{"id":14213,"date":"2025-12-28T14:00:32","date_gmt":"2025-12-28T06:00:32","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=14213"},"modified":"2025-12-30T19:46:48","modified_gmt":"2025-12-30T11:46:48","slug":"cpf-contribution-ceiling-increases-to-8000-in-2026-how-employees-and-employers-will-be-affected","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/cpf-contribution-ceiling-increases-to-8000-in-2026-how-employees-and-employers-will-be-affected\/","title":{"rendered":"CPF Contribution Ceiling Increases To $8,000 In 2026: How Employees And Employers Will Be Affected"},"content":{"rendered":"\n

On 1 January 2026, the CPF contribution limit will rise to $8,000, from $7,400 previously. This should not be a surprise for anyone as the government had already announced this gradual increase in CPF contributions during Budget 2023.<\/p>\n\n\n\n

This is the final phase of the increase that was meant to raise the monthly CPF contribution ceiling to $8,000, from $6,000 previously. However, the CPF Annual Limit remains at $37,740.<\/p>\n\n\n\n

Here\u2019s how this change will affect employees and employers in 2026.<\/p>\n\n\n\n

Read Also: 8 Changes To CPF Scheme That Will Happen In 2026<\/a><\/em><\/strong><\/p>\n\n\n\n

Employees Earning More Than $7,400 A Month <\/strong><\/h3>\n\n\n\n

This round of increase to the CPF monthly contribution ceiling will only affect employees earning more than $7,400 a month. Those earning less will not be affected at all.<\/p>\n\n\n\n

If an employee is earning $7,500 a month, only the next $100 of his salary is affected \u2013 and requires CPF contributions from both the employer and the employee.<\/p>\n\n\n\n

Likewise, even if an employee is earning $20,000 a month, only up to the next $600 of his salary is affected. Currently, he would already have CPF contributions for $7,400 of his salary, and now, this will increase to $8,000 of his salary.<\/p>\n\n\n\n

For employees under 55 years old, this means they will receive $102 more in CPF contributions from their employers each month. This raises their overall remuneration.<\/p>\n\n\n\n

However, their take-home pay will also be affected, as they have to make their share of employee CPF contributions too. This means their take-home pay will reduce by up to $120 a month.<\/p>\n\n\n\n

Those Who Receive Annual Bonuses May Not Be Affected<\/strong><\/h3>\n\n\n\n

The announcement in 2023 came with a caveat \u2013 that the CPF Annual Limit will not change from the existing $37,740 cap. <\/p>\n\n\n\n

This means employees earning $7,400, but who receive a variable bonus that may take their average annual wage above $8,000 a month may not be affected.<\/p>\n\n\n\n

While we\u2019ve established that only those who more than $7,400 will be affected, only a smaller proportion may actually get higher overall CPF contributions.\u00a0<\/p>\n\n\n\n

What will definitely happen is that such employees will get higher CPF contributions every month. However, those who earn a bonus may not end up getting higher overall CPF contributions \u2013 as the CPF Annual Limit will remain at $37,740.<\/p>\n\n\n\n

This means, if an employee earns $8,000 a month, and receives a 2-month bonus during the year, they don\u2019t actually get higher overall CPF contributions.<\/p>\n\n\n\n

Previously, they would only make CPF contributions on $7,400 of their monthly salary. For example, if at the end of 2025, they get a 2-month bonus worth $16,000 (i.e. 2 x $8,000), they would still have to make CPF contributions on their Additional Wage (AW) of up to $102,000 \u2013 [Total Ordinary Wages (OW) That Attracted CPF Contributions]<\/strong>. This would equate to $102,000 \u2013 [$88,800] = $13,200. And, this means they would end up making the maximum CPF contributions up to the CPF Annual Limit during the year. Of the $16,000 2-month bonus, only $13,200 would attract CPF contributions.<\/p>\n\n\n\n

If the same scenario happens in 2026, they would also only be making CPF contributions up to the CPF Annual Limit, but in a slightly different manner. In this example, they would start making CPF contributions on the full $8,000 of their monthly salary, and only make CPF contributions on their Additional Wage (AW) of up to $102,000 \u2013 [$96,000] = $6,000. So, only up to $6,000 of their 2-month, $16,000 bonus would attract CPF Contributions.<\/p>\n\n\n\n

In both situations, though, their overall CPF contributions do not change.<\/p>\n\n\n\n

Read Also: Ordinary Wage (OW) VS Additional Wage (AW): What\u2019s The Difference (And Why It Matters To Employers And Employees)<\/a><\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"You have to make CPF contributions on up to $8,000 of monthly salary from 2026.\n","protected":false},"author":10,"featured_media":14214,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[364,95],"tags":[130,354,2488,1802,370,1856,1857,1803],"yoast_head":"\nCPF Contribution Ceiling Increases To $8,000 In 2026: How Employees And Employers Will Be Affected | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"Both employers and employees will make higher CPF contributions in 2026 - which means slightly higher costs and lower take-home pay.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dollarsandsense.sg\/business\/cpf-contribution-ceiling-increases-to-8000-in-2026-how-employees-and-employers-will-be-affected\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CPF Contribution Ceiling Increases To $8,000 In 2026: How Employees And Employers Will Be Affected | DollarsAndSense Business\" \/>\n<meta property=\"og:description\" content=\"Both employers and employees will make higher CPF contributions in 2026 - 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