Older Workers To Make 1.5% More In CPF Contributions From 2025<\/strong><\/h3>\n\n\n\nThe CPF Transition Offset was first announced in Budget 2020 as part of the Senior Worker Support Package to ease the costs incurred by businesses having to raise their CPF contribution rates for their older workers.<\/p>\n\n\n\n
The first round of increase to the CPF contribution rates for older workers was implemented at the start of 2022. A second round of similar increases in the CPF contributions rates for older workers was announced in Budget 2022.<\/p>\n\n\n\n
Following a third round of increases to senior workers\u2019 CPF contributions in 2024, the target contribution rates for senior workers aged 65 to 70 were achieved. <\/p>\n\n\n\n
A fourth round of CPF contribution rate increases was announced in Budget 2024, raising it by 1.5% for workers aged 55 to 65 from 1 January 2025. The increase in contribution rates would be fully allocated to the Retirement Account to help senior workers save more for retirement.<\/p>\n\n\n\n
This translates to:<\/p>\n\n\n\n
For workers aged 55 to 60<\/strong>: The total CPF contribution will increase by 1.5%-points<\/strong> from the current 31% to 32.5% starting on January 1, 2025. The employee\u2019s share of the contribution increases by 1%-points, while the employer\u2019s share of the contribution increases by 0.5%-points<\/strong>.\u00a0<\/p>\n\n\n\nFor workers aged 60 to 65<\/strong>: The total CPF contribution will increase by 1.5%-points <\/strong>from the current 22% to 23.5% starting on January 1, 2025. The employee\u2019s share of the contribution increases by 1%-points, while the employer\u2019s share of the contribution increases by 0.5%-points<\/strong>.<\/p>\n\n\n\nAt Budget 2025, a sixth round of CPF increases for older workers were announced. This will raise CPF Contributions for those aged 55 to 65 by 1.5%-points in 2026. Similar to the increase in 2025, the employee\u2019s share of the contribution will go up by 1%-points, while the employer\u2019s share of the contribution will rise by 0.5%-points<\/strong>. <\/p>\n\n\n\nThe table below summarises the changes in the total CPF contribution rates by both Employer and Employee. <\/p>\n\n\n\n
Current and Target CPF Contribution Rates (Employer + Employee) by Age Band<\/strong><\/p>\n\n\n\n![\"CPF](\"https:\/\/dollarsandsense.sg\/business\/wp-content\/uploads\/2025\/03\/CPF-contribution-rate-increases-1024x155.png\")
<\/figure>\n\n\n\nRead Also: <\/em><\/strong>Complete Guide To Employer\u2019s CPF Contributions In Singapore<\/em><\/strong><\/a><\/p>\n\n\n\nAs we can see, no changes were recommended for those aged 55 and below or those aged above 70. Only those aged between 55 and 70 were the target group to receive more CPF contributions.<\/p>\n\n\n\n
In 2024, those aged above 65 to 70 reached their target CPF contribution level. This means only those aged above 55 to 65 will be impacted going forward.<\/p>\n\n\n\n
The latest round of increases announced in Budget 2025 raised the CPF Contribution rates for those above 60 to 65 to within 1%-point of its target rate, while those above 55 to 60 are still 3%-points away from their target contribution rates.<\/p>\n\n\n\n
Businesses Will Receive Half Of The Higher CPF Contribution From CPF Offset Transition<\/strong><\/h3>\n\n\n\nThrough the CPF Transition Offset, businesses get payouts equivalent to half of the increased contribution rates. The scheme serves to alleviate some of the rise in business costs from the increase in CPF rates in 2025.<\/p>\n\n\n\n
![\"\"](\"https:\/\/dollarsandsense.sg\/business\/wp-content\/uploads\/2024\/02\/CPF-Transition-Offset-1024x376.png\")
Source: MOF<\/a><\/figcaption><\/figure><\/div>\n\n\n\nFor example:<\/strong><\/p>\n\n\n\nFor a worker aged 58 years old earning $4,500, the employer needs to pay a total CPF contribution of 15.5% or $697.50 in 2025. This is a rise of $22.50 per month compared to what they would have paid in 2024. The offset that the employer will receive will be equivalent to $11.25 per month or $135 for the whole of 2025 – comprising half of the increase in cost due to this measure.<\/p>\n\n\n\n
For a worker aged 62 years old earning $2,800, the employer needs to pay a total CPF contribution of $336 or 12%. This is a rise of $14 per month compared to what they would have paid in 2024. The offset the employer will receive will be equivalent to $7 per month or $84 for the whole of 2025 – again, comprising half of the increase in cost due to the rise in employer CPF contributions.<\/p>\n\n\n\n
This scheme will be similarly extended to 2026 – to cover the new round of CPF Contribution rate increases.<\/p>\n\n\n\n
For workers aged 60 to 65<\/strong>: The total CPF contribution will increase by 1.5%-points <\/strong>from the current 22% to 23.5% starting on January 1, 2025. The employee\u2019s share of the contribution increases by 1%-points, while the employer\u2019s share of the contribution increases by 0.5%-points<\/strong>.<\/p>\n\n\n\n At Budget 2025, a sixth round of CPF increases for older workers were announced. This will raise CPF Contributions for those aged 55 to 65 by 1.5%-points in 2026. Similar to the increase in 2025, the employee\u2019s share of the contribution will go up by 1%-points, while the employer\u2019s share of the contribution will rise by 0.5%-points<\/strong>. <\/p>\n\n\n\n The table below summarises the changes in the total CPF contribution rates by both Employer and Employee. <\/p>\n\n\n\n Current and Target CPF Contribution Rates (Employer + Employee) by Age Band<\/strong><\/p>\n\n\n\n Read Also: <\/em><\/strong>Complete Guide To Employer\u2019s CPF Contributions In Singapore<\/em><\/strong><\/a><\/p>\n\n\n\n As we can see, no changes were recommended for those aged 55 and below or those aged above 70. Only those aged between 55 and 70 were the target group to receive more CPF contributions.<\/p>\n\n\n\n In 2024, those aged above 65 to 70 reached their target CPF contribution level. This means only those aged above 55 to 65 will be impacted going forward.<\/p>\n\n\n\n The latest round of increases announced in Budget 2025 raised the CPF Contribution rates for those above 60 to 65 to within 1%-point of its target rate, while those above 55 to 60 are still 3%-points away from their target contribution rates.<\/p>\n\n\n\n Through the CPF Transition Offset, businesses get payouts equivalent to half of the increased contribution rates. The scheme serves to alleviate some of the rise in business costs from the increase in CPF rates in 2025.<\/p>\n\n\n\n For example:<\/strong><\/p>\n\n\n\n For a worker aged 58 years old earning $4,500, the employer needs to pay a total CPF contribution of 15.5% or $697.50 in 2025. This is a rise of $22.50 per month compared to what they would have paid in 2024. The offset that the employer will receive will be equivalent to $11.25 per month or $135 for the whole of 2025 – comprising half of the increase in cost due to this measure.<\/p>\n\n\n\n For a worker aged 62 years old earning $2,800, the employer needs to pay a total CPF contribution of $336 or 12%. This is a rise of $14 per month compared to what they would have paid in 2024. The offset the employer will receive will be equivalent to $7 per month or $84 for the whole of 2025 – again, comprising half of the increase in cost due to the rise in employer CPF contributions.<\/p>\n\n\n\n This scheme will be similarly extended to 2026 – to cover the new round of CPF Contribution rate increases.<\/p>\n\n\n\n<\/figure>\n\n\n\nBusinesses Will Receive Half Of The Higher CPF Contribution From CPF Offset Transition<\/strong><\/h3>\n\n\n\n
![\"CPF](\"https:\/\/dollarsandsense.sg\/business\/wp-content\/uploads\/2025\/03\/CPF-Transition-Offset-for-Older-Workers-1024x582.png\")