Current The CPF monthly salary ceiling sets the maximum amount of CPF contributions payable for Ordinary Wages, and is currently set at S$6,000. There is also the CPF annual salary ceiling which sets the maximum amount of CPF contributions payable for all wages received in the year, inclusive of both Ordinary Wages and Additional Wages. It is currently set at 17 times of the monthly salary ceiling to account for bonuses equivalent to five months’ salary, and is currently set at S$102,000.
Proposed The Government will raise the CPF monthly salary ceiling from S$6,000 to S$8,000 by 2026. The increase will take place in four steps, as shown in table below.
Table: Changes in CPF Monthly Salary Ceiling
| CPF Monthly Salary Ceiling (S$) | CPF Annual Salary Ceiling (S$) | |
|---|---|---|
| Current | 6,000 | 102,000 |
| From 1 September 2023 | 6,300 (+300) | 102,000 |
| From 1 January 2024 | 6,800 (+500) | 102,000 |
| From 1 January 2025 | 7,400 (+600) | 102,000 |
| From 1 January 2026 | 8,000 (+600) | 102,000 |
There will be no change to the CPF annual salary ceiling at this juncture, but it will be reviewed periodically.
In 2019, the Government announced that CPF contribution rates would be gradually raised over the next decade or so for Singaporean and Permanent Resident workers aged above 55 to 70 (refer to Table 1 below). Once the increases have been fully implemented, workers aged above 55 to 60 will have the same CPF contribution rates as younger workers.
Table 1: Current and Target CPF Contribution Rates (Employer + Employee) by Age Band
| Age Band | 2016-2021 | Current CPF Contribution Rates (As of 1 January 2023) | By ~2030 | | --- | --- | --- | --- | | ≤55 | 37.0% | No Change | No Change | | >55 to 60 | 26.0% | 29.5% | 37.0% | | >60 to 65 | 16.5% | 20.5% | 26.0% | | >65 to 70 | 12.5% | 15.5% | 16.5% | | >70 | 12.5% | No Change | No Change |
The first two increases came into effect on 1 January 2022 and 1 January 2023, with the third increase set to take place on 1 January 2024, as detailed in Table 2 (below). The increase in CPF contribution rates for senior workers will be fully allocated to the Special Account.
Table 2: CPF Contribution Rates for Senior Workers from 1 January 2024
| CPF Contribution Rates from 1 January 2024 | CPF Contribution Rates from 1 January 2024 | CPF Contribution Rates from 1 January 2024 | ||
|---|---|---|---|---|
| Age Band | Total | Employer | Employee | CPF Transition Offset for 2024 |
| ≤55 | No Change | No Change | No Change | No Change |
| >55 to 60 | 31.0% | |||
| (+1.5%-pt) | 15.0% | |||
| (+0.5%-pt) | 16.0% | |||
| (+1%-pt) | 0.25%-pt | |||
| >60 to 65 | 22.0% | |||
| (+1.5%-pt) | 11.5% | |||
| (+0.5%-pt) | 10.5% | |||
| (+1%-pt) | 0.25%-pt | |||
| >65 to 70 | 16.5% | |||
| (+1%-pt) | 9.0% | |||
| (+0.5 %-pt) | 7.5% | |||
| (+0.5%-pt) | 0.25%-pt | |||
| >70 | No Change | No Change | No Change | No Change |
Notes:
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| This online newsletter and website has been prepared by Crowe Horwath First Trust (”Crowe Singapore”) and should be used as a general guide only. No reader should act solely upon any information found on this website. We recommend that professional advice be sought before taking action on specific issues and making significant business decisions. Crowe Singapore expressly disclaims all and any liability to any person in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this website. While every effort has been made to ensure the accuracy of the information contained herein, Crowe Singapore shall not be responsible whatsoever for any errors or omissions in it. |
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