What Employers Need to Understand Regarding Company CPF Contributions in Singapore
Employers in Singapore carry a key responsibility beyond salaries, which is CPF contributions. And it’s not just a legal requirement- ensuring you comply with every CPF rule can also help boost confidence and trust within your business and employees. On the other hand, missteps can result in compliance issues and hefty penalties. Thus, as a business in Singapore, it’s essential to have a clear understanding of how CPF contributions work.
This article discusses everything you need to know about Singapore CPF contributions- from the rate for both employers and employees, penalties, FAQs, and other essential information.
What is CPF Contribution?
The Central Provident Fund (CPF) is a mandatory savings plan by the Singapore government designed to provide retirement, healthcare, and housing benefits for Singaporean employees. According to the plan, each employee in Singapore opens a CPF account, where both the employer and employee contribute a percentage of the employee’s wages every month. The employee can then use this money for several purposes.
CPF contributions are allocated into different accounts: the Ordinary Account (OA) for housing and investment, the Special Account (SA) for retirement, and the MediSave Account (MA) for healthcare expenses, which the employee can access based on their needs. The purpose of CPF is to provide financial stability for employees and promote self-sufficiency in the business sector.
CPF Contribution Rates – Singapore
The CPF contribution mostly depends on the type of residency and also the total wage received per month. We’ve presented an overview of the information for each case. For better information, we recommend that you go through the official CPF contribution rate table by the CPF board.
Legend:
- TW = Total Wages (Ordinary Wages + Additional Wages)
- OW = Ordinary Wages (monthly salary, capped at $6,800)
- AW = Additional Wages (bonuses, capped at $102,000 – OW already contributed for year)
Table 1: CPF Contribution Rate table for Singapore Citizens and SPRs (3rd Year Onwards)
| Age (Years) | Employer’s Share | Employee’s Share |
|---|---|---|
| 55 & below | >$50–$500: 17% (TW) | Nil |
| >$500–$750: 17% (TW) + 0.6 (TW–$500) >$750: [37% (OW)]* + 37% (AW) | 0.6 (TW–$500) >$750: [20% (OW)]* + 20% (AW) | |
| Above 55–60 | >$50–$500: 13% (TW) | Nil |
| >$500–$750: 13% (TW) + 0.6 (TW–$500) >$750: [29.5% (OW)]* + 29.5% (AW) | 0.6 (TW–$500) >$750: [15% (OW)]* + 15% (AW) | |
| Above 60–65 | >$50–$500: 9% (TW) | Nil |
| >$500–$750: 9% (TW) + 0.6 (TW–$500) >$750: [18.5% (OW)]* + 18.5% (AW) | 0.6 (TW–$500) >$750: [9.5% (OW)]* + 9.5% (AW) | |
| Above 65–70 | >$50–$500: 7.5% (TW) | Nil |
| >$500–$750: 7.5% (TW) + 0.6 (TW–$500) >$750: [14% (OW)]* + 14% (AW) | 0.6 (TW–$500) >$750: [7.5% (OW)]* + 7.5% (AW) | |
| Above 70 | >$50–$500: 7.5% (TW) | Nil |
| >$500–$750: 7.5% (TW) + 0.6 (TW–$500) >$750: [12% (OW)]* + 12% (AW) | 0.6 (TW–$500) >$750: [5% (OW)]* + 5% (AW) |
Table 2: Singapore CPF Contribution Rate table for Permanent Residents (1st Year)
| Wages | Employer’s Share | Employee’s Share |
|---|---|---|
| >$50–$500 | 4% (TW) | Nil |
| >$500 | 4% (OW)* + 4% (AW) | 2% (OW)* + 2% (AW) |
Table 3: Singapore CPF Contribution Rate table for Permanent Residents (2nd Year)
| Wages | Employer’s Share | Employee’s Share |
|---|---|---|
| >$50–$500 | 9% (TW) | Nil |
| >$500 | 9% (OW)* + 9% (AW) | 5% (OW)* + 5% (AW) |
Table 4: Singapore CPF Contribution Rate table for Graduated Employer Contribution Rates (Citizens & SPRs 3rd Year Onwards)
| Age (Years) | Employer’s Share |
|---|---|
| 55 & below | 17% |
| Above 55–60 | 13% |
| Above 60–65 | 9% |
| Above 65–70 | 7.5% |
| Above 70 | 7.5% |
Table 5: Graduated Employee Contribution Rates (Citizens & SPRs 3rd Year Onwards)
| Age (Years) | Employee’s Share |
|---|---|
| 55 & below | 20% |
| Above 55–60 | 15% |
| Above 60–65 | 9.5% |
| Above 65–70 | 7.5% |
| Above 70 | 5% |
*For more information on your specific rates, refer to the CPF Contribution Calculator,
CPF Contribution Ceiling in Singapore
CPF contributions are calculated only up to specific wage ceilings, ensuring contributions remain fair yet sufficient. Here’s what you should know:
| Ceiling Type | 2025 Value | Notes |
|---|---|---|
| Ordinary Wages (OW) Ceiling | S$7,400/month | Only OW up to this amount each month attracts CPF contributions. Any amount above that is excluded. |
| Annual Salary Ceiling (OW + AW) | S$102,000/year | Sets the maximum total annual wages (inclusive of OW & AW) that can attract CPF contributions. |
Quick Example: If you earn S$9,000 in OW monthly, CPF contributions apply only to S$7,400. Likewise, CPF contributions max out at S$102,000/year even if total OW + AW exceed this. Future ceiling increases include OW rising to S$8,000/month from January 2026.
CPF And Taxes: Is CPF Contribution Taxable?
CPF contributions themselves are not taxable, but the salary paid to the employee is taxable.
- Employee’s salary: The employee is taxed on their salary before CPF deductions.
- Employer’s CPF contribution: The employer’s contribution to CPF is not part of the employee’s taxable income.
Employers should also be aware that the CPF contributions are not tax-deductible for the employer.
How to Calculate Your Company’s CPF Contributions
- Determine the monthly salary of the employee. If they earn more than $6,000, cap the amount at $6,000.
- Find the relevant CPF contribution rate based on the employee’s age group.
- Multiply the salary by the contribution rate to determine the contribution amount.
Example: For an employee earning $10,000 and aged under 55:
Employer’s contribution = $6,000 × 17% = $510
Penalties for Non-Compliance with CPF Contribution in Singapore
Employers in Singapore are legally required to pay the correct CPF contributions for their employees on time. Failure to do so can result in financial penalties, additional charges, and even prosecution.
Late Payment Interest
An interest of 1.5% per month (minimum $5) is charged on overdue CPF contributions. This interest is calculated from the day after the due date until full payment is made.
Fines and Financial Penalties
Employers who fail to pay CPF contributions can be fined up to $5,000 per offence for first-time offenders. For repeat offences, fines can go up to $10,000 per offence. In addition, the court may order the employer to pay the outstanding CPF contributions plus interest.
Legal Action
Non-compliant employers may face prosecution under the CPF Act. Penalties can include fines, imprisonment (up to 6 months for first offence, 12 months for repeat offences), or both, depending on the severity of the breach.
Additional Consequences
Not paying CPF contributions can also have further consequences, like:
- Damage to the employer’s reputation may affect staff retention and hiring.
- Possible restrictions on government grants or schemes if CPF compliance is not maintained.
CPF FAQs – Singapore
➕ Q1: What is the minimum salary to qualify for CPF in Singapore?
The current official minimum salary to qualify for CPF in Singapore is S$50 per month. In other words, almost everyone making minimum wage is covered.
➕ Q2: What is the minimum salary required to make employee CPF contributions in Singapore?
Employers must start making CPF contributions once an employee earns at least S$50 per month. However, employee contributions only begin if the monthly wage is above S$500. Employees only need to contribute to their CPF if their salary exceeds this amount.
➕ Q3: Do self-employed people need to make CPF contributions in Singapore?
- MediSave contributions are compulsory if annual net trade income is above S$6,000.
- Contributions to the Ordinary Account (OA) and Special Account (SA) are voluntary for SEPs.
- SEPs can top up OA and SA for retirement savings and enjoy tax relief.
- The exact MediSave contribution depends on age and net trade income.
➕ Q4: Who is eligible for CPF in Singapore?
CPF is compulsory for all Singapore Citizens and Singapore Permanent Residents (SPRs). This includes people who are employed or self-employed, subject to income thresholds.
➕ Q5: When can I withdraw money from CPF in Singapore?
- Retirement withdrawals: Users can withdraw from the retirement account after they’re 55 years old.
- Medical withdrawals: Funds from the MediSave Account can be used for approved medical expenses, such as hospitalisation, selected outpatient treatments, day surgeries, and insurance premiums under MediShield Life or Integrated Shield Plans.
- Other notable cases:
- If a member is permanently incapacitated and unable to work.
- If a member is diagnosed with a serious illness.
- If a member is leaving Singapore permanently and giving up their citizenship or permanent residency.
- In the event of death, CPF savings are paid to the nominated beneficiaries or legal next-of-kin.
➕ Q6: Where do I register for CPF for my employees?
Employers can register for CPF contributions through the CPF Board’s official website or via CPF e-Submission services.
➕ Q7: Does the CPF contribution rate remain the same each year?
Not always. The government may adjust CPF contribution rates in response to policy changes, economic conditions, or other factors. While currently the CPF contribution rates are based on 2025 guidelines, new guidelines are planned for 2026.
➕ Q8: What’s the difference between an Ordinary Account and a Special Account?
Every employee with a CPF contribution gets an Ordinary Account and a Special Account. The Ordinary Account (OA) is for housing, education, investment, and retirement, giving flexibility to use your CPF for multiple purposes. The Special Account (SA) is mainly for long-term retirement savings and earns a higher interest rate, helping you grow funds specifically for retirement. Remember, you cannot withdraw from the Special Account until age 55.
Conclusion
Staying on top of CPF contribution rates is key for any employer in Singapore. If you’re unsure about your current compliance, using CPF tools and staying informed about the latest rates can help ensure your business avoids penalties. Always make sure that you are setting aside the proper funds regularly to avoid costly errors.
