What is CPF (Central Provident Fund)?
Singapore's mandatory social security savings scheme for Singapore Citizens and Permanent Residents. Employer contributes 17% and employee contributes 20% for those aged 55 and below, based on ordinary wages up to S$7,400 per month.
Current Rate (Year of Assessment (preceding-year basis))
Employer 17% + Employee 20% (ages 55 and below)
Example
An SC employee earning S$5,000 gross per month will have S$1,000 (20%) deducted from their salary and their employer will contribute an additional S$850 (17%), giving total CPF contributions of S$1,850 per month.
How CPF (Central Provident Fund) works in Singapore
**Central Provident Fund (CPF) Overview**
CPF is a compulsory savings scheme for Singapore Citizens (SC) and Permanent Residents (PR). It is NOT applicable to foreign employees, including Employment Pass (EP), S Pass, and Work Permit holders. Employers of foreigners pay the Skills Development Levy (SDL) only.
**Contribution Rates (2024 onwards)**
For employees aged 55 and below: Employer 17%, Employee 20% (total 37%). For employees aged 55 to 60: Employer 15%, Employee 16% (total 31%). For employees aged 60 to 65: Employer 11.5%, Employee 10.5% (total 22%). For employees aged 65 to 70: Employer 9%, Employee 7.5% (total 16.5%). For employees above 70: Employer 7.5%, Employee 5% (total 12.5%).
Contribution rates for new PRs are reduced for the first two years to ease the transition from a non-CPF background.
**Wage Ceilings**
The Ordinary Wage (OW) ceiling is S$7,400 per month (as of 2024, increased from S$6,800; will increase to S$8,000 by 2026 per the staged increase plan). CPF contributions are calculated on ordinary wages up to this ceiling. The Annual Wage Supplement (AWS, or 13th month bonus) and other Additional Wages (AW) are also subject to CPF, capped at S$102,000 per year minus the total ordinary wages on which CPF was already contributed.
**CPF Accounts**
Contributions are allocated across three or four accounts depending on age: Ordinary Account (OA, for housing, education, investment), Special Account (SA, for retirement), MediSave Account (MA, for healthcare), and Retirement Account (RA, created at age 55 by combining OA and SA savings). The OA currently earns 2.5% p.a. and the SA earns 4% p.a.
**Employer Obligations**
Employers must pay both their own and employees' CPF contributions by the 14th of the following month. Late payment attracts interest at 1.5% per month. Employers submit contributions via CPF EZPay or the CPF Board's online portal. A monthly CPF submission is required whenever a covered employee is on payroll.
**No CPF for Foreigners**
This is the most commonly misunderstood aspect of Singapore payroll. EP, S Pass, and Work Permit holders are entirely exempt from CPF. Employers simply pay gross salary without any CPF deduction or employer top-up for foreign staff. The only mandatory levy for foreigners is the Skills Development Levy (SDL) and, for lower-wage foreign workers, the Foreign Worker Levy (FWL).
Related terms
A mandatory levy of 0.25% of each employee's gross monthly wages, payable by all Singapore employers for all employees including foreigners. Minimum S$2 and maximum S$11.25 per employee per month. Collected via the CPF Board.
Singapore residents pay progressive income tax from 0% to 24% (above S$1 million). Non-residents pay flat 24% or 15% on employment income, whichever is higher. Filing deadline: 18 April (e-filing) each year.
Tax withheld by Singapore companies on certain payments to non-resident companies or individuals. Key rates: royalties 10%, interest 15%, technical service fees 17%. No withholding tax on dividends paid by Singapore companies.
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