While permanent residency (PR) is evaluated on an individual basis, employers also have cause to celebrate. After all, it is unlikely that the PR application would have succeeded without stable employment, and this new PR counts towards the local employee headcount in the business when it comes to the company’s foreign manpower quota.
Now that your employee has officially become or is becoming a Singapore Permanent Resident (PR), it’s time to make some changes to the payroll processing because employers have to start making CPF contributions for new PRs.
Read Also: Complete Guide To Employer’s CPF Contributions In Singapore
Employers Must Pay CPF Contributions For New Singapore Permanent Resident (SPR) Employees
Once your employee obtains his or her SPR status, you must make CPF contributions for him or her. This applies from the day your employee becomes an PR. This is the date indicated on his or her entry permit (Form 5/5A) issued by the Immigration and Checkpoints Authority of Singapore (ICA).
CPF contributions are mandatory for PR employees working in Singapore, even if you have been making contributions to their home country’s pension scheme.
As it can be a stark difference in the employee’s total cost to the business as well as the take-home pay for the employee, the first two years of CPF contribution after obtaining PR status is at a graduated rate for both employer and employee to help with the adjustment. The full CPF contribution rates will apply from the third year as an SPR.
Specifically, the first year rate will apply from the day your employee becomes a PR. The second and third year rates will apply from the month following the anniversary of his PR conversion.
For example, if your employee obtained SPR status on 5 October 2025, the following start dates for CPF contributions will apply:
| Year of obtaining PR status | Starts from | Ends on | CPF contribution rate |
| First year | 5 October 2025 | 31 October 2026 | Graduated rate |
| Second year | 1 November 2026 | 31 October 2027 | Graduated rate |
| Third year onwards | 1 November 2027 | n.a. | Full rate |
Read Also: Senior Worker CPF Contribution Rates And CPF Transition Offset Scheme: What Businesses Need To Know
First And Second Year CPF Contribution Rates Are Reduced For Both Employer And Employee
The first and second year CPF contributions are reduced to help with adjustment to full CPF contributions. This reduced rate is known as the graduated rate.
Depending on the wage and age of the employee, the contribution rates may vary. Employers can calculate the exact contributions using the CPF Contribution Calculator or use CPF EZPay which will automatically compute them.
In general, if the employee is aged below 55 years old and earns more than $750, the following rates will apply:
| Graduated Employer & Graduated Employee (G/G) Contribution Rate | Employee’s share of CPF contributions | Employer’s share of CPF contributions | Total CPF contributions (Employer’s & Employee’s share) |
| First Year | 5% of Ordinary Wage (Capped at $300) + 5% Additional Wage | 4% of Ordinary Wage (Capped at $240) + 4% Additional Wage | 9% of Ordinary Wage (Capped at $540) + 9% Additional Wage |
| Second Year | 15% of Ordinary Wage (Capped at $900) +15% Additional Wage | 9% of Ordinary Wage (Capped at $540) +9% Additional Wage | 24% of Ordinary Wage (Capped at $1,440) + 24% Additional Wage |
Employers Can Choose To Contribute At The Full CPF Rate During The First Two Years
If an adjustment period is not necessary, the employer and employee can contribute CPF at the full rate during the first two years. This can be done in two ways:
- Employer and employee both contribute at full rates or
- Employer contributes at full rates while employee contributes at graduated rates.
These higher rates can apply as soon as the day of the employee’s PR conversion and will require a joint application with the PR employee.
For employers who hire a PR employee who is still within their first two years, you can still contribute at the graduated rate even if the PR employee was contributing at a higher rate with their previous employer. The higher contribution rates stop when there is a change in employment. If you as the new employer and your PR employee wish to contribute at the higher rates, you will need to submit a new joint application.
In general, if the employee is aged below 55 years old and earns more than $750, the following rates will apply:
Full Employer – Graduated Employee CPF Contribution Rates (Need Joint Application)
| Full Employer & Graduated Employee (F/G) | Employee’s share of CPF contributions | Employer’s share of CPF contributions | Total CPF contributions (Employer’s & Employee’s share) |
| First Year | 5% of Ordinary Wage (Capped at $300) + 5% Additional Wage | 17% of Ordinary Wage (Capped at $1,020) + 17% Additional Wage | 22% of Ordinary Wage (Capped at $1,320) + 22% Additional Wage |
| Second Year | 15% of Ordinary Wage (Capped at $900) +15% Additional Wage | 17% of Ordinary Wage (Capped at $1,020) + 17% Additional Wage | 32% of Ordinary Wage (Capped at $1,920) + 32% Additional Wage |
Full Employer – Full Employee CPF Contribution Rates (Need Joint Application)
| Full Employer & Full Employee (F/F) | Employee’s share of CPF contributions | Employer’s share of CPF contributions | Total CPF contributions (Employer’s & Employee’s share) |
| Year Of Application With Employer Or Third Year Onwards | 20% of Ordinary Wage (Capped at $1,200) + 20% Additional Wage | 17% of Ordinary Wage (Capped at $1,020) + 17% Additional Wage | 37% of Ordinary Wage (Capped at $2,220) + 37% Additional Wage |
What Happens If The Employee’s Permanent Resident Status Changes?
Sometimes life events happen and your employee’s PR status may change.
If the employee renounces their SPR status, CPF contributions are payable for the period when he or she is still a PR. You can stop contributing to CPF from the day they officially become a foreigner.
Likewise, if your PR employee obtains Singapore Citizenship, the PR contribution rates apply until the day they obtain citizenship. Full CPF contribution rates will apply from the day they obtain Singapore Citizenship even if they were still within the 1st or 2nd year of PR and only getting graduated CPF contribution rates. For these new citizens, employers may need to prorate the Ordinary Wages (OW) and apply the applicable Additional Wages (AW) contribution rates depending on when AW is paid.
For example, if your employee is in the second year of Singapore Permanent Resident (SPR) status and becomes a Singapore Citizen on 5 October 2025.
For OW
- The second year PR rate should be applied to the pro-rated wages for the period 1 October to 4 October 2025.
- The Singapore Citizen rate should be applied to the pro-rated wages for the period of 5 October to 31 October 2025.
For AW
- The second year PR rate should be applied on the AW if it is payable between 1 October to 4 October 2025.
- The Singapore Citizen rate should be applied on the AW if it is payable between 5 October to 31 October 2025.
If the Ordinary Wages for the month exceeds the Ordinary Wage ceiling or if the pro-rated wages are below $750, you can write to CPF for assistance on the computation.
Your employee should inform you as soon as they become a PR (or if and when their PR status changes). However, sometimes things may get waylaid. While the due date for CPF contributions is on the last day of the calendar month, employers have up to the 14th of the following month (or the next working day) to make CPF contributions before late payment charges are imposed.
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