What is Singapore's Central Provident Fund (CPF)?

The contribution rate varies depending on the age, the wage band and the status of the employee (i.e. Singaporean citizen or Permanent Resident). The maximum amount of CPF contribution payable is currently based on a monthly salary ceiling of $6,000. Voluntary contributions can be paid in addition to the mandatory contributions.

From 2023 to 2026, the CPF monthly salary ceiling will be progressively raised to $8,000. The changes will be implemented in four gradual steps, which gives both employers and employees time to adjust to the new regulations. The CPF annual salary ceiling of $102,000 remains unchanged.

The employee’s share of CPF contribution is deducted from their salary by the employer during the monthly payroll processing. The employer is then required to pay the employer’s and employee’s share of CPF contributions monthly for all employees (Singapore citizens and Singapore PRs) at the rates set out in the CPF Act. The contributions payable should be based on the employee’s actual wages earned for the month.

CPF contributions are not allowed for:

• Foreigners working in Singapore under an EP, S Pass or a Work Permit; and
• Directors’ fees

How is the Central Provident Fund contribution calculated?

For the purpose of CPF, wages are classified into 2 categories.

Ordinary Wages

Ordinary Wages (OW) refers to the basic salary earned in the month. The CPF contribution on OW is currently capped at $6,000 a month.

Additional Wages

Additional Wages (AW) refers to bonuses and other variable components earned. The CPF contribution on AW is capped based on the following computation:

AW subject to CPF = Total Wages – OW subject to CPF

Total wages are capped at $6,000 x 17 months = $102,000 a year

For example, an employee earning $8,000 a month with an annual bonus of $50,000 will contribute CPF based on the following capping:

OW: CPF will be contributed based on the cap of $6,000 on a monthly basis.

AW: AW subject to CPF =$102,000* – OW subject to CPF for the year

                                         = $102,000 – ($6,000 x 12 months)

                                         = $ 30,000 

AW CPF will be contributed based on the cap of $30,000.

*Equivalent to 17 months x $6,000

Employment Act to cover all employees

Core provisions of the Employment Act were updated effective 1^st April 2019 to cover all employees. Prior to this, Managers and Executives earning up to $4,500 were excluded from these core provisions. With this change, all employees are now entitled to paid annual leave, paid public holidays and sick leave.

Overtime rates for non-workmen

Non-workmen earning up to $2,600 are entitled to overtime pay and are covered under Part IV provisions of the Employment Act. This section of the Act provides for hours of work, rest day and overtime payments to eligible employees. 

Managers and executives continue to be excluded from Part IV provisions. 

CPF Treatment of employee benefits

Effective 1st January 2020, the CPF treatment for the reimbursement of employee benefits have been revised as follows:

1. Reimbursements for medical and dental benefits (incurred for both local and overseas) for employees, employee’s spouse and children are not CPF contributable.
2. Reimbursements for holiday benefits for employees, employee’s spouse and children are CPF contributable.

These changes will align the CPF treatment for benefits provided to employees and their dependents.

*Indicates change effective 1st January 2020

Employee benefits paid as cash allowances continue to be CPF contributable.

Increase in CPF Contribution Rates from 1 January 2022

The CPF monthly salary ceiling will be raised in stages to $8,000 by 2026 to keep pace with rising salaries and help Singaporeans save more for their retirement.

Employees who are earning above $6,000 will benefit from this change.

A summary of the revised contribution rates from September 2023:

Click here to download the Doing Business in Singapore 2023 guide

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