Calculating the total cost of employing staff

[Splatted]

I was wondering if anyone could advise me on the all-inclusive cost (including employer costs) of hiring 2x staff members, both on a one year contract.

The first person is to arrive on an EP, and is to receive $4000/month x 13 months.

The second, who is PR would receive $4800/month x 13 months

What other expenses should be taken into account, and how are they typically calculated?

Thanks in advance for any advice.

[sundaymorningstaple]

As long as they are not on "S" or "WP" passes, there are no monthly levies. They cannot contribute to CPF so as far a Government costs are concerned about the only additional cost would be the Skills Development levy but considering that both are earning more than 2000/mo then they will not be paying that either. Medicals, if required are a one time cost and normally only cost around $50.

You have already taken into consideration the 13th month bonus which is optional anyway.

The only other direct cost is the cost of any perks that you may be providing such as housing and/or transport allowances, training allowances, or the cost of providing Insurance/medical benefits, home leaves tickets, schooling and the rest.

Regarding perk cost calculations, this is up to the employer. They may provide outright or subsidize. Training allowances as per company SOP. Same with Group Insurance/medical as per company policy. Home leave/schooling if provided would have to be negotiated I would think.

Regarding the PR, You do not need the expat perks side of the costs at all, as they would normally provide their own once the become a PR. You would need the Insurance/medical/training costs depending on your company policy.

The cost of employer CPF contributions for a PR would depend on the length of time that person has been a PR. If they are a citizen or a PR with more than 24 months as a PR the rate of employers contributions would be 14.5% of gross income per month on a cap of $4,500/mo salary. For PR's with less than two years it is graduated rate between 4%-9% (1st & 2nd year of PR) of up to the $4,500/mo. salary cap. ($8483/year max at the full rate of 14.5%) ((12x$4500)*14.5%=$7830 & (1x$4500 (additional income)*14.5%=$652.50)

sms

[Splatted]

They cannot contribute to CPF

Thanks SMS, I thought for the second person who is a PR, CPF was still compulsary ?

[sundaymorningstaple]

They cannot contribute to CPF

Thanks SMS, I thought for the second person who is a PR, CPF was still compulsary ?

I was editing while you were reading as I missed the PR bit the first time.

[Jeppo]

The cost of employer CPF contributions for a PR would depend on the length of time that person has been a PR. If they are a citizen or a PR with more than 24 months as a PR the rate of employers contributions would be 14.5% of gross income per month on a cap of $4,500/mo salary. For PR's with less than two years it is graduated rate between 4%-9% (1st & 2nd year of PR) of up to the $4,500/mo. salary cap. ($8483/year max at the full rate of 14.5%) ((12x$4500)*14.5%=$7830 & (1x$4500 (additional income)*14.5%=$652.50)

sms

Since you're the resident expert on this, maybe you can clarify this for me? I was told that those apply for the first two years of work, not the first two years of PR. ie. if someone become a PR in 2004 but didn't work until 2007 they would start at the lower cpf rates. True or company trying to get out of higher payments?

[sundaymorningstaple]

The rates are determined by the duration that you have been a PR. Regardless of when you started work. When submitting initial CPF payments for a new employee who happens to be a PR an employee must inform the CPF Board when the PR was granted to enable them to compute correctly. It is not the first two years of employment.

The reason for the misconstrued information is probably because most people who take up PR are already working on employment passes. It's the spouses who also gain their PR and don't go out to work right away that would have this problem with PR date and work date.

sms