The Central Provident Fund (CPF) is a compulsory savings plan introduced by the Singapore government in 1955. It is designed to help Singapore Citizens and Permanent Residents set aside funds for retirement, housing, and healthcare.
If you run a business in Singapore, both you and your employees are legally required to make monthly CPF contributions based on the wages.
In this guide, we will walk you through the essentials of Singapore CPF contribution, including CPF contribution rates, how to calculate CPF contributions (for both monthly salary and bonus), and the key updates from the new Singapore budget.
CPF contribution rates from January 1, 2026
The rates depend on the employee's age and wage level. These are the rates in force since January 1, 2026, for employees earning more than SGD 750 per month:
| Age group | Employer contribution | Employee contribution | Total |
|---|---|---|---|
| 55 and below | 17% | 20% | 37% |
| Above 55 to 60 | 16% | 18% | 34% |
| Above 60 to 65 | 12.5% | 12.5% | 25% |
| Above 65 to 70 | 9% | 7.5% | 16.5% |
| Above 70 | 7.5% | 5% | 12.5% |
The January 2026 adjustment raised the rates for the two bands between 55 and 65, continuing the multi-year plan to bring senior workers' rates closer to those of younger employees. Rates for the other age groups did not change.
Two groups follow different schedules. Employees earning between SGD 500 and 750 contribute at phased-in rates, while the employer's share stays at the full rate. And Permanent Residents in their first or second year of PR status contribute at graduated rates before moving to the full rates from the third year.
CPF salary ceilings in 2026
CPF contributions are not calculated on unlimited wages. Here are the current monthly and annual CPF contribution ceilings:
- Monthly salary ceiling: SGD 8,000 since January 1, 2026. Only the first SGD 8,000 of monthly Ordinary Wages attracts CPF. This was the final step of the phased increase that started in 2023, when the ceiling stood at SGD 6,000.
- Annual salary ceiling: SGD 102,000. This caps the total Ordinary and Additional Wages that attract CPF in a year.
The higher ceiling raises the cost of well-paid staff. If an employee earns SGD 8,000 or more, CPF now applies to SGD 600 more of their salary than in 2025. For an employee aged 55 or below, that adds SGD 102 to the employer's monthly contribution.
How to Calculate CPF Contributions
To calculate the CPF contributions in Singapore, follow these steps:
- Determine the Total Wages: Total Wages include Ordinary Wages (OW) and Additional Wages (AW). Ordinary Wages are the basic salary, while Additional Wages include bonuses, allowances, and other payments
- Apply the Contribution Rates: Use the CPF contribution rates applicable to the employee's age group and wage level. The rates can be found on the CPF Board's website or using the CPF Contribution Calculator
- Calculate the Contributions: Multiply the Total Wages by the applicable contribution rates to determine the employer's and employee's share of the CPF contributions
For example, if an employee aged 35 is earning a monthly salary of SGD 5,000, his CPF contribution would be as follows:
- Employer's contribution: 17% of SGD 5,000 = SGD 850
- Employee's contribution: 20% of SGD 5,000 = SGD 1,000
- Total CPF contribution: SGD 850 (employer) + SGD 1,000 (employee) = SGD 1,850
The employee's take-home pay is SGD 4,000, and the true cost of employment to you as the employer is SGD 5,850.
CPF Contributions on Bonuses and Other Additional Wages
CPF contribution for bonuses or any additional wages (such as commissions) follows the Additional Wage Ceiling rules. Currently, the Additional Wage Ceiling is set at (SGD 102,000 – Ordinary Wages subject to CPF for the year).
If your employee’s additional wages (e.g., year-end bonus) do not exceed the Additional Wage Ceiling, the same CPF contribution rates apply to that bonus portion.
CPF contributions for bonuses are calculated as follows:
- Determine Total Annual Wages: Sum the employee's ordinary wage (OW) for the year and the bonus amount.
- Check Against Annual Salary Ceiling: Ensure the total does not exceed the annual salary ceiling of $102,000.
- Calculate CPF on Bonus: If the total annual wages are within the ceiling, apply the standard CPF contribution rates to the bonus amount.
For instance, if an employee aged 45 receives a $10,000 bonus:
- Total Annual Wages: $72,000 (annual OW) + $10,000 (bonus) = $82,000
- Employer Contribution on Bonus: 17% of $10,000 = $1,700
- Employee Contribution on Bonus: 20% of $10,000 = $2,000
- Total CPF Contribution on Bonus: $1,700 (employer) + $2,000 (employee) = $3,700
CPF changes from January 1, 2027
Budget 2026 confirmed the next step for senior workers, applying to wages earned from January 1, 2027:
| Age group | Employer | Employee | Total | Change |
|---|---|---|---|---|
| Above 55 to 60 | 16.5% | 19% | 35.5% | +1.5 points |
| Above 60 to 65 | 13% | 13% | 26% | +1.0 point |
The increase is allocated in full to the employee's Retirement Account, up to their Full Retirement Sum. With this step, the above-60-to-65 band reaches its long-term target rate of 26%.
The government will cover part of this increase. Under the CPF Transition Offset, employers receive back half of the 2027 rise in their contributions for every affected Singaporean and PR employee. You still carry the other half, so if you employ staff aged above 55, factor the new rates into your 2027 payroll budget.
Running Singapore Payroll with Emerhub
CPF is the largest of the statutory obligations in a Singapore payroll, but not the only one: the Skills Development Levy, contributions to self-help group funds, and the annual IR8A reporting all run alongside it, and the rates and ceilings change on a schedule you have to track.
Emerhub's accounting and payroll service in Singapore handles the full payroll cycle. This covers monthly payroll with the correct CPF computation for every age band, the statutory filings, and the rate changes applied when they take effect.
Talk to our Singapore team about your headcount, and we will take payroll off your plate.
Frequently asked questions
Do I need to pay CPF for a foreign employee holding an Employment Pass?
No. CPF contributions are mandatory only for Singapore Citizens and Permanent Residents. Foreign employees on work passes (e.g., Employment Pass, S Pass, Work Permit) are exempt from CPF contributions.
How does CPF contribution for bonus differ from monthly salary?
The rates are the same, but bonuses count as Additional Wages and are capped by the Additional Wage ceiling: SGD 102,000 minus the year's CPF-attracting Ordinary Wages. Salary is capped at SGD 8,000 per month instead.
What happens if I pay CPF contributions late?
If CPF contributions are not paid on time, the following penalties may apply: The CPF Board may also obtain a court order to recover any outstanding contributions and late payment interest.
What is the CPF salary ceiling in 2026?
The monthly Ordinary Wage ceiling is SGD 8,000 since January 1, 2026, and the annual ceiling is SGD 102,000. Only wages within these ceilings attract CPF contributions.