What are Central Provident Fund (CPF) contributions?

Central Provident Fund (CPF) contributions are mandatory savings in Singapore, where both employees and employers contribute to a government-managed scheme.

These employment contributions are calculated as a percentage of monthly wages and vary by age.

Employers require a CPF Submission Number (CSN) to process contributions, while employees are identified by their National Registration Identity Card (NRIC) number.

CPF contributions are governed by Singapore’s CPF Act.

What is the purpose of CPF contributions?

CPF is a key pillar of Singapore’s social security system. It helps individuals save for retirement while covering financial needs like medical expenses and housing.

As a multi-purpose savings scheme, contributions are allocated to various CPF accounts:

• Ordinary Account (OA): Used for housing, insurance, education, and investment
• Special Account (SA): Reserved for retirement and investment in retirement-related financial products
• MediSave Account (MA): Allocated for healthcare needs, such as paying for medical treatments and insurance premiums

At age 55, a retirement account (RA) replaces the SA account to provide monthly payouts during retirement.

Who is required to make CPF contributions?

CPF contributions are mandatory for:

• Employees who are Singapore citizens or Singapore Permanent Residents (SPRs)
• Employers hiring Singapore citizens or PRs

Employees contribute a percentage of their wages, while employers add an additional percentage.

CPF contributions for contractors and part-time employees

Employees on contracts or working part-time generally must contribute to CPF unless specific exemptions apply. However, self-employed individuals under a contract for service are not required to contribute.

To avoid misclassifications and ensure compliance with CPF regulations, use global payroll and HR experts like Deel to hire employees and engage contractors in Singapore.

CPF contributions for foreign workers

Foreign workers on employment passes or work permits do not contribute to CPF. This supports Singapore’s pro-global hiring approach, making it easy for companies to hire international talent.

CPF contributions for Singapore Permanent Residents (SPRs)

New SPR employees contribute at lower graduated rates for the first two years. Full CPF rates apply from the third year onward.

Here’s how to determine the year of SPR status:

• Year 1: Starts on the day SPR status is granted
• Year 2: Begins the month after the first anniversary of SPR conversion
• Year 3: Begins the month after the second anniversary of SPR conversion

However, an employer and employee can jointly apply to the CPF Board to contribute at higher rates. The options are:

• The employer contributes at full rates while the employee continues at graduated rates
• Both employer and employee contribute at full rates

Learn more: Moving to Singapore: A Guide for Expats and Digital Nomads

How are CPF contribution rates determined?

Singapore has tiered CPF contribution rates. The government periodically reviews these rates to ensure their adequacy for retirement and healthcare needs. As of 2025, these rates apply:

Note:

• CPF contribution rates represent a percentage of the employee's wages
• Both employers and employees do not need to contribute for monthly wages of SGD 50 or below
• Employers must contribute for wages between SGD 50 and SGD 500, but employees are exempt
• Employees’ CPF contributions gradually increase for wages above SGD 500, reaching full rates at SGD 750, while employer CPF contributions remain fixed

We recommend viewing this page for comprehensive CPF contribution rate tables, including the rates for SPRs in their first and second years.

What is the CPF wage ceiling?

Ordinary wage (OW) ceiling

Ordinary wages are salaries paid monthly, such as allowances and overtime payments.

Effective from 1 January 2025, the CPF monthly salary ceiling is SGD 7,400. This ceiling is set to increase to SGD 8,000 by 2026.

Additional wage (AW) ceiling

Additional wages are payments not tied to a specific month, such as annual bonuses.

The AW ceiling is calculated on a per calendar year basis as:

AW Ceiling = SGD 102,000 – Total OW subject to CPF for the year

This ensures that the total wages (OW + AW) subject to contributions do not exceed the CPF annual salary ceiling of SGD 102,000.

Learn more: Employer of Record Singapore: Retain Foreign Talent Under MOM Regulation

How do employers submit and pay CPF contributions?

Employers can submit CPF contributions electronically through:

• CPF EZPay: A government digital service for online CPF submissions
• CPF EZPay Mobile: A CPF mobile app designed for employers, especially those with ten or fewer employees
• One-Stop Payroll: An integrated solution that allows businesses to submit employment data directly to the CPF Board, Inland Revenue Authority of Singapore (IRAS), and Ministry of Manpower (MOM) through their payroll software

Accepted payment methods include Direct Debit and PayNow QR.

How do CPF contributions affect payroll?

Employee contribution:

• Up to 20% of wages go to CPF, reducing take-home pay
• Employees get CPF relief for compulsory contributions, which lowers their taxable income
• If an employee voluntarily contributes extra CPF, they may get tax relief, but only up to a personal income tax relief cap of SGD 80,000 (which includes all tax reliefs combined)

Employer contribution:

• Employers’ share of CPF contributions increase payroll costs
• Compulsory employer contributions do not affect employees’ taxable income
• If an employer voluntarily contributes extra CPF, this counts as taxable income for the employee.

What happens if an employer fails to make CPF contributions?

CPF contributions are due by the 14th of the following month. Late payments can attract:

• A 1.5% monthly interest with a minimum charge of SGD 5 per month. Interest starts accruing the month after the due date
• A fine between SGD 1,000 and SGD 5,000 per offense, up to 6 months in jail, or both
• For repeat offenders, a fine between SGD 2,000 and SGD 10,000 per offense, up to 12 months in jail, or both
• A fine of up to SGD 10,000, up to 7 years in jail, or both for deducting an employee’s CPF contributions but failing to pay them to the CPF Board

How can you optimize CPF contributions for employee retention?

Optimizing CPF contributions demonstrates a commitment to employees’ long-term financial security. As an employer, you can optimize contributions through:

• Voluntary contributions (VC): Add to an employee’s overall CPF savings (OA, SA, and MA). However, total CPF contributions (mandatory + voluntary) cannot exceed SGD 37,740 per year
• Additional MediSave Contribution Scheme (AMCS): Contribute up to SGD 2,730 per year directly to an employee’s MA savings for healthcare needs. These contributions are tax-free for employees and not subject to the CPF Annual Limit
• Retirement savings top-ups: Make cash top-ups to an employee’s SA or RA account to boost retirement savings. Employers get tax deductions, while employees receive tax relief of up to SGD 8,000 per year.

You can visit this page for more information on voluntary employer CPF contributions.

Learn more: Singapore’s Policy Shift to Flexibility: What Businesses Need to Know

How can you simplify CPF compliance and payroll management in Singapore?

Managing CPF contributions requires accurate calculations, timely submissions, and strict recordkeeping. On top of that, you must keep up with CPF policy changes and payroll regulations.

Deel streamlines the entire process, allowing you to hire, manage, and run compliant payroll on a single platform.

With Deel Global Payroll, you get accurate CPF calculations, automated filings, and local expertise through a dedicated POC in Singapore.

For companies without a local entity, Deel EOR makes it easy to employ full-time workers in Singapore without setting up a business.

Request a demo to get a closer look at how Deel simplifies global hiring and payroll.