CPF Contribution Guide for Employers

Over the years, Singapore’s Central Provident Fund (CPF) has been evolving in response to the needs of each generation of citizens. The CPF system promotes three core values:

  • Personal responsibility: Stay employed and save more for your retirement
  • Ownership: Accumulated savings are your own
  • Lifelong income: Savings will pay you a stream of retirement income for life

Huxley offers a high level of service that meets the ever-changing compliance and regulation standards in Singapore. This blog will support you in understanding the employment requirements in Singapore, to ensure your company is compliant with CPF board Singapore.


What is CPF?

CPF is a mandatory employment-based social security saving scheme funded by contributions from employers and employees. It is a key pillar of Singapore’s social security system and serves to meet the country’s healthcare, retirement, and housing needs. CPF is administered by the Central Provident Fund Board (CPF Board), a statutory board under the Ministry of Manpower, and you can access CPF online to view your respective savings accounts.


What are the benefits of CPF contribution?

According to the Singapore Government,

  1. CPF contribution supports your employees in their finances for retirement, housing and healthcare

Unlike pension schemes in other countries, the CPF goes beyond providing members with an income in retirement. The CPF board also helps us to save for housing and healthcare.


  1. CPF contribution provides your employees risk-free CPF interest rates

CPF members earn government-guaranteed CPF interest rates of up to 6% per annum on their savings. More information on CPF interest rates can also be found at CPF gov.sg website.

In comparison, other defined-contribution pensions schemes require members to take on some investment risks to grow their savings.


  1. CPF contribution rate is dependent on the salary and age of an individual

CPF contribution and allocation depends on both salary and age group. For those aged 55 and below, 20% of employees’ ordinary wage (capped at ordinary wage ceiling of S$6,000) will be deducted from employees to go towards their CPF while 17% of their ordinary wage will be paid out from employers into employees’ CPF. You may refer to CPF Contribution Rates Table to find out the full breakdown by age and income.


  1. CPF contribution can assist your employees in their retirement but may not necessarily be the only source

The savings required to meet retirement needs differ from person to person and there is no CPF minimum sum. To help provide for basic retirement expenses, CPF members can set aside the Basic Retirement Sum (BRS), which takes reference from the actual spending of retiree households.

To get higher CPF pay-outs, your employees can choose to:

  1. Top up their CPF; or
  2. Defer their start date of retirement pay-outs.

Unlike our CPF board Singapore where it’s funded by both employers and employees, many other pension schemes are funded by taxpayers. Given rapidly ageing populations and the challenges with reducing pension benefits or deferring pension pay-out, these systems run the risk of default or insolvency.


  1. CPF contribution helps your employees when they pass on as any unused CPF monies are distributed to their nominees and/or loved ones.

Most tax-funded pension schemes stop payments upon members’ death, so not all of a member’s contributions will be paid out to them or their loved ones. This is not the case in Singapore.


Changes in CPF Contribution for your Employees

If you hire employees in Singapore, you will need to make CPF contributions for them. This will mainly help your employees meet their retirement, housing and healthcare needs.

Singapore will increase the CPF contribution rates for employees aged 55 to 70 years from January 1, 2022.

The increase was due in January 2021 but was deferred to 2022 to enable employers to manage overhead costs amidst the pandemic. Additionally, the government plans to gradually increase CPF contributions for those aged 55 to 70 years over the coming decade to strengthen their retirement adequacy and strengthen Singapore’s businesses’ foundations for older work employment. From January 2022, CPF contributions would have increased between 1.5 and two percent of total wages.


Other related CPF Levies in Singapore

CPF Board Singapore collects the Foreign Worker Levy (FWL) on behalf of the Ministry of Manpower (MOM). Skills Development Levy (SDL) is another compulsory levy that employers have to pay for all employees working in Singapore, on top of their CPF contribution and Foreign Worker Levy. CPF Board Singapore collects SDL on behalf of the SkillsFuture Singapore Agency (SSG).


Getting started: Registering as an Employer and Knowing your Responsibilities

To start contributing CPF as a new employer, you should apply for CPF Submission Number as soon as you intend to hire your first employee. To apply, you will need your Singpass and entity’s Unique Entity Number (UEN).

You will be notified via email once your application is approved. You will also receive a hardcopy welcome letter which contains your CPF Submission Number (CSN) and a Direct Debit Authorisation form.

After which, do follow the steps below:

  1. Quote your CSN when transacting with CPF Board e.g. paying CPF contributions or corresponding with CPF.
  2. The due date for CPF contributions is on the last day of the calendar month. Enforcement action would be taken against employers who fail to pay by the 14th of the following month (or the next working day if the 14th falls on a Saturday, Sunday or Public Holiday). This includes imposing late payment interest charged at 1.5% per month commencing from the first day after the due date.
  3. After your payment has been processed, you will receive an email notification to access CPF online to view your Record of Payment (ROP). Please note that a hardcopy ROP will not be sent.
  4. Please check your ROP and inform the CPF Board immediately of any discrepancy. Your ROP should be kept for future reference.


When is CPF not payable for contract jobs in Singapore?

It is dependent on the type of contract job. CPF contributions are not payable if a person is providing his services under a "contract for service".

A contract for service is an agreement in which a person or an entity is engaged as an independent contractor, such as a self-employed person or a vendor engaged for a fee to carry out an assignment or a project for a company on a freelance basis. For such contract jobs, there is no employer-employee relationship, and the person will not be covered under the Employment Act. They will therefore not be entitled to the statutory benefits under the Act.

As statutory benefits do not apply, the terms of engagement will be according to the contract agreed upon by both parties. The contractor, however, is required to pay compulsory MediSave contribution as a self-employed person.

For more information, please visit the Ministry of Manpower website. Nonetheless, if require support and guidance, our team is here to help. Do leave your enquiry in the form below with your hiring needs and our dedicated team members will be in touch. For other employment related articles, please visit our blog section.


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Whether you’re a professional looking for a job or a business seeking highly skilled talent, the team at Huxley are here for you.


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