Every country has its social security program to provide financial and medical security for its citizens or residents. For Singapore, it’s the Central Provident Fund (CPF Singapore). Under the mandatory CPF Singapore program, both the employer and employee are required to contribute monthly. In addition to staying compliant with employment regulations to avoid penalties, employers in Singapore will also need to take CPF contributions into consideration when designing payroll structure, as it directly affects the company’s costs.
In 2025, the CPF board in Singapore made many changes across the board, including policies like raising the CPF salary ceiling and increasing contribution rates for senior employees. These changes bring better security and coverage for the residents, but also pose challenges for budget and compliance planning for companies.
In this article, we will cover the key areas that you need to know when making hiring decisions in Singapore:
The Central Provident Fund (CPF) is a mandatory retirement savings scheme in Singapore, administered by the government. It plays a big part in helping citizens in Singapore manage key life expenses. In addition to the most obvious retirement purpose, CPF savings also support housing, healthcare, and even education costs along the way.
CPF contribution is shared by both the employer and the employee if you are hiring Singapore Citizens or Permanent Residents who earn more than S$50 a month.
There are also three different accounts under CPF, each with its purpose:
Most foreign employees and non-residents aren’t required to contribute to CPF, unless they later become PRs or meet special conditions. If you’re unsure how CPF in Singapore applies to your team, our experts at Slasify are ready to help you figure it out. See how we simplify hiring in Singapore.
Hiring in Singapore means you’ll need to factor CPF contribution rates into every employee's payslip. Both employers and employees need to chip in.
The CPF is designed to accompany Singaporeans from their first job all the way to post-retirement. Younger employees have higher total contribution rates, so they save up more for housing, education, and investment. Older workers see a gradual step-down to alleviate the burden from employers, as the employees should be financially sound at that stage of their career.
Here’s a quick look at the current CPF contribution rates by age group (standard rates for Singapore Citizens and PRs in 2025):
Reference: CPF standard rates for 2025, CPF Board
The monthly CPF contributions are divided into the three accounts. The proportions change according to the age group - younger groups have most of the contributions in OA, whereas the older groups have more portions going into their SA and MA.
Just like any other social security program around the world, there is also a CPF salary ceiling. In 2025, the monthly ceiling was raised from S$6,800 to S$7,400, and will again rise to S$8,000 in 2026. The CPF annual salary ceiling is set unchanged at S$102,000.
If you’re hiring Permanent Residents (PRs), note that there’s a “Graduated” plan to help ease the payroll and salary burden, in which the employer and employee contribute 9% in the first year of becoming a PR and 24% in the second year. The full standard rates will apply from the third year onwards.
So, how does CPF calculation work in real life? Let’s say you hire a Singapore citizen under the age of 55 who earns $ 4,000 per month. The total amount would be $1,480:
Please also keep in mind that CPF contributions must be paid by the 14th of the following month. Failure to pay by the deadline could cause serious consequences, including:
Needless to say, the penalties are severe and could damage the company legally and financially, let alone tarnish its reputation. We’d recommend using an Employer of Record (EOR) service to stay compliant and handle all the hassle worry-free.
The impact of CPF Singapore goes beyond an extra line in your payroll. With the ceiling and rates increased year over year, it means a higher total cost to the company (CTC) and less net salary for the employees. It affects how budget planning is done for each role and the price required to keep valuable employees.
Every month, you need to calculate CPF amounts correctly, taking wage ceilings and bonus payments into account. Many companies find that manual calculations become tricky as headcounts grow or when new contribution rates kick in.
This is why many companies prefer to rely on payroll solutions that track CPF rules and changes automatically. Slasify’s trusted global payroll solutions do exactly that to ensure that your company always stays compliant and pays on time, hassle-free, so you can focus on growing your team.
By now, we can see that Singapore takes CPF compliance seriously as it goes beyond just making payments on time. As the obligation of the employer, you need to ensure that the amounts are calculated and workers are classified correctly.
Companies are also expected to keep the documents for potential audits. Here’s a quick checklist of the essential documents to help you stay compliant:
Aside from proper recordkeeping, handling CPF calculation in the event of employee termination, resignation, or part-month payment could be quite confusing. Things like miscalculation on the actual days worked, wage calculation (ordinary wage, bonuses, termination fees), or even missing updates when an employee leaves the company, could all cause errors easily.
Misclassifying a full-time employee as a contractor is another risk. Contractors don’t get CPF Singapore, but if someone works fixed hours under your control, with pay and tools provided, they’re legally an employee. Getting this wrong can lead to back payments, fines, or even legal action. Always check roles carefully and keep records to show who counts as staff and who is independent.
A good habit is to run internal checks on your payroll records on a regular basis. Many companies also choose to work with local compliance experts to make sure their CPF payments stay error-free.
For global HR teams, staying compliant with CPF Singapore means getting all the processes and details right every month, instead of just wage ceilings and contribution rates. We’ve seen many companies struggle with extra paperwork when onboarding new hires, handling tax forms for employees leaving the company, and so much more.
Slasify’s Employer of Record (EOR) solution lets you make local hires without setting up a local entity. Aside from reduced costs, you simply provide the details of your talents and Slasify will take care of the rest, including onboarding, legal compliance, and even offboarding for you. By becoming the legal Employer of Record (EOR), Slasify takes full responsibility for CPF compliance.
Here’s what Slasify handles through its Employer of Record (EOR) service:
Our cloud-based platform is also designed to help HR teams streamline payments and compliance efficiently, so your team doesn’t waste hours on paperwork.
Slasify supports over 150 countries and 130 currencies worldwide to provide fast market-entry, full compliance and flexibility to help you manage the day-to-day of local payroll and HR operations.
Staying on top of CPF Singapore rules takes more than just knowing the basics. You need regular checks and the right tools. Here’s a quick checklist to help you stay compliant and avoid surprises:
Keeping up with CPF is the backbone of legal and financial compliance when you hire locally. From calculating contributions to staying ahead of rate changes, getting it wrong can lead to fines, audits, legal liability, and lost time fixing mistakes.
Slasify makes sure you don’t have to worry about any of that. With our trusted and proven Employer of Record (EOR) and payroll solutions, your CPF contributions stay accurate, on time, and audit-ready. Get in touch with our Global experts today and see how we can help you hire, pay, and stay compliant in Singapore.
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