As an employer in Singapore, staying informed about CPF (Central Provident Fund) changes is vital for ensuring compliance and maintaining smooth payroll processes. Starting January 1, 2025, the CPF contribution rates for employees aged above 55 to 70 will increase.
CPF Contribution Rate Changes (Effective January 1, 2025)
Below is the updated CPF contribution rate table for employees aged above 55 to 70:
Employee Age Group | Current Total CPF Contribution Rate (%) | New Total CPF Contribution Rate (%) | Increase in Total CPF Contribution Rate (%) | Employer Contribution Rate (%) | Employee Contribution Rate (%) |
Above 55 to 60 | 20.5 | 21.0 | +0.5 | 14.5 | 6.5 |
Above 60 to 65 | 15.5 | 16.0 | +0.5 | 10.0 | 6.0 |
Above 65 to 70 | 11.0 | 11.5 | +0.5 | 7.5 | 4.0 |
Increase in CPF Ordinary Wage ceiling from 1 January 2025
(a) The CPF Ordinary Wage (OW) ceiling limits the amount of OW that attract CPF contributions in a calendar month for all employees. The OW ceiling will be raised to $8,000 by 2026. The increase took place in four steps since 1 September 2023 to allow employers and employees to adjust to the changes.
(b) There will be no change to the CPF annual salary ceiling of $102,000, which sets the maximum amount of CPF contributions payable for all salaries received in the year, inclusive of both Ordinary Wages and Additional Wages.
(c) There will be no changes to the Additional Wage ceiling and CPF Annual Limit, where they will remain at [$102,000 – Total Ordinary Wage subject to CPF for the year] and $37,740 respectively.
Please refer to the table below for the CPF OW and annual salary ceilings from 2023 to 2026.
Period | CPF OW Ceiling | CPF Annual Salary Ceiling | Increase in OW Ceiling |
1 Jan 2016 – 31 Aug 2023 | $6,000 | $102,000 | - |
1 Sep 2023 – 31 Dec 2023 | $6,300 | $102,000 | +$300 |
1 Jan 2024 – 31 Dec 2024 | $6,800 | $102,000 | +$500 |
1 Jan 2025 – 31 Dec 2025 | $7,400 | $102,000 | +$600 |
From 1 Jan 2026 | $8,000 | $102,000 | +$600 |
Note: The CPF annual salary ceiling remains unchanged at $102,000 throughout this period.
These adjustments are designed to keep pace with wage growth and enhance retirement savings for employees. This adjustment is part of the government's ongoing efforts to enhance retirement adequacy.
Here’s what you need to know:
Incremental Rate Adjustments: The changes will impact both employer and employee contribution rates. The total CPF contribution will increase progressively, as announced in the CPF updates.
Payroll System Updates: Employers should ensure payroll systems are updated to reflect the new rates. Staying compliant helps avoid unnecessary penalties and ensures accurate contributions.
Benefits of Increased Contributions: These adjustments aim to strengthen the retirement savings of employees, providing greater financial security during their golden years.
Take proactive steps to prepare for these changes:
Review CPF Guidelines: Familiarize yourself with the new rates to understand how they impact employer and employee contributions.
Communicate with Employees: Keep your staff informed about these updates, ensuring transparency in their CPF deductions and contributions.
Update Payroll Systems: Check with your payroll provider to ensure the system automatically incorporates the new rates.
For detailed information, visit the CPF website or contact CPF Board for clarification.
Stay ahead of the curve and prioritize compliance to foster trust and professionalism within your organization.
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