The employer and employee Central Provident Fund (CPF) contribution rates for workers aged 55 to 70 will continue to increase by 0.5% to 1% from Jan 2024.
From January 2023, the employer and employee CPF contribution rates for employees in this age group will be raised by up to 1 percentage point each. This move was announced by Finance Minister Lawrence Wong in his Budget 2022 speech on 18 February.
The first increase was already implemented in 2023, and the government has provided employers with a one-year CPF Transition Offset equivalent to half of the increase in employer CPF contributions.
Singapore will continue with the next step of increase in 2023, and employers will be provided with a similar offset. This means that workers in that age group will see a total increase of 3 to 4 percentage points in their CPF contribution rates over these two years.
Employee's age (in years) | Current employee contribution rate | Current employer contribution rate | Employee contribution rate from 1st Jan 2023 | Employer contribution rate from 1st Jan 2023 |
55 and below | 20% | 17% | 20% | 17% |
Above 55 to 60 | 15% | 14.5% | 16% | 15% |
Above 60 to 65 | 9.5% | 11% | 10.5% | 11.5% |
Above 65 to 70 | 7% | 8.5% | 7.5% | 9% |
Above 70 | 5% | 7.5% | 5% | 7.5% |
Source: Annexe 2 of Budget 2022
The CPF contribution ceiling will also continue to increase in 2024, allowing for higher monthly CPF contributions for employees whose monthly earnings have exceeded the CPF OW ceiling or more monthly.
CPF OW Ceiling | CPF annual salary ceiling | |
From 1 Jan 2024 | $6,800 | $102,000 |
From 1 Jan 2025 | $7,400 | |
From 1 Jan 2026 | $8,000 |
Source: CPF website
Ordinary Wages (OW) generally refer to income that employees receive on a monthly recurring basis such as basic monthly salary and fixed allowances. Additional Wages (AW) generally refer to other non-recurring income such as bonuses.
The OW ceiling refers to the maximum OW earned each month that will be subject to CPF. The increase in OW ceiling will affect employees who are earning monthly wages of more than the prescribed CPF OW ceiling.
The annual salary ceiling remains unchanged at SGD102,000 per year. The annual salary ceiling refers to the maximum total OW and AW income that will be subject to CPF in a year.
The monthly retirement payouts provided by the Basic Retirement Sum (BRS) cover basic living expenses for CPF members. Members who want higher monthly payouts can set aside the Full Retirement Sum (FRS) or Enhanced Retirement Sum (ERS), which are currently set at two times the BRS and three times the BRS respectively.
The BRS will be raised by 3.5 percent per year for the next five cohorts turning 55 from 2023 to 2027. The BRS for those turning 55 this year is S$96,000 and will rise to S$99,400 next year and S$114,100 in 2027.
With the rising standards of living, the increase will provide members with higher monthly CPF payouts in their retirement years.
With the increase, those who set aside the BRS when they turn 55 in 2027 will receive payouts of close to $1,000 per month when they are 65. These payouts will continue for the rest of their lives and provide greater assurance for their basic retirement needs. The corresponding FRS and ERS payouts will rise in tandem.
| Year that Members Reach Age 55 | |||||
2022 (Previously announced) | 2023 | 2024 | 2025 | 2026 | 2027 | |
Estimated Monthly PayoutsProvided by Retirement Sums at Age 65^ | ||||||
BRS | $850 | $870 | $900 | $930 | $950 | $980 |
FRS | $1,570 | $1,620 | $1,670 | $1,730 | $1,780 | $1,840 |
ERS | $2,300 | $2,370 | $2,450 | $2,530 | $2,610 | $2,690 |
Retirement Sums at Age 55 | ||||||
BRS | $96,000 | $99,400 | $102,900 | $106,500 | $110,200 | $114,100 |
FRS | $192,000 | $198,800 | $205,800 | $213,000 | $220,400 | $228,200 |
ERS | $288,000 | $298,200 | $308,700 | $319,500 | $330,600 | $342,300 |
Source: Annexe 3 of Budget 2022
^Assumes male member under CPF LIFE Standard Plan, starting payouts at age 65. These are estimated payouts based on factors such as current mortality trends and interest rates.
There is no requirement for members to top up their CPF if they are unable to set aside their BRS.
Those who meet the eligibility criteria for the Silver Support Scheme, enhanced in 2021, will also receive additional retirement support from the Government of up to $900 a quarter.
From January 2023, the Workfare Income Supplement (WIS) Scheme will be enhanced to supplement the incomes and CPF savings of lower wage workers.
The scheme will be extended to younger workers aged 30 to 34. A minimum income criterion for WIS of S$500 per month will also be introduced to encourage part-timers and casual workers to take up regular, full-time work.
Annual workfare payouts will be increased:
This same maximum payout tier will be extended to all persons with disabilities, regardless of their age.
For more information, please refer to the official Budget Statement 2022.
In the Budget 2022 announcement on 18 February, Finance Minister Lawrence Wong announced that the minimum qualifying salary will be raised by S$500 for Employment Pass and S Pass applicants from September this year.
On 18 February, Finance Minister Mr. Lawrence Wong delivered the much-anticipated Budget 2022 speech. The Budget remains expansionary, with an estimated ministry spending of S$102.4 billion, marking a 4.1 percent increase from the total expenditure in the previous year.
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