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Hiring employees in Singapore requires employers to comply with several statutory contributions, including the Central Provident Fund (CPF), the Skills Development Levy (SDL), and employer tax reporting obligations. These contributions are designed to support retirement savings, healthcare, and workforce development programs.
For companies expanding into Singapore, understanding the latest contribution rates, wage ceilings, and filing requirements is critical to maintaining payroll compliance and avoiding penalties.
In 2026, according to Singapore’s Ministry of Manpower (MOM), employer contributions in Singapore primarily consisted of payments to the Central Provident Fund (CPF) and the Skills Development Levy (SDL). For employees aged 55 and below, CPF contributions total 37% of wages, with 17% paid by employers and 20% deducted from employees.
The Ordinary Wage (OW) ceiling will increase to S$8,000 in January 2026, meaning CPF contributions apply only up to this salary level for monthly wages. Employers must also pay SDL at 0.25% of wages, while annual income reporting is submitted via Form IR8A to the Inland Revenue Authority of Singapore (IRAS).
CPF contributions vary depending on the employee’s age group. The combined contribution includes both employer and employee portions.
|
Age Group |
Total CPF Contribution |
Employer CPF Contribution |
Employee CPF Contribution |
|
55 and below |
37% |
17% |
20% |
|
55 – 60 |
34% ↑ |
15.5% |
18.5% |
|
60 – 65 |
23% ↑ |
12% |
11% |
|
65 – 70 |
16.5% |
9% |
7.5% |
|
Above 70 |
12.5% |
7.5% |
5% |
These rates apply to Singapore citizens and permanent residents and are subject to CPF wage ceilings.
Need help calculating CPF contributions accurately? Talk to our payroll experts.
CPF contributions are calculated only up to specific wage ceilings according to the CPF Board.
The CPF OW ceiling will increase from S$7,400 to S$8,000 in January 2026.
This means that for employees earning above S$8,000 per month, CPF contributions will only be calculated based on the first S$8,000 of their salary.
The annual CPF ceiling remains S$102,000, covering both ordinary wages and additional wages such as bonuses.
Understanding these limits helps employers correctly apply the CPF deduction rate and avoid over- or under-contributing.
Let’s look at a practical example to understand how much salary goes to CPF.
Example: Employee earning S$7,000 per month (age ≤55)
|
Component |
Amount |
|
Gross salary |
S$7,000 |
|
Employer CPF (17%) |
S$1,190 |
|
Employee CPF (20%) |
S$1,400 |
|
SDL (0.25%) |
S$17.50 |
|
Total employer cost |
≈ S$8,207.50 |
When budgeting for a new hire in Singapore, employers must factor in an additional 17.25% premium on top of the base salary to cover mandatory CPF and SDL obligations.
See how our Global Payroll solution automates CPF and SDL calculations.
In addition to CPF, Singapore’s Ministry of Manpower (MOM) also requests employers to pay the SDL contribution rate in Singapore, which supports national workforce development initiatives.
SDL payments are typically processed together with CPF submissions through the CPF Board.
Employers must report employee income annually to the Inland Revenue Authority of Singapore.
The key reporting document is Form IR8A, which details an employee’s salary, bonuses, and taxable benefits.
Important deadlines:
Failure to file accurate tax reports may result in penalties or compliance investigations. You may find more information in this Singapore Employment Guide.
Expanding into Singapore? An Employer of Record handles these filings for you.
Beyond base salary, employers should account for the following statutory costs:
|
Cost Component |
Typical Rate |
|
CPF employer contribution |
17% |
|
SDL contribution |
0.25% |
|
Total statutory employer cost |
≈ 17.25% of salary |
Understanding this CPF contribution by employers helps businesses plan accurate payroll budgets when hiring in Singapore.
Struggling to calculate the exact employer burden for your Singapore team? Request a free global payroll audit today.
Managing Singapore CPF contributions, SDL payments, and tax reporting can become complex, especially for international companies hiring in Singapore without a local entity.
As a global Employer of Record (EOR) provider, Slasify helps companies hire and pay employees in Singapore while ensuring full payroll compliance.
With Slasify, businesses can:
By outsourcing payroll compliance to Slasify, companies can focus on growing their business while reducing regulatory risk. Request a demo today to see how Slasify simplifies global hiring.
Yes. Employers must contribute to the Central Provident Fund (CPF) for eligible Singapore citizens and permanent residents. For employees aged 55 and below, employers contribute 17% of wages, while employees contribute 20%, bringing the total CPF contribution to 37%.
Yes. Starting January 2026, the CPF Ordinary Wage (OW) ceiling increases to S$8,000 per month, meaning CPF contributions are calculated only up to this salary level.
Yes. Eligible employees contribute 20% of their salary to CPF, which is deducted directly from their wages, while employers contribute an additional 17% on top of the salary.
Yes. Employers must pay the Skills Development Levy (SDL) at 0.25% of each employee’s monthly wages, subject to minimum and maximum contribution caps. This applies to both local and foreign employees.
No. Employers are required to submit annual employee income reports using Form IR8A to the Inland Revenue Authority of Singapore (IRAS). Failure to file accurate reports by the deadline may result in penalties or compliance actions.
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