The Central Provident Fund (CPF) is a mandatory savings plan in Singapore, designed to support the retirement, healthcare, and housing needs of citizens and permanent residents. This article will comprehensively cover CPF contribution rates, calculation methods, salary caps, and important considerations for both employers and employees.
Understanding CPF Contributions in Singapore
CPF contribution rates depend on the employee's age, citizenship status (Singapore Citizen or Permanent Resident), and monthly salary. Rates are subject to change, so always refer to the official CPF Board website for the most up-to-date information. The following rates are effective from January 1, 2023, for Singapore Citizens and Permanent Residents (from their third year onwards) earning more than S$750 a month:
Contribution Rates for Singapore Citizens and PRs (3rd year onwards)
| Employee’s age | By Employer(% of wage) | By Employee (% of wage) | Total (% of wage) |
| 55 & below | 17 | 20 | 37 |
| Above 55 - 60 | 14.5 | 15 | 29.5 |
| Above 60 - 65 | 11 | 9.5 | 20.5 |
| Above 65 - 70 | 8.5 | 7 | 15.5 |
| Above 70 | 7.5 | 5 | 12.5 |
Contribution Rates for Singapore Citizens and PRs (1st and 2nd years)
Here are the CPF contribution rates for 1st year PRs with a monthly salary of $750 or more as of 1 January 2023.
| Employee’s age | By Employer(% of wage) | By Employee (% of wage) | Total (% of wage) |
| 55 & below | 4 | 5 | 9 |
| Above 55 - 60 | 4 | 5 | 9 |
| Above 60 - 65 | 3.5 | 5 | 8.5 |
| Above 65 | 3.5 | 5 | 8.5 |
Here are the CPF contribution rates for 2nd year PRs with a monthly salary of $750 or more as of 1 January 2023.
| Employee’s age | By Employer(% of wage) | By Employee (% of wage) | Total (% of wage) |
| 55 & below | 9 | 15 | 24 |
| Above 55 - 60 | 6 | 12.5 | 18.5 |
| Above 60 - 65 | 3.5 | 7.5 | 11 |
| Above 65 | 3.5 | 5 | 8.5 |
The CPF contribution rates will be the same as Singapore citizens from the 3rd year of PR status onwards.
Upcoming Changes (2025 and beyond)
As of January 1, 2025, there will be a slight increase in CPF contribution rates for older workers. The CPF contribution rates for employees aged 55 to 65 are increased to strengthen their retirement adequacy. The changes apply to wages earned from 1 January 2025:
|
Employee's age (years) |
2024 | CPF Contribution Rates from 1 Jan 2025 | ||
| Total (% of wage) |
Total (% of wage) |
By employer (% of wage) |
By employee   (% of wage) |
|
|---|---|---|---|---|
| 55 and below | 37 | 37 | 17 | 20 |
| Above 55 to 60 | 31 | 32.5 (+1.5) | 15.5 (+0.5) | 17 (+1) |
| Above 60 to 65 | 22 | 23.5 (+1.5) | 12 (+0.5) | 11.5 (+1) |
| Above 65 to 70 | 16.5 | 16.5 | 9 | 7.5 |
| Above 70 | 12.5 | 12.5 | 7.5 | 5 |
Get further information on CPF contribution rate changes on the Minister of Manpower official page.
CPF Salary Ceilings
The CPF Ordinary Wages Ceiling refers to the maximum amount of monthly income that is subject to CPF contributions. As announced in the Singapore Budget 2023, the CPF Ordinary Wages Ceiling will increase in stages from $6,000 to $8,000 by 2026. Here is the timeline of the increases:
- From September 2023, the CPF Ordinary Wages Ceiling will be raised from $6,000 to $6,300.
- From January 2024, it will go up to $6,800.
- From January 2025, it will increase to $7,400.
- From January 2026, the CPF monthly salary ceiling will reach $8,000.
Contributions are calculated based on ordinary wages up to the monthly ceiling and additional wages (bonuses, etc.) up to the annual ceiling.
Calculation Example
For a 26-year-old employee earning S$6,800 per month:
- Employee's contribution: 17% of S$6,800 = S$1,156
- Employer's contribution: 20% of S$6,800 = S$1,360
- Total CPF contribution: S$2,516
Different CPF Accounts
The CPF system comprises three main accounts:
- Ordinary Account (OA): Used for housing, investments, education, and certain insurance.
- Special Account (SA): Primarily for retirement savings and investments.
- Medisave Account (MA): Dedicated to healthcare expenses.
Upon reaching 55, savings from OA and SA are transferred to the Retirement Account (RA) to provide retirement income.
CPF for Self-Employed Individuals
Self-employed individuals have different CPF contribution requirements. MediSave contributions are compulsory if their annual Net Trade Income (NTI) exceeds S$6,000. Contributions to the OA and SA are voluntary.
Employer's Responsibilities and Penalties for Late Payments
Employers are responsible for contributing their share of CPF on time (by the end of the month). Late payments incur interest charges, and more serious penalties (fines and imprisonment) can result from repeated non-compliance or withholding of employee contributions.
Exemptions and Reduced Rates
Certain groups are exempt from CPF contributions, including foreigners, some domestic workers, and employees of the United Nations. Reduced rates apply to first- and second-year Permanent Residents and low-income earners.
Accurate Calculation of CPF Contributions
Accurately calculating CPF contributions requires careful consideration of age, citizenship, monthly wage, and the applicable contribution rates and ceilings. Use the official CPF Board resources or specialized HR software to ensure accuracy.
Conclusion
Understanding CPF contributions is crucial for both employers and employees in Singapore. Staying informed about the latest rates, regulations, and penalties ensures compliance and helps in planning for the future.
