CPF and Employee Matters
Central Provident Funds
Who do you need to pay CPF contributions for?
- Company directors if they are engaged under a contract of service and paid a salary on top of any fee received
- Full Time employees
- Part-time/casual employees
- Foreigners from the day they attain Singapore Permanent Resident (SPR) status in Singapore
- School-leavers or students working on a part-time or temporary basis
CPF is NOT payable for the following:
- Directors’ fees voted to company directors at General Meetings
- Singapore citizens or Singapore Permanent Residents working overseas
- Foreigners holding Employment Pass, S Pass, Miscellaneous Work Pass or Work Permits
- Partners, sole-proprietors, or self-employed persons (however they will need to contribute to their own Medisave Accounts)
- ‘N’, ‘O’ and ‘A’ level Government School students working during their gazetted school holidays
- Tertiary students on full-time industrial attachment, or employed under a training programme, during vacation or term approved by the selected institutions
- Students working during vacation or term, under a training programme approved by their overseas tertiary education institution, and the training period does not exceed 6 months
How to Create a CPF Account?
You are strongly encouraged to apply to e-submit your CPF contribution details using CPF [email protected] as soon as you intend to hire your first employee, or pay yourself your first salary. You will need your SingPass and company’s Unique Entity Number (UEN) to apply.
Upon approval, you will receive your Company CPF Submission Number (CSN), Payment Advice (CPF91) and GIRO application form from the CPF Board. Normally, the first CPF Contribution will be made using the Payment Advice form as the GIRO application will take some time before approval.
When to Pay CPF Contributions?
You are required to pay the employer’s and employee’s share of CPF contributions monthly for all employees.
Basis of CPF Contribution
The CPF contribution rates applicable for an employee who is a Singapore Citizen is dependent on his or her wages and age group. For SPRs, the rate will be dependent on his or her Year of SPR status, wages and age group.
Total Wages used to compute the CPF contribution for any given month is computed based on the sum of Ordinary Wages and Additional Wages for the month.
Ordinary Wages are wages due or granted wholly and exclusively in respect of an employee’s employment in that month which will also include allowances like food allowance or overtime payment.
Additional Wages are wages which are not granted wholly and exclusively for the month such as bonus, leave pay, incentive and other payments made at intervals of more than a month.
You may check on the amount of CPF payable for each employee HERE.
The Ordinary Wage (OW) Ceiling is currently fixed at $6,000 per month and this limit will apply until 31 August 2023.
As announced in the 2023 Budget, the OW Ceiling will be adjusted to $6,300 from 1 Sep 2023, $6,800 from 1 Jan 2024, $7,400 from 1 Jan 2025 and finally $8,000 from 1 Jan 2026.
The Additional Wage (AW) Ceiling is dependent on the following formula:
CPF Contribution Rates at a Glance
|Year 2023 Rates|
|AGE GROUP||EMPLOYER CONTRIBUTION||EMPLOYEE CONTRIBUTION||TOTAL CPF CONTRIBUTION|
|UP TO 55||17||20||37|
|55 – 60||14.5||15||29.5|
|60 – 65||11||9.5||20.5|
|65 – 70||8.5||7||15.5|
Late Payment of CPF Contribution
Non Payment of CPF Contribution
Reporting Employee Earnings to IRAS
Auto-Inclusion Scheme for Employment Income
Implication of the Earnings Reporting requirement
Use of Employment Contracts
- Commencement Date
- Place of Work
- Job Description/ Job Title
- Working Days / Work hours / Overtime hours
- Public Holidays
- Annual Leave
- Sick Leave
- Maternity/Paternity Leave
- Childcare Leave
- Termination of Employment
- Notice Period for Resignation
- Company Information Confidentiality
- Workmen’s Insurance (if required)
It is highly recommended for companies to draft a proper employment contract, compliant with applicable employment laws, to provide clarity on the terms of employment for both the employer and the employee.
The Employment Act
Part IV of the Act, which provides for rest days, hours of work and other conditions of service, applies only to:
- Workmen earning not more than $4,500 basic monthly salaries; and
- Employees (other than workmen) covered under Employment Act earning not more than $2,600 basic monthly salaries Basic salary will excludes overtime, bonus, Annual Wage Supplement, productivity incentive payment, reimbursement for special expenses and any allowances.
Persons employed in managerial and executive positions earning a basic monthly salary not exceeding $4,500 will be covered under the Employment Act, except for the provisions in Part IV.
You may read more about the Singapore Employment Act HERE.