Why are the employee's contribution rates lower/different for those earning total monthly wages of more than $500 but less than $750?

Question

Accepted Answer

For employees earning total monthly wage of more than $500 but less than $750, the employee’s share of CPF contributions are computed based on phased-in rates to avoid a sudden drop in the employees’ take home pay when there is an increase in wage. You can use our CPF Contribution Calculator to calculate the CPF contributions applicable to your employees.

Why are the employee's contribution rates lower/different for those earning total monthly wages of more than $500 but less than $750?

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