For a Singapore Citizen aged 55 or below, a Singapore employer pays CPF of 17% of monthly wages on top of the salary, up to S$1,360 a month at the S$8,000 Ordinary Wage ceiling. Add SDL at 0.25% of wages, capped at S$11.25, and the statutory cost of that hire in 2026 is 17.25% on top of salary from S$800 to S$4,500 a month, and a smaller share above that.
This guide is for the person budgeting a Singapore hire. It covers what “employer contribution” includes, where CPF starts, how the two wage ceilings cap your cost, what one hire costs at four salaries, and how the tax side works. Older employees, PRs in their first two years, and foreign hires cost different amounts, and each case is set out below.
The full rate tables for every age band and PR year, the SDL table, and the self-help group funds are in our Singapore CPF, SDL, and CDAC rate guide. Paying CPF each month, the deadlines, and what late payment costs are in our Singapore CPF payroll compliance guide. Every figure on this page comes from the CPF Board, the Ministry of Manpower (MOM), or IRAS, and was checked on September 30, 2026.
In Singapore, the main employer contribution is the employer’s share of CPF. On a payroll budget, it sits alongside two more statutory costs and one deduction that looks like a cost and is not:
| What it is | Who it applies to | Who pays it |
|---|---|---|
| CPF, employer share | Singapore Citizens and PRs earning more than S$50 a month | You, on top of salary |
| CPF, employee share | The same employees, once they earn more than S$500 a month | The employee, deducted from salary by you |
| Skills Development Levy (SDL) | Every employee working in Singapore, including foreign employees | You |
| Foreign Worker Levy | S Pass and Work Permit holders only | You |
| Self-help group funds | Employees in each community, deducted by default, with an opt-out | The employee, deducted from salary by you |
Sources: CPF Board, who should receive CPF contributions, how much CPF contributions to pay, Skills Development Levy, and contributions to self-help groups; MOM, the S Pass and Work Permit levy pages. All read September 30, 2026.
Two of those are yours to carry on every local hire: the CPF employer share and SDL. The levy applies only if you hire on an S Pass or a Work Permit. The self-help group funds come out of the employee’s pay, so they are not an employer cost, even though you deduct them and pay them over with CPF.
If you are looking for Singapore’s social insurance contributions, CPF is the scheme. MOM describes it as “a mandatory social security savings scheme funded by contributions from employers and employees,” and it pays for retirement, housing, and healthcare.
For an employee aged 55 or below who is a Singapore Citizen, or a PR from the third year of PR status, you pay 17% of monthly wages and the employee pays 20%, a total of 37%. Your share on salary is worked out on Ordinary Wages up to S$8,000 a month, so it stops at S$1,360.
Your share falls as the employee gets older. The new rate applies from the first day of the month after the employee’s 55th, 60th, 65th, or 70th birthday.
| Employee’s age | Your share in 2026 | Most you pay a month on Ordinary Wages | Your share from January 1, 2027 |
|---|---|---|---|
| 55 and below | 17% | S$1,360 | 17% |
| Above 55 to 60 | 16% | S$1,280 | 16.5% |
| Above 60 to 65 | 12.5% | S$1,000 | 13% |
| Above 65 to 70 | 9% | S$720 | 9% |
| Above 70 | 7.5% | S$600 | 7.5% |
Sources: CPF Board, CPF contribution rate tables from January 1, 2026, Table 1, and CPF contribution changes from January 1, 2027. Rates for monthly wages above S$750, private sector employees. The monthly maximum is the total contribution at the S$8,000 ceiling minus the employee’s share, which is how the CPF Board works out the employer’s share.
If you are budgeting into 2027, the employer share for employees above 55 to 65 rises by half a percentage point on January 1, 2027. The CPF Board lists no change for the other age bands.
PRs in their first two years of PR status contribute at lower, graduated rates by default. For an employee aged 55 or below, your share is 4% in the first year and 9% in the second, unless you and the employee apply jointly to contribute at full rates. How the graduated years run, and when payroll switches rates, is in our guide to running CPF payroll, and every graduated table is in our CPF rate tables by age and PR year.
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There is no CPF at all on total wages of S$50 a month or less. Above S$50, you start paying. The employee’s share starts later, above S$500, and reaches the full rate above S$750. For an employee aged 55 or below in 2026:
| Employee’s total wages for the month | You pay | The employee pays |
|---|---|---|
| S$50 or less | Nothing | Nothing |
| Above S$50 to S$500 | 17% of total wages | Nothing |
| Above S$500 to S$750 | 17% of total wages | 0.6 x (total wages minus S$500) |
| Above S$750 | 17% of wages | 20% of wages |
Source: CPF Board, CPF contribution rate tables from January 1, 2026, Table 1. The older age bands use the same three thresholds at their own rates.
Two examples. On S$400 a month, you pay S$68, and the employee pays nothing. On S$600 a month, the total is S$162: S$102 from you and S$60 from the employee, because the employee’s share is 0.6 x S$100.
Wages here means the CPF Act’s definition of wages: basic pay, overtime, bonuses, allowances, commission, and cash incentives count, and reimbursements of expenses incurred for the employer and benefits in kind do not. SDL has no threshold like CPF’s. It is S$2 a month, the minimum, for every employee earning less than S$800.
Ordinary Wages, such as monthly salary, attract CPF only up to S$8,000 a month in 2026, up from S$7,400 in 2025. On a S$9,000 salary, CPF is worked out on S$8,000, so your share stays at S$1,360.
Additional Wages, such as an annual bonus, have their own ceiling for the year: S$102,000 minus the total Ordinary Wages subject to CPF for the year. It applies per employee, per employer, per calendar year.
Take an employee aged 55 or below on S$12,000 a month with a S$30,000 bonus in 2026. Ordinary Wages subject to CPF are S$96,000 for the year (S$8,000 x 12), so the Additional Wage ceiling is S$6,000. You pay CPF on S$6,000 of the bonus: S$1,020, on top of the S$16,320 you paid on salary, which makes S$17,340 for the year.
At lower salaries, more of a bonus fits under the ceiling. On S$6,000 a month with a S$20,000 bonus, the Additional Wage ceiling is S$30,000 (S$102,000 minus S$72,000), so the whole bonus attracts CPF, and your share of it is S$3,400.
So S$17,340, which is 17% of S$102,000, is the most you pay in compulsory CPF for one employee aged 55 or below in 2026, however high the salary and bonus. That figure is our arithmetic on the CPF Board’s two ceilings. If you pay CPF above them, the excess is a voluntary contribution unless you claim it back from the CPF Board, and the tax section below explains what that means for the employee.
Sources: CPF Board, what payments attract CPF contributions, for the Ordinary and Additional Wage ceilings; IRAS, tax treatment of CPF contributions, for the S$7,400 ceiling in 2025 and S$8,000 from January 1, 2026.
This is the statutory cost of one employee aged 55 or below who is a Singapore Citizen, or a PR from the third year of PR status, paid monthly salary only, with no bonus that month.
| Monthly salary | Your CPF | SDL | Monthly cost to you | On top of salary | Employee’s CPF | Take-home before tax |
|---|---|---|---|---|---|---|
| S$3,000 | S$510 | S$7.50 | S$3,517.50 | 17.25% | S$600 | S$2,400 |
| S$5,000 | S$850 | S$11.25 | S$5,861.25 | 17.2% | S$1,000 | S$4,000 |
| S$8,000 | S$1,360 | S$11.25 | S$9,371.25 | 17.1% | S$1,600 | S$6,400 |
| S$12,000 | S$1,360 | S$11.25 | S$13,371.25 | 11.4% | S$1,600 | S$10,400 |
Our arithmetic on the CPF Board’s 2026 rate table (Table 1, with its rounding steps) and its SDL rules, read September 30, 2026. Take-home is before income tax and any self-help group deduction. The Foreign Worker Levy does not apply to Citizens or PRs. Statutory costs only, so insurance, leave, and benefits are not included.
From S$800 to S$4,500 a month, the statutory cost runs at 17.25% on top of salary: 17% CPF plus 0.25% SDL. Above S$4,500, SDL stops at S$11.25, and above S$8,000, CPF stops at S$1,360, so the percentage falls. At S$12,000 a month, it is 11.4%.
For an employee above 55, or a PR in the first two years, use the employer share from the age table above in place of 17%.
See a demo of how our Global Payroll service calculates CPF and SDL.
The salary in an offer letter is gross pay. The employee’s CPF share comes out of it. Your share is paid on top and is not part of gross salary.
So for an employee aged 55 or below, 20% of wages up to the ceiling goes to CPF from their pay, and you add 17% of your own. On a S$5,000 salary, S$1,000 comes out of pay, you add S$850, and S$1,850 goes into the employee’s CPF account that month. The employee takes home S$4,000 before income tax.
You pay both shares to the CPF Board, and, in the CPF Board’s words, you are “entitled to recover the employee’s share when paying your employee’s wages for the month.”
Not the compulsory part. IRAS treats compulsory CPF contributions relating to employment in Singapore as not taxable. Voluntary contributions, meaning anything above what the CPF Act requires, are taxable as the employee’s income.
One way to create a voluntary contribution by accident is to pay CPF on salary above the S$8,000 ceiling. On a S$9,000 salary, employer CPF on the extra S$1,000 is S$170 a month, and it is taxable as the employee’s income unless you claim it back from the CPF Board. The CPF Board accepts refund applications for overpaid contributions no later than one year from the date of payment (contributions above the CPF Annual Limit are refunded automatically), and our guide to CPF refunds and corrections covers the steps. If you make excess contributions, IRAS requires you to prepare Form IR8A for the employee. Under the Auto-Inclusion Scheme (AIS), the details go to IRAS directly.
By March 1 of the year after the income is earned, employers must prepare Form IR8A for their employees in Singapore, under section 68(2) of the Income Tax Act. Employers with 5 or more employees must register for AIS and submit the same information to IRAS electronically by March 1, and IRAS pre-fills it into each employee’s tax return. Once registered, you stay in AIS even if headcount falls below 5. Employers outside AIS give each employee a hardcopy IR8A by March 1 instead.
CPF for a month is due by the last day of that month, and the CPF Board takes enforcement action against employers who have not paid by the 14th of the following month. SDL and the self-help group funds are usually paid with it. The monthly routine, late-payment interest, and how to correct a mistake are in our CPF payroll compliance guide, and the Singapore Employment Guide covers the rest of the employment rules.
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SDL is 0.25% of each employee’s total monthly wages, with a minimum of S$2 below S$800 and a maximum of S$11.25 above S$4,500, for every employee working in Singapore, foreign employees included. The CPF Board collects it with CPF on behalf of the Skills and Workforce Development Agency (SWDA), and it is paid into the Skills Development Fund, so some payroll reports label the line SDF. If you employ only foreign staff, the CPF Board asks you to pay SDL directly to SWDA instead. The monthly submission steps are in our CPF payroll compliance guide. The SDL table and worked examples are in our guide to Singapore SDL and CPF rates.
The Foreign Worker Levy is a monthly levy for S Pass and Work Permit holders only. For an S Pass holder, MOM has set it at S$650 a month in every sector since September 1, 2025. For a Work Permit holder, the rate depends on the sector, the worker’s qualifications, and how many Work Permit or S Pass holders you employ, so check MOM’s levy page for the sector you hire in. Work pass holders receive no CPF, because CPF applies only to Singapore Citizens and PRs.
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Managing Singapore CPF contributions, SDL payments, and the year-end tax records is a monthly job that runs alongside payroll. We work with companies hiring in Singapore in three ways:
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For a Singapore Citizen, or a PR from the third year of PR status, aged 55 or below, 17% of monthly wages, paid on top of salary. The S$8,000 Ordinary Wage ceiling caps it at S$1,360 a month on salary. The share is 16% above 55 to 60, 12.5% above 60 to 65, 9% above 65 to 70, and 7.5% above 70. From January 1, 2027, it rises to 16.5% above 55 to 60 and 13% above 60 to 65.
CPF applies once total wages pass S$50 a month. Between S$50 and S$500, only the employer pays, at 17% for an employee aged 55 or below. The employee’s share phases in between S$500 and S$750 and is the full 20% above S$750. SDL has no such threshold: it is S$2 a month, the minimum, for every employee earning less than S$800.
For an employee aged 55 or below, 20% of wages up to the S$8,000 ceiling is deducted from pay. The employer’s 17% is paid on top and is not part of gross salary. On S$5,000 a month, the employee takes home S$4,000 before income tax, the employer pays S$850 on top, and S$1,850 goes into the employee’s CPF account.
IRAS treats compulsory employer CPF relating to employment in Singapore as not taxable for the employee. Voluntary contributions, meaning anything above what the CPF Act requires, are taxable. The employer prepares Form IR8A for the employee to report them, and an employer in the Auto-Inclusion Scheme sends the details to IRAS directly.
For an employee aged 55 or below in 2026, S$17,340. Salary attracts CPF only up to S$8,000 a month, and bonuses only up to S$102,000 minus the Ordinary Wages subject to CPF for the year, so CPF wages for the year stop at S$102,000, and 17% of that is S$17,340. That figure is our arithmetic on the CPF Board’s two ceilings.
It means the contributions the law requires on each employee’s wages. For a Singapore employer, that is the employer’s CPF share for Citizens and PRs, SDL for every employee working in Singapore, and the Foreign Worker Levy for S Pass and Work Permit holders. The self-help group funds are deducted from the employee’s pay, so they are not an employer contribution.
CPF is Singapore’s social security scheme. MOM calls it “a mandatory social security savings scheme funded by contributions from employers and employees,” and it covers retirement, housing, and healthcare. For an employer, the CPF employer share is the social security contribution.
SDL is the Skills Development Levy: 0.25% of each employee’s total monthly wages, with a S$2 minimum and a S$11.25 maximum. The employer pays it for every employee working in Singapore, foreign employees included. The levy is paid into the Skills Development Fund, and some payroll reports label it SDF after that fund.
No. CPF applies only to Singapore Citizens and PRs, so Employment Pass, S Pass, and Work Permit holders receive none. You still pay SDL for them, and S Pass and Work Permit holders carry a monthly Foreign Worker Levy, which is S$650 for an S Pass holder. If the employee becomes a PR, CPF applies from then on, starting at the graduated first-year rates.
The statutory cost does not change: the CPF and SDL rates on this page apply whoever employs the person, and an Employer of Record adds its own service fee on top. What changes is who runs it and who is the legal employer. If the employee is on your own Singapore entity, our Global Payroll service can run CPF, SDL, and the self-help group deductions each month and prepare the IR8A records. If you have no Singapore entity, our Employer of Record service can employ a Singapore Citizen or PR for you as the legal employer, so the CPF contributions and SDL sit with us.
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