Singapore’s Central Provident Fund (CPF) is a compulsory social savings scheme designed to support Singapore Citizens and Permanent Residents in retirement, housing, and healthcare needs. With joint contributions from employers and employees, CPF ensures financial security across key life stages.
As of 2025, the CPF contribution system continues to operate on a tiered structure based on age and residency status, with upcoming enhancements aimed at increasing retirement adequacy—particularly for older workers—while remaining affordable for employers. Key policy shifts will also come into effect from January 1, 2026, including an increased wage ceiling and contribution rates for seniors.
Table of Contents
What Are CPF Contributions?
CPF contributions are split into two wage components:
- Ordinary Wages (OW) – Monthly fixed salary (capped at $7,400 in 2025)
- Additional Wages (AW) – Variable income like bonuses (subject to an annual cap)
These contributions are divided between employers and employees, with percentage rates determined by age and residency. CPF savings are allocated across different accounts:
- Ordinary Account (OA) – For housing, education, and insurance
- Special Account (SA)/Retirement Account (RA) – For retirement savings
- MediSave Account (MA) – For healthcare needs
CPF plays a crucial role in Singapore’s long-term wealth-building and social protection strategy.
Overview Table
| Component | Details |
|---|---|
| Monthly OW Ceiling (2025) | $7,400 |
| Annual AW Ceiling | $102,000 (inclusive of OW) |
| CPF Annual Contribution Limit | $37,740 |
| Eligibility | Singapore Citizens & SPRs (3rd year onwards) |
| 2026 OW Ceiling (New) | $8,000 |
| Key 2026 Change | Higher CPF rates for workers aged 55–65 |
| Official Website | cpf.gov.sg |
CPF Contribution Rates for Singapore Citizens and SPRs (3rd Year Onwards)
For Singaporeans and SPRs from their third year of permanent residency, CPF contributions are calculated based on fixed age-based percentages.
2025 CPF Rates for Monthly Wages Above $750
| Age Group | Total Rate | Employer’s Share | Employee’s Share |
|---|---|---|---|
| ≤ 55 | 37% | 17% | 20% |
| > 55 to 60 | 32.5% | 15.5% | 17% |
| > 60 to 65 | 23.5% | 12% | 11.5% |
| > 65 to 70 | 16.5% | 9% | 7.5% |
| > 70 | 12.5% | 7.5% | 5% |
This graduated structure encourages retirement savings while accounting for varying income and expenditure needs by age.
CPF Contribution Rates for New SPRs (First 2 Years)
New Singapore Permanent Residents contribute at lower CPF rates during their initial two years to ease the financial transition.
1st Year Rates
| Age Group | Total Rate | Employer’s Share | Employee’s Share |
|---|---|---|---|
| ≤ 55 | 4% | 4% | 0% |
| > 55 to 60 | 4% | 4% | 0% |
| > 60 to 65 | 3.5% | 3.5% | 0% |
2nd Year Rates
| Age Group | Total Rate | Employer’s Share | Employee’s Share |
|---|---|---|---|
| ≤ 55 | 9% | 4% | 5% |
| > 55 to 60 | 6% | 2.5% | 3.5% |
| > 60 to 65 | 3.5% | 2% | 1.5% |
Note: Employers can voluntarily apply for full CPF contributions via a joint declaration to accelerate retirement savings for employees.
CPF Contribution Ceilings and Annual Limits
Singapore has implemented contribution caps to ensure equity and financial sustainability in CPF participation.
- Ordinary Wage Ceiling (2025): $7,400/month
- Additional Wage Ceiling: $102,000/year (inclusive of OW)
- CPF Annual Limit: $37,740
CPF Rounding Rules
- Amounts ending below $0.50 are rounded down
- Amounts of $0.50 and above are rounded up
How CPF Contributions Are Calculated
Here’s how monthly CPF contributions are computed:
- Add Wages: OW + AW
- Determine CPF Rates: Based on age and residency
- Apply Contribution Percentages
- Round to Nearest Dollar per CPF rules
Example:
For a 40-year-old earning $3,000 in OW:
- Total CPF Contribution: 37% of $3,000 = $1,110
- Employee’s Share (20%): $600
- Employer’s Share (17%): $510
Major CPF Changes Effective from January 1, 2026
1. CPF Ordinary Wage Ceiling Will Increase
To match wage growth trends, the CPF Ordinary Wage ceiling will be raised from $7,400 to $8,000/month.
| Period | OW Ceiling | Increase |
|---|---|---|
| Before Sep 2023 | $6,000 | – |
| Sep–Dec 2023 | $6,300 | +$300 |
| Jan–Dec 2024 | $6,800 | +$500 |
| Jan–Dec 2025 | $7,400 | +$600 |
| From Jan 2026 | $8,000 | +$600 |
2. Higher CPF Rates for Employees Aged 55 to 65
To strengthen retirement funding for older workers, CPF contribution rates for those aged 55 to 65 will rise in 2026:
| Age Group | 2025 Rate | 2026 Rate | Employer Share | Employee Share |
|---|---|---|---|---|
| > 55 to 60 | 32.5% | 34% | 16% (+0.5) | 18% (+1.0) |
| > 60 to 65 | 23.5% | 25% | 12.5% (+0.5) | 12.5% (+1.0) |
These additional contributions will go into the Retirement Account (RA) up to the Full Retirement Sum (FRS). Excess contributions will be diverted to the Ordinary Account (OA).
There are no rate changes for new SPRs in their first or second year of residency.
Why CPF Is Key to Financial Planning
CPF is more than just a savings scheme—it’s a long-term financial system structured around key life needs:
- MediSave Account: Used for hospital stays, outpatient bills, and premiums for health insurance like MediShield Life.
- Ordinary Account: Supports property purchases, education, and insurance payments.
- Special/Retirement Account: Helps build steady income post-retirement.
CPF ensures compulsory yet flexible savings, supporting Singaporeans at every life stage while building long-term financial independence.
Conclusion
Singapore’s CPF scheme is evolving to support an ageing workforce. With the OW ceiling rising and higher contribution rates for seniors in 2026, these updates aim to strengthen retirement adequacy.
FAQs
1. Will CPF rates increase in 2026 for all workers?
A = No, the increases apply only to workers aged 55 to 65.
2. What is the CPF Ordinary Wage ceiling in 2026?
A = It will rise to $8,000 per month starting January 1, 2026.
3. Do new SPRs have to pay full CPF rates immediately?
A = No, they contribute at graduated rates for the first two years.
4. Where can I check my CPF contribution details?
A = Visit cpf.gov.sg or use the MyCPF mobile app.
