me reframe your situation from an HR perspective. They are negotiating your package. They have a fixed budget for you and it includes their contribution to your cpf. So if their budget for you is $2000 total they have to subtract their cpf contribution. it comes out to $1600 per month salary they can offer you. And they will contribute $400 as their share of your cpf. This is NOT illegal. The other foreigners may have more take home pay (salary) even though the budget per person is the same. They dont have cpf commitments nor benefits. Ultimately, its a free market. They have made an offer, and its your decision to accept our not. My suggestion, since you're a recent grad, is to accept the position, learn, and at the same time look for new position. Heres why... 1) Youre perceived to be more valuable by a prospective employer if you are employed vs if you are at home shaking leg. 2) if you decide to turn down the offer, and remain without income for a month or two, is that more loss than receiving a lower salary until you find something else? Good luck.

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Other answers

If I may clarify do you mean that the gross pay (CPF employee and employer contribution+take home pay) is lower than the take home pay of your foreign counterparts? If so there are some options. Technically it isn't legal to do that. And you could have a strong case to sue the company for discrimination if you can prove that you are intentionally being underpaid because of the CPF contributions. Of course getting the appropriate information to make a case will be difficult and the cost of pursuing such a matter would also be costly, and you'll still end up with the same problem of not having a job. You could technically make a complaint to MOM, since those are anonymous and get that company you are working for investigated. But since you haven't started working there, MOM case officers would have no reference of a Singaporean salary vs. other employees at the firm. So you'd have to sign on with the unfair wage contract to then make the complaint. Hope this helps.

Andrew Wilfred

I don't think it is illegal, it is just what your company can afford. Is this your first job after your postgraduate studies? I am assuming that you do not have any prior professional experience (temp jobs in McD does not count). I don't believe a postgraduate (Diploma or Masters) make you anymore "experienced" or valuable then your bachelor degree holding peers. You are just as inexperience as them (assumption here). Yes, your career progression in the future may be slightly boost by your postgraduate studies, but not when you first start off (unless of course you're in some government agencies where paper qualification is king (speculating here), but then again for it to count, you'll probably have to be a scholar, which if that is true, you'll not have this problem to begin with). Since you mentioned that it is a start-up, why don't you negotiate a deal to include profit sharing and/or stock options, and also an agreed increment amount if you meet a certain performance target in a given time period. My take is just do it first. You can leave anytime.

Teng Shah Ping

Why does every graduate assume it is the responsibility of the employer to pay you handsomely when you have yet shown any contribution to their cash flow? Listen I'm not a graduate. Never will be. Why? Because those professor or lecturers are paper talk. Most of them. They do not have real life experiences and what they teach 90% doesn't apply in your next job. The Internet has made information so widely available and readily for anyone who wishes to learn. Business, finance, programming you name it. They have it. Use the money your company pays you to do your own startup. Endure the ot and long hours because you are creating your own side business. Never never assume your position is solid. Globalization has made everything expendable. Unless you are the MP. Use the Internet. Find information about creating money. Sell information, sell knowledge, sell inventories. Sell Amazon items. Write a book. Create a fan of followers. Trade stocks, trade currency trade binary options. The brokers are desperate to get your business that they made it easier for you to make decisions. The most important thing is aim to create your own future. Take responsibility. You have no one to blame but yourself if the end doesn't go your way.

David Aw

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