This CPF contributions guide gives Singapore employers the short answer first. You pay Central Provident Fund (CPF) contributions for each Singapore citizen and permanent resident you employ. For most staff aged 55 and below, you pay 17% of wages and the employee pays 20%. Contributions are due at the end of each month, and you should pay by the 14th of the next month.
Who you must pay CPF for
CPF applies to employees who are Singapore citizens or Singapore permanent residents. The Ministry of Manpower says this also covers company directors, part-time and casual employees, and family members of the business owner who are paid wages for their work.
Foreign workers on work permits are treated differently. If you pay the foreign worker levy for a migrant worker, you do not pay CPF for that person. You do pay the Skills Development Levy. If a work permit holder becomes a permanent resident, CPF starts from the day the PR status is granted.
Check each person's status when you hire them. A wrong status is a common reason for missed or wrong payments.
Sources: Ministry of Manpower, "Employer's contributions" (mom.gov.sg/employment-practices/central-provident-fund/employers-contributions).
How the employer and employee shares work
CPF is shared between you and your employee. For employees aged 55 and below who earn more than $750 a month, the rates are simple. The employer pays 17% of wages. The employee pays 20% of wages. The total is 37%.
You do not pay the employee's 20% out of your own pocket. You take it from the employee's salary, then send it to CPF together with your 17%. The employee sees the deduction on the payslip.
Lower earners pay less, so the 37% figure applies to wages above $750 a month. Rates are also different for employees above age 55 and for permanent residents in their first two years. Look up the CPF Board rate table for these cases before you run payroll.
Sources: CPF Board, "How much CPF contributions to pay" (cpf.gov.sg/employer/employer-obligations/how-much-cpf-contributions-to-pay).
Which pay counts and the wage ceiling
CPF is worked out on wages. Ordinary wages are the pay you give for work done in the month, such as basic salary. Additional wages are pay that is not for one month only, such as a yearly bonus. Both can attract CPF.
There is a limit on how much ordinary wage counts each month. This is the ordinary wage ceiling. Today it is $6,000 a month. In Budget 2023, announced on February 14, 2023, the government said the ceiling will rise to $6,300 from September 1, 2023. Plan your payroll system for that date.
Here is a simple example. An employee aged 45 earns $5,000 a month. The employer share is 17% of $5,000, which is $850. The employee share is 20%, which is $1,000. The total sent to CPF is $1,850 for the month.
If the same employee earned $8,000, only the first $6,000 would count as ordinary wages. The employer share would be $1,020 and the employee share $1,200.
Sources: CPF Board infohub, "Budget Highlights 2023" (cpf.gov.sg/member/infohub/news/cpf-related-announcements/budget-highlights-2023).
When to pay and what late payment costs
CPF contributions are due on the last day of the calendar month. The CPF Board takes enforcement action if you have not paid by the 14th of the following month. If the 14th falls on a weekend or public holiday, the cut off moves to the next working day.
Late payment interest is 1.5% per month, which is 18% a year, with a minimum of $5 for each month. Interest starts counting the day after a payment is due. Late or missing payments can also lead to fines or other action.
The CPF Board offers its own services to submit and pay contributions online. Set a payroll date a few days before the 14th, so a bank delay does not make you late.
Sources: CPF Board, "When is the due date for CPF contributions?" (cpf.gov.sg/service/article/when-is-the-due-date-for-cpf-contributions); Ministry of Manpower, "Employer's contributions".
A simple monthly checklist
Use the same routine every month. First, confirm who joined or left and update their CPF status. Second, add up the wages for the month, including any bonus. Third, apply the right rate and the wage ceiling. Fourth, deduct the employee share from pay. Fifth, submit and pay before the 14th of the next month. Finally, keep your records so you can show how each number was worked out.
If you cannot pay on time, contact the CPF Board early instead of staying silent. Employers who explain a cash flow problem and act quickly are in a better position than those who ignore the due date.
This note is general information for employers, not advice. For your own case, ask the CPF Board or a payroll accountant in Singapore.
Sources: CPF Board and Ministry of Manpower pages listed above.
Sources
- Central Provident Fund Board, cpf.gov.sg: how much CPF contributions to pay; when is the due date for CPF contributions; Budget 2023 salary ceiling news.
- Ministry of Manpower, mom.gov.sg: Employer's contributions.