Employee benefits are the compensation and benefits plan an employer offers to its employees. These plans motivate employees to remain with the company and encourage them to perform well.

Employee benefits include everything from health insurance to retirement plans to stock options. While the exact details will vary from company to company, there are a few common employee benefits policies that employers in Malaysia and Singapore typically offer their employees.

While you may think certain benefits apply to everyone, many businesses and organisations offer specific benefits such as flexible benefits to their employees based on their particular situations and needs. This article aims to provide an overview of the common employee benefits plans in Malaysia and Singapore and what an attractive employee benefits policy should include.

What do employers need to know about a benefits policy structure in Malaysia ? 

Benefits are extra compensation provided by an employer that is not salary. These include medical benefits, sick days, and any other employee benefits. Employees can receive either an indirect or direct paycheck that is not included in their regular salary.

In Malaysia, employers must make monthly contributions toward the Employee Provident Fund (EPF), the Social Security Organisation, and the Employment Insurance System(EIS) mandatory by law in Malaysia.

Suppose an organisation decides to reduce headcount or restructure the organisation. In that case, employers are required to prepare a Voluntary Separation Scheme (VSS) or Mutual Separation Scheme (MSS) in the case of retrenchments. 

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Employee Benefit Policy In Malaysia (Infographic)

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What do employers need to know about a benefits policy structure in Singapore [Infographic]

In Singapore, employers need to be wary of making Central Provident Fund (CPF) contributions at the monthly rates stated in the Central Provident Fund Act 1953. You can recover your employee's share of the contribution by deducting it from their monthly wages.

Here is a simplified infographic covering what employers need to know about Singapore's employee benefits policy structure.

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Here are common questions asked by employees regarding their CPF accounts

How to Top-up your CPF retirement account?

Singapore Citizens or Permanent Residents who fulfil the eligibility requirements can use this employee benefits scheme and boost their CPF account to meet retirement needs.

Under the Retirement Sum Topping-Up Scheme (RSTU), you can top up your Special Account (SA) if you are below age 55 or your Retirement Account (RA) if you are aged 55 and above. You can also support other loved ones' retirement saving goals.

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CPF Transfers

CPF savings earn interest, and your interest depends on the type of account you keep your money in. Savings in the Ordinary Account (OA) earn a base interest of 2.5%, while savings in the Special or Retirement Accounts (SA and RA respectively) earn a base interest of 4%.

If you are below 55 years old, you can transfer your OA savings to SA to earn higher interest. If you are 55 years old and above, you can set aside more savings for retirement by transferring your SA or OA savings to RA. Transfers can also be made between spouses, parents, parents-in-law, grandparents, grandparents-in-law and siblings.

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Cash Top-ups

Cash top-ups can be made to your CPF accounts or those of your spouse, parents, parents-in-law, grandparents-in-law, siblings, and children. You may enjoy dollar-for-dollar tax relief of up to $7,000 per calendar year if you make cash top-ups for yourself or any recipient listed above and an additional $7,000 per calendar year for any other individual who receives a cash top-up from you.

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What is the limit for all the account CPF Accounts?

Topping up your CPF account is subject to a cap. The maximum amount you can top up is the difference between the CPF Annual Limit (currently $37,740) and the mandatory CPF contributions made for the calendar year. Any excess will be refunded without interest if your mandatory CPF contributions and top-ups exceed this cap.

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What are the ways to top up your CPF contribution?

You can top up your three CPF accounts by logging on to the CPF website or GIRO. For payment on the CPF website, log in to e-Cashier and pay via PayNow QR or eNETS.

Select paying as a 'Member' and click on 'Contribute to my three CPF accounts (Non-tax deductible).'

For Payment through GIRO, you can make monthly top-ups, and the government will only deduct up to the allowable limit for the year.

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Which employee benefits should you offer?

When choosing which benefits your business should offer, it's important to think from your employee's perspective. Think about which benefit would make the most sense for your employees. Instead of thinking about what benefits work best for your business, think about which benefit your employees would most appreciate. 

Here are five attractive benefits that can be used to retain and attract talent.

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1) Medical Insurance:

Many employees would like to see the availability of health care insurance coverage as a benefit. If your business is looking for a cost-effective solution, health care is a great option.

However, according to the Mercer Marsh Benefits Global Insurer report, health care is very expensive. It is expected that the medical inflation rate will increase from 8.8% to 10.0% in Asia. It can also cause a burden on a company's budget and can be complicated to implement. Hence, many organisations would choose a health plan for their key employees.

Utilising HealthMetrics Insurance Module, employers can provide access to all outpatient and inpatient treatment for employees as a cheaper alternative than adopting an insurance plan. Moreover, HealthMetrics digital platform manages and provides transparency on medical expenditure, lowers administrative duties, and provides insightful reports for better preventive care for employees.


2) Mental Health Programs:

Mental health programs are generally offered as part of the employee benefits package and are intended to assist employees with personal growth. There are two main types of mental health programs: counselling services and life skills workshops. Counselling services can be offered individually or in a group setting. Life skills workshops help employees develop the skills needed to improve their lifestyles, leading to a better career, better relationships, and a healthier lifestyle.


3) Work-life balances:

Work-life balance refers to the idea that employees are entitled to some balance between their jobs and their private lives. It also refers to the idea that employers are responsible for ensuring that employees are not overextended or overworked. Employees should have a balance between their professional and personal lives. This means that they should not be overburdened with too many responsibilities.


4) Wellness Programs:

A wellness program is designed to help employees stay fit and healthy. In fact, wellness programs are often seen as a good recruiting tool. Many employers are now offering their employees' health checks. These health checks include vision, hearing, heart, blood, and dental health tests. They are done regularly for the safety of the employees and the business's health.


5) Financial wellness programs:

Financial wellness programs help reduce stress and anxiety and prevent financial problems. This is especially important to offer to workers who have a high risk of financial problems. They include life insurance, retirement, disability, and mortgage protection. They can also include benefits such as an education or savings plan. The key to a successful financial wellness program is to offer multiple options to the employee.

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Conclusion

The most important thing to remember when choosing an employee benefits package is to make sure that your benefits package provides enough benefits to your employees to justify the costs involved.

A well-written benefit package will positively impact both your employee retention and employee recruitment. It is always a good idea to make sure that your benefits package is attractive and easy to administer. This will ensure that you can maintain an efficient system for administering the benefits package.

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