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Guide to CPF Contributions for New Employers in Singapore

05 Apr 2023
Guide to CPF Contributions for New Employers in Singapore

CPF for Employers

Most locals in Singapore would already know what the Central Provident Fund (CPF) is, considering that a cut of their income goes into their CPF accounts. However, the mechanics surrounding CPF are different when you’re an employer.

If you’ve just set up your company here and aren’t sure about how CPF works for employers, fret not – you’re at the right place. We promise that you’ll be an expert on CPF at the end of this article.

What is CPF

It’s best to explain what CPF is before we go in-depth into what employer obligations are. Simply put, the CPF scheme is an employment-based savings scheme compulsory for all Singapore citizens and Permanent Residents (PR).

Monthly contributions to CPF accounts are deducted by employers from employees’ monthly salaries. This amount is then invested on the employee’s behalf to be used for healthcare, homeownership, and family insurance.

Generally, employees receive up to 17% of their salaries in employers’ CPF contributions on top of the 20% contributed themselves from their salary. Employers have a legal obligation to provide CPF to their employees and can be met with heavy penalties for non-compliance.

Who is entitled to CPF contributions

As mentioned earlier, CPF contributions are required for employees who are citizens or PRs. This applies to full-time, part-time, casual, or temporary employment. Employees must also earn more than $50 a month and are engaged under a contract of service.

CPF contributions are not allowed for foreigners with an Employment Pass, S Pass, Miscellaneous Work Pass, or Work Permit.

How much do employers have to contribute to employees’ CPF

The percentage of CPF that employers will have to contribute depends largely on the age of the employee and is also capped at the first $6000 of their monthly salary. 

CPF Contributions for employees earning $750 or more a month

Age of Employee

CPF Contribution by Employer

CPF Contribution by Employee

Total Contribution

Up to 55 years old




55 to 60 years old




60 to 65 years old




Above 65 years old




Based on the table above, we can see that the amount of CPF contributions generally reduce with age. It also shows how employees who earn the same amount may have differences in CPF contributions due to their age.

Reducing the CPF contributions for older hires makes them more competitive in the jobs market as they cost less for employers. It also allows them to take home more of their salary instead of putting it in their CPF account.

Employee contributions for those earning under $750 differ from the table above. While employer contributions remain the same, workers contribute a smaller portion or do not have to contribute at all. This allows low-wage workers to bring home more of their salary.

For PRs, the only difference is that both employers and employees pay a lower CPF contribution in the first two years after the employee obtains his or her PR status. Once the employee becomes a third-year PR, full contributions must be paid.

Calculating how much CPF to pay employees

Here is where it gets a little confusing. But not to worry, we’ll break it into 3 simple steps for you to follow. In general, you will need to know what wage payments you will need to pay CPF contributions on and apply the correct CPF contribution rates.

1.Find out the wage payments you need to pay CPF contributions on

There are 6 payments that you will need to include when calculating CPF contributions:

  1. Basic wages
  2. Overtime pay
  3. Cash incentives
  4. Allowances
  5. Bonuses
  6. Commissions

2. Identify Ordinary Wages (OW) and Additional Wages (AW)

The total wages for the month are calculated by the sum of your employees’ Ordinary Wages (OW) and Additional Wages (AW).

Total wages = OW+AW

Ordinary Wages are wages that are due or granted in full and in respect of an employee’s employment that month, before the due date for CPF contributions for that month. For example, your monthly salary is an OW.

The current OW ceiling is capped at $6000. This means that if your employee earns $6500 a month, his CPF contribution will be limited to an OW of $6000. The remaining $500 will not require any CPF contribution.

Additional Wages are wages that are not granted wholly and exclusively for the month or wages made at intervals of more than a month. Examples of AW include annual bonuses and leave pay.

CPF contributions on AW are capped depending on the total OW subject to the year, and can be calculated using the following formula:

Yearly AW Cap = $102000 – Total OW subject to CPF for the year

3. Apply CPF contribution rates

Once you have calculated your company’s OW and AW, you just need to apply the correct rates listed in the table above. If you are unsure about how to calculate it accurately, you can use this contribution calculator provided by the CPF board to help you. 

Contributing to your own CPF as a business owner

If you are the owner of a Sole Proprietorship or Private Limited Company, you are only required to contribute to your Medisave account annually. You must also be earning a yearly Net Trade Income (NTI) of more than $6000.

NTI = Gross Trade Income – All allowable business expenditure – capital allowances – trade losses

Rates for Medisave Contributions


NTI Above $6000-$12000

Above $12000-$18000

Above $18000

Below 35



8% (Max $5760)




9% (Max $6480)




10% (Max $7200)

50 and above



10.5% (Max $7560)

How to pay CPF contribution

Once you’ve calculated all the CPF contributions to be made, follow the steps below to make your CPF payments. These should all be done after you’ve incorporated your company in Singapore and registered it with the Singapore Central Provident Fund Board.

  1. Apply to submit your CPF contribution on CPF e-Submit@web after hiring your first employee. You will need 
  2. After your application has been approved, you will receive a hardcopy letter of your CPF Submission Number (CSN) and Direct Debit Authorisation Form. You will need to fill both in to pay CPF contributions.
  3. You will receive an email notification to view the electronic Record of Payment (eROP) after payment has been processed.
  4. This eROP should be kept for future reference. Upon receiving it, ensure that all details are correct and notify the board if there are any discrepancies.

Due Dates

The due date for employers to make CPF contributions to their employees is on the last day of the calendar month. However, there is also a grace period for employers until the 14th of the following month. 

If you do not pay your CPF on time, you will be charged an interest of 1.5% per month starting from the first day after the due date. Law enforcement may be taken if you do not make the necessary payment by the 14th of the following month.

 As an employer, it’s best to have a fixed monthly schedule to pay your employees’ contributions on time. This makes it easier for you to keep track of your accounting and save money by being compliant.

Making CPF contributions to employees

And there you have it – everything you’ll need to know about CPF when you’re first starting out as your own boss. If you have more questions, you can contact CPF to clarify all your queries or check out their FAQ page for more information.

You can also reach out to us at Swiftly, where we provide services such as accounting and incorporation to help new and existing businesses. 

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