- Employment Pass Eligibility: Educational Qualifications Is Required By September 2023
- Comprehensive Guide To Hawkers Development Programme In Singapore
- New Update: What You Need to Know About the Senior Worker Support Package 2023: Up to S$125,000 Grants for Companies
- Comprehensive Guide To Temporary Fair Permit In Singapore
- Comprehensive Company Guide: CPF Contribution for Employees
- New Update: What You Need to Know About the Senior Worker Support Package 2023: Up to S$250,000 Grants for Companies
- Employing Workers with Special Needs in Singapore - What Other Grants Support Is There? [Updated]
- Simplifying the Process: How Tender Lite is Making it Easier for SMEs to Win Government Contracts
- How To Decide When To Refinance Or Reprice For Your Loans
- Singapore's First Career Conversion Programme For FinTech Talents
Comprehensive Company Guide: CPF Contribution for Employees

The article was published on 31 Jan 2023 and was most recently updated on 13 March 2023
Understanding CPF
The main purpose of CPF - which is administered by the Social Security System - is to ensure that Singaporean citizens have enough money for retirement. To achieve this goal, CPF plays three roles:
1) Retirement savings: CPF contributions are primarily meant to provide financial security for members in old age.
2) Housing: CPF funds can be used to purchase a home or pay for housing-related expenses.; and
3) Healthcare: CPF funds can also be used to pay for medical expenses in old age.
Why Do You Need It?
For employees, the rationale behind having CPF deductions taken out of their salaries is simple: If everyone had to make his/her own way in life, many would end up spending all their money and then find themselves in trouble when the time comes to pay for their retirement and medical expenses. Thus, CPF is seen as helping to prevent this scenario from happening.
CPF Contributions Entitlement
CPF contributions are mandatory for all full-time permanent, part-time permanent, casual, and temporary employees who are: - Singapore Citizens or Permanent Residents - Earning more than S$50 per month - Engaged under a contract for service. This includes those working at companies with subsidiaries in Singapore.
For trainees under SGUnited Trainesship Programme, CPF contribution is not payable as it is deemed not an employer-employee relationship.
Latest Business News: Senior Employees CPF Contributions For 2023
Starting on January 1, 2023, the overall CPF contribution for workers aged 55 to 60 would rise from the current 28% to 29.5%, a 1.5% increase. The increase will be split equally between the employer and the employee, with the employer contributing 0.5% and the employee contributing 1%.
Furthermore, the total CPF contribution for employees aged 60 to 65 would increase by 2%, from the current 18.5% to 20.5% in the same way. The increase will be split equally between the employer and the employee, with the employer contributing 1% and the employee contributing 1%.
The total CPF contribution for employees aged 65 to 70 will rise from the current 14% to 15.5%, a 1.5% increase. The increase will be split equally between the employer and the employee, with the employer contributing 0.5% and the employee contributing 1%.
Employers/Employees' CPF Contributions Starting 2023 (Contribution Rate Table)
Did you know that up to 20% of each employee's monthly wage in Singapore is put into their CPF accounts? Depending on the employee's age, this will change. The maximum salary for which CPF payments are required is also the first $6,000 of their monthly pay.
The employee's CPF contributions vary based on whether they earn, but the employer's CPF payments remain constant.
For better understanding, below table shows the changes of CPF contribution rates by both Employer and Employee in summary:
Age Range | 2016-2021 | From 1 Jan 2022 | From 1 Jan 2023 | From 1 Jan 2024 | By ~2030 |
≤55 | 37.0% | No Change | |||
>55 – 60 | 26.0% | 28.5% | 29.5% | 31.0% | 37.0% |
>60 – 65 | 16.5% | 18.5% | 20.5% | 22% | 26.0% |
>65 – 70 | 12.5% | 14.0% | 15.5% | 16% | 16.5% |
>70 | 12.5% | No Change |
Types of CPF Contributions
Two types of CPF Contributions are there for any Singapore citizens; Employer CPF contributions made to the employee's CPF account are often taxable when they are voluntary. On the other hand, compulsory CPF contributions are typically tax-free.
1). Compulsory CPF Contributions
The CPF Act sets out the mandatory contributions that employers must pay on their employees' ordinary and additional wages for citizens and permanent residents.
You don't need to pay any taxes for compulsory contributions.
2). Voluntary CPF Contributions
Additionally, employers may voluntarily contribute CPF funds to a worker's CPF account.
According to IRAS, employers' voluntary CPF contribution made in connection with employment is taxable. If there are excess voluntary CPF contribution made by an employee in the current year, then the employee must be provided with Form IR8S and the form must be submitted to the relevant authority.
If an employee submits a completed Form IR8S to IRS, then IRS will review the form and determine whether any additional tax was withheld from the employee's paycheck. Following that, IRAS will analyze the employee's evaluation appropriately.
For Singapore Permanent Residents (SPRs)
Life circumstances can occasionally modify your employee's SPR status.
If an employee gives up their SPR status, CPF contributions are due for the time that they were SPRs. From the day they are recognized as a foreigner, you can stop making CPF contributions.
In the same way, up to the day your Singapore PR employee becomes a Singapore citizen, the SPR contribution rates are in effect. Rates for CPF contributions will be in effect as soon as they become Singapore citizens.
The first two years of CPF contribution after achieving SPR status are at a progressive rate for both employer and employee to help with the transition as there can be a significant difference in take-home income for the employee. As an SPR, the full CPF contribution rates will be applicable starting in the third year.
The first year rate will specifically start to apply on the day your employee becomes an SPR. The month after the anniversary of his SPR conversion will see the implementation of the second and third year rates.
Depending on when Additional Wages (AW) are paid, employers may need to prorate the Ordinary Wages (OW) and apply the relevant Additional Wages (AW) contribution rates for these new citizens.
For 1st and 2nd Year SPRs, you can calculate CPF contributions for free here.
Key Terms To Know
Ordinary Wage (OW)
Ordinary Wages (OW) include any allowance (basic wage) that an employer pays to individual employee during that particular period, including food stipends and overtime wages. Before paying CPF contributions for that period, OW must be paid out in prior to contribution month.
Please note that the ordinary wage does not include the following:
- Overtime payments
- Leave pay
- Food allowance
- Other special payments
Additional Wage (AW)
In addition, there is another type of remuneration called additional wage (AW). An example of an additional wage could be the salary increase or bonus offered to employees based on performance evaluation. In general, the additional wage is the difference between the ordinary wage and the CPF contribution limit.
Do you feel like you still need to compute the amount of Additional Wage Ceilings to determine payable CPF for the year? To calculate, click here.
Amount of OW and AW Subject to CPF Contributions
Period | OW Ceiling | AW Ceiling |
1 Jan 2016 and onwards | $6,000 per month |
$102,000 less than Total Ordinary Wages subject to CPF for the year (*17 months x $6,000) |
Frequently Asked Questions
When do I have to pay my CPF contribution?
You must pay your employee's CPF contributions no later than the 15th day of each month. This includes the following months: February, April, June, August, October, December, January, July, September, November and May.
What happens if I'm late for CPF payment?
Employers may be charged late payment fees if they don't make the necessary CPF contributions for their workers by the deadline. A late payment penalty of 1% per month, compounded monthly, up to a maximum of 12% per year, may be assessed by the CPF Board on the late sum. From the deadline until the contributions are paid, the late payment cost is computed.
Can I contribute the full CPF rates for my Singapore PR employee during the first two year?
Both the employer and the employee may contribute CPF at the full rate during the first two years if an adjustment period is not required. There are two ways to do this:
Both the employer and the employee make full contributions, or the employer makes a complete contribution while the employee makes progressive contributions.
These higher rates call for a combined application with the SPR employee and may take effect as early as the day of the employee's conversion to SPR.