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.
Both employers and employees are legally required to make monthly CPF contributions based on the employee’s 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 Effective from January 1, 2025
CPF contribution rates in Singapore vary based on the employee’s age, wage level, and residency status.
Below is a summary of the rates effective from January 1, 2025:
| Age Group | Employer Contribution | Employee Contribution | Total Contribution |
| 55 and below | 17% | 20% | 37% |
| Above 55 to 60 | 15.5% | 17% | 32.5% |
| Above 60 to 65 | 12% | 11.5% | 23.5% |
| Above 65 to 70 | 9% | 7.5% | 16.5% |
| Above 70 | 7.5% | 5% | 12.5% |
Note: The above rates apply to employees earning more than $750 monthly. For those earning between $500 and $750, employee contribution rates are gradually phased in while employer contribution rates remain the same.
Moreover, If you have employees who are Permanent Residents in their first or second year of PR status, they may have different transition rates for CPF contributions.
Failure to comply with the CPF contribution rate or missing deadlines can lead to penalties and legal complications. Thus, staying updated on the correct employer CPF contribution and employee CPF contribution percentages is non-negotiable.
CPF Contribution Ceilings
To ensure that CPF contributions remain equitable, the following ceilings are in place:
- Monthly Salary Ceiling: As of January 1, 2025, the CPF monthly salary ceiling is set at $7,400. This means that only the first $7,400 of an employee’s monthly wages are subject to CPF contributions.
- Annual Salary Ceiling: The annual salary ceiling remains at $102,000, capping the total amount of Ordinary Wages and Additional Wages that attract CPF contributions each year.
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
CPF Contributions for Bonuses
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
Upcoming CPF Changes from January 1, 2026
Singapore Government continues to adjust CPF contribution rates, particularly for older workers, to enhance retirement adequacy.
Prime Minister Lawrence Wong announced the following updates in his 2025 Budget statement on Feb 18, highlighting that these changes aim to eventually align senior workers’ CPF rates with those of younger employees.
1. Increased Rates for Employees Aged Above 55 to 60
From Jan 1, 2026, the Employer CPF contribution rate will rise by 0.5% to 16% (for those earning above SGD 750 per month). On the other hand, the Employee CPF contribution rate will go up by 1 percentage point to 18%.
These incremental increases mean the total CPF contribution rate for workers in this age bracket moves closer to the target of 37%, eventually matching the contribution rate for younger workers (aged 55 and below).
2. Adjusted Rates for Employees Aged Above 60 to 65
The employer CPF contribution rate will increase by 0.5% to 12.5% while the employee CPF contribution rate will rise by 1% to 12.5%.
This brings the total contribution rate for those aged above 60 to 65 closer to the long-term goal of 26%, helping them build up more robust retirement savings.
FAQs about CPF Contributions in Singapore
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.
While the same CPF contribution rate generally applies, bonuses and other additional wages are capped by the Additional Wage Ceiling. The CPF Board only calculates contributions on your total additional wages up to the ceiling of SGD 102,000.
If CPF contributions are not paid on time, the following penalties may apply:
- Late payment interest – Charged at 1.5% per month (minimum $5), starting the day after the due date.
- Composition amount – Up to $1,000 per offence. This lets employers settle the case out of court, provided all outstanding contributions and interest are paid.
- Court action – If payment is still not made, CPF Board may prosecute. Penalties include fines between $1,000 and $5,000 and/or up to 6 months’ imprisonment for the first offence. Repeat offences carry higher fines (up to $10,000) and longer jail terms (up to 12 months).
The CPF Board may also obtain a court order to recover any outstanding contributions and late payment interest.
