The Central Provident Fund (CPF) is the backbone of Singapore's social security system, funding retirement, healthcare, and housing. For employers, CPF is a monthly obligation that must be calculated correctly and paid on time for every Singapore Citizen (SC) and Permanent Resident (PR) employee. Foreign employees on work passes are not covered by CPF.
Contribution Rates (Employees Aged 55 and Below)
For an SC/PR employee earning more than S$750 per month:
- Employer contribution: 17%
- Employee contribution: 20%
- Total: 37% of wages, subject to ceilings
Rates taper for employees aged 55 and above, and there are graduated rates for lower monthly wages (between S$500 and S$750). PRs pay reduced 'graduated' rates in their first two years.
The Wage Ceilings
CPF is capped by:
- The Ordinary Wage (OW) ceiling — S$7,400 per month from 1 January 2025 (rising in steps under the announced schedule)
- The Additional Wage (AW) ceiling, which limits CPF on bonuses and other non-monthly wages
Wages above these ceilings do not attract CPF, but calculating the AW ceiling correctly at year-end is a frequent source of error.
The Three CPF Accounts
Contributions are allocated across:
- Ordinary Account (OA): housing, insurance, investment, education
- Special Account (SA): retirement savings
- MediSave Account (MA): healthcare and approved medical insurance
Submission Deadline and Penalties
CPF must be paid by the 14th of the following month (the last day of the month is the grace deadline). Late payment attracts interest at 1.5% per month (minimum S$5), and persistent default can lead to enforcement action against directors.
Skills Development Levy (SDL)
Separately, employers pay SDL on all employees (local and foreign) at 0.25% of monthly wages, subject to a minimum of S$2 and a maximum of S$11.25 per employee. SDL funds national workforce training.
What Counts as Wages
CPF applies to most cash components — basic pay, overtime, commissions, bonuses, and cash allowances. Reimbursements of genuine business expenses and certain benefits-in-kind are excluded. Misclassifying allowances as non-CPF-able is a common audit finding.
Common Mistakes
- Not contributing CPF on bonuses and commissions
- Applying the wrong PR rate table in the first two years
- Missing CPF for an employee's first partial month
- Miscomputing the Additional Wage ceiling at year-end
How Gateway of Asia Helps
We run your monthly payroll end-to-end: correct CPF and SDL computation, e-submission by the deadline, itemised payslips, and year-end IR8A/AIS reporting — keeping you fully compliant with MOM, CPF Board, and IRAS.