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Employer Contribution in Singapore
When employing talents from Singapore, as an employer, you are obligated to make monthly contributions towards your employee’s benefit, as mandated...
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Singapore is one of Asia’s most attractive business hubs, thanks to its diverse culture and access to global talent. However, given the strict and comprehensive labour regulations in Singapore, employers must also navigate a web of mandatory social contributions.
In the article below, we'll give you the ins and outs of navigating each contribution.
1. Why Social Contribution Compliance in Singapore Matters for Global Employers
Global companies often underestimate the role that CPF contributions play in Singapore. Common mistakes that foreign companies make include:
- Misapplying the Central Provident Fund (CPF) and Skills Development Levy (SDL) rates using the wrong employee classification.
- Ignoring wage ceilings, or misreading bonus treatment.
2. Overview of Mandatory Social Contributions in Singapore
In Singapore, mandatory social contributions refer to statutory payments that employers must make on behalf of their employees. The primary employer contribution is the Central Provident Fund (CPF), which is a retirement savings scheme to help Singapore citizens manage their key life expenses. Another mandatory employer contribution is the Skills Development Levy (SDL), which is a program aimed at supporting employee development.
These mandatory social contributions are legal obligations enforced by the Ministry of Manpower (MOM) and the CPF Board. For CPF, both employer and employee contribute based on monthly wages; for SDL, only the employer contributes.
3. What is the Central Provident Fund (CPF)?
Administered by the CPF Board, the Central Provident Fund (CPF) is Singapore’s cornerstone social security that funds retirement, housing, healthcare, and education throughout a Singapore citizen’s lifetime.
CPF contributions in Singapore are shared by both the employer and the employee if you are hiring Singapore Citizens or Permanent Residents (PR) who earn more than S$50 a month.
What are the CPF Singapore Contribution Rates in 2025?
Just like any other social security program around the world, there is also a CPF salary ceiling. In 2025, the monthly Ordinary Wage ceiling is S$7,400 (rising to S$8,000 in 2026). The annual ceiling remains at S$102,000. For employees under 55, the total rate is 37% (Employer 17% / Employee 20%).
- Younger employees have higher total contribution rates, so they can save up more for housing, education, and financial 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.
How to Calculate CPF Contributions in Singapore?
How do CPF Singapore contributions for employers work?
CPF in Singapore must be paid by the 14th of the following month, which means employers need to build a process to streamline calculation, filing, and payment to avoid receiving penalties. You can also read more on how employers' CPF contributions could impact payroll and cost structure.
4. Skills Development Levy (SDL) and 2025 Employer Contribution Rates
The Skills Development Levy (SDL) is a mandatory levy that employers need to pay for their employees working in Singapore, including foreign employees. The levy will be used towards supporting workplace upgrading programs and training grants when employees are sent for training.
What are the Rates for the Skills Development Levy (SDL) in 2025
The levy payable for each employee is at 0.25% of the monthly total wages. The minimum amount is S$2 for employees earning less than S$800 a month, and the maximum is S$11.25 for those who earn more than S$4,500 a month.
- Employee A: With a monthly wage of S$609, the SDL rate is S$2 (minimum rate).
- Employee B: With a monthly wage of S$2,000, the SDL rate is S$5 ($2,000 x 0.25%).
- Employee C: With a monthly wage of S$4,500, the SDL rate is S$11.25 (reaching the maximum rate).
- Employee D: With a monthly wage of S$4,620, the SDL rate is S$11.25 (capped at the maximum rate).
5. Additional Levies & Employer Contributions
In addition to CPF and SDL, there are also other contributions that employers might encounter when managing a team in Singapore:
- Foreign Worker Levy (FWL): Mandatory monthly levy for hiring non-citizens on Work Permits or S Passes. The rates vary and are primarily determined by the number of Work Permit and S Pass holders and the worker’s qualifications within the company. For each worker, the levy could range from S$200 to S$500 depending on the sector and skill level.
- Self-Help Group (SHG) Funds: Small monthly contributions for specific ethnic community funds, deducted via payroll. The SHG contribution rates also vary depending on the ethnic group the employee is in.
- Industry-Specific Levies: Certain sectors, such as the Marine Shipyard sector, may require additional payments to manage the overall foreign workforce and encourage higher-skilled work. For example, the Marine Shipyard sector is expected to see the dependency ratio ceiling drop to 75% from 77.8%.
6. Singapore Compliance Risks for Global Employers
Failing to manage the social contributions correctly can have serious consequences for you as an employer. Take the main CPF contributions as an example, the monetary penalties alone include:
- Late payment interest of 1.5% per month (18% per year), at S$5 minimum.
- Composition fine up to S$1,000 per offence.
- Up to S$5,000 fine or 6 months of jail time for first offences; higher for repeat cases.
- Extra admin fees for handling late payments.
- Administrative fees for late handling, potential blacklisting by the CPF Board.
Not complying with the regulations might also spark distrust from employees to question the company’s commitment to employee welfare, which could lead to further damage to the brand in Singapore’s tight labor market. Repeat offenders will also likely become the target of audits from the CPF Board and the Ministry of Manpower (MOM), causing unnecessary downtime and burden to the HR team.
7. How Slasify Helps Global Employers Stay Compliant
Foreign companies without a local HR team are especially at risk of violating social contribution compliance, as they may misinterpret CPF eligibility or SDL rules when the needs for a diverse team continue to grow. 
Slasify simplifies hiring in Singapore with a fully compliant Employer of Record (EOR) solution to help you stay clear of compliance risks:
- Trusted Employer of Record (EOR): Hire in Singapore without setting up a local entity, as Slasify takes full responsibility for overseeing social contribution enrollment, tax compliance, and payroll services in Singapore, while you focus on the day-to-day operations.
- Automated social contribution calculation: Automated social contribution calculations ensure CPF, SDL, and other levies are accurate, paid and filed on time, even with mixed teams of citizens, PRs, and foreign hires.
- Local compliance expertise: Our Singapore team offers advice and regularly monitors CPF, SDL, and any other Levy updates to keep you compliant at all times.
Why Social Contribution Compliance Matters in Singapore
FAQ: Mandatory Social Contributions in Singapore
1. Who Needs to Contribute to the CPF in Singapore?
CPF contributions are mandatory for Singapore Citizens and Permanent Residents earning more than S$50 per month. Foreign employees and contractors are not covered under CPF.
2. What are The Employer CPF Contribution Rates in 2025?
In 2025, for employees under the age of 55, the employers contribute up to 17% of their monthly wages, while the employees are responsible for 20% of the contribution. The employer CPF contribution rates change based on different age groups.
3. What are The Ceilings for The CPF Ordinary Wage and Additional Wage in 2025?
The Ordinary Wage ceiling in 2025 is S$7,400 per month, and the Annual Additional Wage ceiling remains at S$102,000. These caps limit the maximum CPF contributions payable.
4. How do CPF Contributions Affect Payroll Costs and Employee Take-Home Pay?
Employers must budget for their share of CPF contributions, which increases overall payroll costs. At the same time, employees see up to 20% of their wages deducted, reducing their net salary but boosting long-term savings.
5. Do Employers Need to Pay CPF Contributions for Foreign Employees or Contractors?
No. CPF does not apply to Employment Pass, S Pass, or Work Permit holders, nor to independent contractors. Instead, employers may need to pay other levies depending on the worker type.
6. What is the Skills Development Levy (SDL), and How Much do Employers Pay?
The SDL supports workforce training under the SkillsFuture framework. Employers contribute 0.25% of monthly wages, with a minimum of S$2 and a maximum of S$11.25 per employee each month.
7. What Happens if An Employer Misses CPF or SDL Contribution Deadlines?
Late or underpaid contributions attract 1.5% monthly interest (minimum S$5). Employers can also face fines of up to S$5,000 and, in severe cases, enforcement actions by the CPF Board or MOM.
8. Are FWL and SHG Contributions Mandatory in Singapore?
Employers may need to pay the Foreign Worker Levy (FWL) when hiring S Pass or Work Permit holders, with rates ranging from S$200–500 depending on sector and worker skills. Self-Help Group (SHG) funds are small voluntary deductions (S$1–10/month) for employees who belong to certain community groups, collected via payroll.
9. Can Foreign Companies without a Singapore Entity Hire Employees Compliantly?
Yes. Companies can use an Employer of Record (EOR) like Slasify to hire in Singapore without setting up a local entity. The EOR ensures full compliance with CPF, SDL, and other levies.
10. How can Slasify Help Simplify CPF & SDL Compliance and Payroll Services in Singapore?
Slasify provides automated payroll services and Employer of Record (EOR) solutions that calculate CPF and SDL accurately, submit contributions on time, and monitor regulation changes. This lets employers focus on business growth while staying fully compliant.
About Slasify
Founded in 2016 in Taiwan and now headquartered in Singapore, Slasify began with a vision. We saw the rapid expansion of businesses outpacing traditional work models. Inspired by the rise of the internet and the growing demand for flexibility, our founders created Slasify to bridge the gap between global businesses and remote talent. What started as a small team with a big dream has grown into a global powerhouse. Today, Slasify serves over 150 countries and operates in 130 currencies, empowering businesses to expand without borders. Read more!