Finance & Compliance

Complete Guide to Singapore CPF Calculations and Contributions

Katie Ash

Feb 8, 2024

Managing CPF (Central Provident Fund) contributions while ensuring compliance with legal regulations can be quite a daunting task. Even experienced HR professionals can find the intricate and time-sensitive procedures challenging.

But don't worry, Here’s everything you need to know about CPF; Singapore's mandatory social security system! 

What is a CPF Contribution?

The Central Provident Fund (CPF) is a mandatory social security system in Singapore. It helps Citizens and Permanent Residents save money for retirement and other future needs. Other needs include healthcare funding, home ownership of HBD housing, family protection, and asset enhancement. All of these needs must be met throughout their lives.

Working Singaporeans and Permanent Residents (PRs) contribute a percentage of their monthly salary to the Central Provident Fund (CPF). In addition, their employers are required to make a contribution to the CPF in addition to the employees' normal salary.

Who Contributes to CPF?

  • Employees: Singaporean Citizens (SCs), Permanent Residents (PRs), and foreigners working in Singapore who are aged 18 to 65 years old must contribute to CPF.
  • Employers: Employers in Singapore are legally obligated to make CPF contributions for their eligible employees.

CPF Contribution Cap for 2024

There is an upper cap of CPF contribution rates for employees 55 years & below. The current maximum monthly ordinary wage amount that is subject to CPF payments is $6,800. Any additional wages (such as bonus payment) are CPF liable up to the value of $102,000 Annual Ordinary Wages. For example:

・Monthly wage $8,500: Only the first $6,800 of monthly income will be subject to CPF contributions.

Annual bonus $15,000: Additional Wage Ceiling is $102,000 – ($6,800 x 12) = $24,000. Therefore the entire annual bonus of $15,000 is also subject to CPF contributions as it is below the CPF contribution cap.

What's CPF Ordinary Wage Ceiling from 2023 to 2026?

CPF OW ceiling is being progressively raised from S$6,000 to S$8,000 by 2026 while annual salary ceiling remains the same.

Here's a quick heads-up for Singaporean employers: the monthly salary ceiling for CPF contributions is gradually increasing. This means you'll be contributing a bit more to your employees' CPF savings over the next few years. But fret not, the changes are being rolled out in phases to give everyone ample time to adjust.

  • September 1, 2023: The ceiling rose from S$6,000 to S$6,300.
  • January 1, 2024: It bumped up to S$6,800 (which you're currently operating under).
  • January 1, 2025: The ceiling will reach S$7,400.
  • January 1, 2026: Finally, it will hit the new limit of S$8,000.

The CPF Contribution Rate in Singapore

CPF contribution rates for private sector and public sector non-pensionable employees who are:

  • Singapore Citizens
  • 3+years SPRs (Singapore Permanent Residents)
  • First and Second Year SPRs who have jointly applied with employers to contribute at full employer-full employee rates

CPF Contribution Rate Table for Citizen and 3rd+ year SPR

CPF Contribution Rate
Citizens + PR 3rd year + Monthly Wage ≥ $750
Age of employee CPF contribution by employer CPF contribution by employee Total CPF contribution rate
Up to 55 years old 17% 20% 37%
55 to 60 years old 14.5% 15% 28%
60 to 65 years old 11% 9.5% 18.5%
65 to 70 years old 8.5% 7% 14%
Above 70 years old 7.5% 5% 12.5%

CPF contribution Table for 1st and 2nd year SPR

CPF contributions are payable to foreign employees if they obtain Singapore Permanent Residency status. However, unless SPRs have jointly applied to contribute to CPF at the full employer/employee rate from the time they become permanent residents, they will contribute to their CPF fund at lower rates for the first two years after obtaining PR status. From the third year onwards, the employer and employee will contribute to CPF at the full employer/employee rates.

CPF Contribution Rate
Private Sector PR 1st year + Monthly Wage ≥ $750
Age of Singapore PR Employee Employer Contribution Employee Contribution
Up to 55 years old 4% 5%
56 to 60 years old 4% 5%
61 to 65 years old 3.5% 5%
Above 65 years old 3.5% 5%

CPF Contribution Rate
Private Sector PR 2st year (Monthly Wage ≥ $750)
Age of Singapore PR Employee Employer Contribution Employee Contribution
Up to 55 years old 9% 15%
56 to 60 years old 6% 12.5%
61 to 65 years old 3.5% 7.5%
Above 65 years old 3.5% 5%

Contributed money from both employer and employee for Citizens and PRs gets split between three accounts in the employees CPF fund.

🔸 Ordinary Account: Primarily for retirement and housing needs.
🔸 Special Account:
Primarily for retirement needs.
🔸 MediSave Account:
Primarily for healthcare needs.

On a persons 55th birthday, a fourth account, the Retirement Account (RA), is automatically created.

CPF Contribution Allocation Rate from 1st Jan 2024

CPF allocation rates
by age for private sector and public sector employees.

CPF Account Contribution Allocations
% of CPF Contribution
Employee’s Age (Years) Ordinary Account (Ratio of Contribution) Special Account (Ratio of Contribution) MediSave Account (Ratio of Contribution)
35 & below 0.6217 0.1621 0.2162
Above 35 – 45 0.5677 0.1891 0.2432
Above 45 – 50 0.5136 0.2162 0.2702
Above 50 – 55 0.4055 0.3108 0.2837
Above 55 – 60 0.3872 0.2741 0.3387
Above 60 – 65 0.1592 0.3636 0.4772
Above 65 – 70 0.0607 0.303 0.6363
Above 70 0.08 0.08 0.84

Employer CPF Responsibilities

As an employer in Singapore, you are responsible for the following:

  • Registering your company with the CPF Board
  • Identifying CPF-contributory employees
  • Calculating and deducting CPF contributions from your employees' salaries according to the CPF contribution rates.
  • Making your own employer CPF contributions on behalf of your eligible employees.
  • Timely submission of CPF contributions to the CPF Board.

Automate CPF Calculations with Swingvy

Swingvy’s payroll platform
was built for SMEs looking for payroll software that would simplify payment processing and make payday simple. Swingvy payroll software automates calculations of tax and CPF contribution along with other statutory contributions to ensure accuracy.

With a detailed payroll overview in the first step of payroll processing you can edit and update payroll calculations on the spot by expanding individual employee payroll lines to edit pay details directly.

Swingvy payroll is integrated with all major Singapore banks and IRAS, and compliant with MOM, certified by the Singapore Fintech Association and Monetary Authority of Singapore.  

CPF Calculator: Swingvy Payroll Sofware System

What are the Interest Rates on Money Held in CPF Funds?

Funds held by CPF earn the owner interest, which compounds over time, helping to grow retirement savings.

CPF Interest Rates
CPF Interest Rates 2024 (Source : CPF Board)

What Can CPF Funds Be Used for?

CPF funds are used for housing, medical care & coverage, retirement savings, ...etc. let's take a look!

  • Ordinary Account (OA): Your flexible friend! Use it for your dream home's down payment, approved education expenses, or even investments. Leftovers get saved for retirement.
  • Special Account (SA): This one's for retirement. Contributions earn attractive interest, but a small portion can be used for approved investments.
  • Medisave Account (MA): Your healthcare hero. Funds go towards hospital bills, approved medical procedures, and even health insurance premiums for you and your family.
  • Retirement Account (RA): Opens at 55. Your OA and SA merge here, creating a readily available pool of funds for your golden years.
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