Complete Guide To Employer’s CPF Contributions In Singapore

Employers in Singapore contribute up to 17% of their Singapore Citizen or Permanent Resident employees’ monthly salaries into their CPF accounts. This is how companies here play their part in building a safety net for Singapore workers in their old age.

It is also the responsibility of employers to pay both the employer CPF contribution and the employee CPF contribution. Companies are supposed to recover the employee’s share of CPF contributions from the month’s wages before paying it out.

Read Also: Guide To Understanding The Jobs Growth Incentive (JGI) for Companies Hiring Local Workers

Which Employees Are Entitled To CPF Contributions?

CPF Contributions are required for full-time, part-time, casual, or temporary employees who are:

  • Singapore Citizens or Permanent Residents
  • Earning more than $50 in a month
  • Engaged under a contract of service

When Is The Due Date For Companies To Pay CPF Contributions For Their Employees?

The due date for CPF contributions is on the last day of the calendar month. However, employers have until the 14th of the following month (or the next working day if the 14th falls on a Saturday, Sunday or Public Holiday) to make payment. Failure to do so may lead to enforcement actions, including a late payment interest charged at 1.5% per month from the due date.  

How To Make CPF Contributions For Employees In Singapore?

Employers are encouraged to make CPF contributions via the CPF e-Submit@web portal, using their SingPass/CorpPass. Auto-computations of CPF contributions for employers’ and employee’s share, as well as contribution amounts based on changes in employees’ age group and residential status.

Auto-computations of Skills Development Levy (SDL) and contributions to Self-Help Groups (SHG) are provided.

Read Also: Skills Development Levy (SDL): What Is It And How Much Do Companies Need To Pay?

Employers can make payment via Direct Debit, Standing Instructions, eNETS, cheques or Diners Club card / NETS at any AXS Stations.

How Much Do Companies In Singapore Have To Contribute To Their Employees’ CPF Accounts?

Singapore companies contribute a percentage of their employees’ monthly salary, depending on their age, to their CPF accounts as long as the employees earn over $50 a month. This is capped at the first $6,000 on their monthly salary.

While the employer CPF contributions are uniform, the employee CPF contributions vary for those who earn $750 and more, and those earn more than $50 to $500 and above $500 to $750. We flash the numbers out in the tables below for greater clarity.

For employees earning $750 or more a month

Employee’s Age Employer Contribution
(% Of Wage)
 Employee Contribution
(% Of Wage) 
55 and below1720 
Above 55 to 601313 
Above 60 to 6597.5 
Above 657.5

From the table above, we can see that two employees who earn the same amount can receive different CPF contributions based on their age. In general, both employer CPF contributions and employee CPF contributions reduce with age.

With lower employer CPF contributions, older employees are less costly for employers, making them more competitive in the jobs market. At the same time, lower employee CPF contributions also allow older employees to take home more of their salary in cash.

For employees earning under $750:

Employee’s AgeMonthly Wages Employer Contribution(% Of Wage)Employee Contribution
55 and below>$50 to >$50017Nil
 >$500 to >$750170.6 (Total Wage – $500)
Above 55 to 60>$50 to >$50013Nil
 >$500 to >$750130.39 (Total Wage – $500)
Above 60 to 65>$50 to >$5009Nil
 >$500 to >$75090.225 (Total Wage – $500)
Above 65>$50 to >$5007.5Nil
 >$500 to >$7507.50.15 (Total Wage – $500)

The employer CPF contribution for employees earning less than $750 remains the same. The employee CPF contributions differ though, with those who earn under $500 paying nothing, while those who earn more than $500 to under $750 paying a portion. This is to help low wage workers get a higher take-home pay.

Besides CPF contributions on monthly wages or Ordinary Wages (OW), we also have to pay CPF contributions on an employee’s Additional Wage (AW).

CPF Contributions Additional Wages In The Year

CPF contributions for Additional Wages are required, even if they bring an employee’s average salary to over $6,000 a month. Employers cannot apply the Ordinary Wage ceiling on Additional Wages on the months that it is paid out.

Additional Wages include payments such as annual bonuses or leave pay, that are not paid based on an employee’s performance in the specific month. Employees are entitled to both employer CPF contributions and employee CPF contributions on their entire Additional Wages, subject to a cap.

The cap on Additional Wages is ($102,000 – Ordinary Wages subject to CPF contributions for the year). 

Let’s take the example of an employee who earns $9,000 a month (Ordinary Wage) and receives a two-month bonus of $18,000 at the end of the year (Additional Wage). While his Ordinary Wage is $108,000 a year, only $72,000 ($6,000 X 12) will be subject to CPF contributions. This means that his entire $18,000 bonus will be subject to CPF contributions, as $72,000 + $18,000 = $90,000 is less than the $102,000 cap on Additional Wages for the year. 

CPF Contributions For Permanent Residents (PRs)

CPF contributions for employees who are PRs are the same as for Singaporeans. The only difference is in the first two years of when an employee obtains their PR status. In the first two years, employers pay a lower CPF contribution for them.

Read Also: Do You Need To Pay CPF For Your Singapore  Employees Based Overseas?

For employees who are 1st and 2nd year PRs, earning $750 or more a month:

Singapore PR Employee’s Age Employer Contribution
(% Of Wage)
Employee Contribution
(% Of Wage)
55 and below1st Year PRs45
 2nd Year PRs915
Above 55 to 601st Year PRs45
 2nd Year PRs612.5
Above 60 to 651st Year PRs3.55
 2nd Year PRs3.57.5
Above 651st Year PRs3.55
 2nd Year PRs3.55

Similar to Singaporeans, PRs who earn under $50 do not receive any CPF contributions, while those who earn above $50 to under $750 receive the same employer CPF contributions, but lower employee CPF contributions.

Employers have the option to make full CPF contributions for the PR employees if they choose to do so.

Once the PR employee becomes a 3rd year PR, full CPF contributions must be paid.

Are CPF Contributions Required For SGUnited Traineeship And SGUnited Mid-Career Pathways Programme?

As these are traineeship programmes, there is no employment relationship between host organisations and trainees. Thus, companies do not have to pay CPF contributions for their trainees.

If there is an intention to contribute CPF and establish an employment relationship, then such an arrangement will not be eligible for funding under the respective traineeship programmes.

CPF Contributions For Employees On National Service (NS)

For employees who are called up to National Service, we need to continue paying their full salary, including the employer CPF contributions and the employee CPF contributions. While companies can claim the make-up pay from MINDEF/SPF/SCDF, it will only be for the employee’s salary (including employee CPF contributions). Employers have to continue bearing the full employer’s share of CPF contribution.

CPF Contributions On Allowances, Commissions, Incentives And Overtime Pay

The CPF Board highlights these payment types as common mistakes employers make in calculating CPF contributions.

For allowances that constitute an employee’s wage, CPF contributions are payable. This may include a monthly transport or mobile phone allowance. However, CPF contributions are not payable for costs on a reimbursement basis for work purposes.

Similarly, CPF contributions are payable for commissions, incentives and overtime pay that are given to employees due to work done in the month. They should also be classified as Ordinary Wages rather than Additional Wages.

CPF Contributions For Retrenchment Benefits

CPF contributions are not payable for termination benefits for retrenchment or loss of future employment.

What Happens If The Employer Overpaid CPF Contributions?

For employers that realise they have overpaid CPF contributions and want a refund, we have to apply to the CPF Board to adjust the excess CPF contributions paid. Applications must be made within one year of the payment, otherwise it cannot be adjusted. We cannot deduct it off an employee’s salary

What Happens If The Employer Does Not Pay CPF?

Employers are required to pay all outstanding CPF contributions. Upon detection of late payment or non-payment of CPF contributions, CPF will send companies a notice by registered post informing them that legal action will be taken.

Interest on late payment (subject to a minimum of $5) and a composition amount may be imposed on defaulting employers.

If employers still do not pay, they will be taken to court. The court will order them to pay the CPF contributions, interest as well as a court fine and/or be sentenced to imprisonment.

If employers still do not pay, a warrant will be issued to seize and sell employers’ assets. Bankruptcy or winding up proceedings may be instituted as a last resort. The penalty for employers convicted of late payment offence:

  • Up to $5,000 court fine and no less than $1,000 per offence and/or up to 6 months imprisonment for 1st conviction
  • Up to $10,000 court fine and no less than $2,000 per offence and/or up to 12 months imprisonment for subsequent convictions

Employers who have recovered the employee’s share of CPF contributions but fail to pay the contributions to the CPF Board may be fined up to $10,000 and/or up to 7 years’ imprisonment.

Stay Healthy, Go Digital

Keep your workers and business healthy during this period by going digital. In partnership with IMDA Go Digital Initiative, understand how OCBC digital solutions can help your business buy, sell and operate better during this time.

Join The DollarsAndSense Business Community

For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.

You May Also Like