Central Provident Fund, CPF is a contribution system introduced to the Singaporean social security system on the 1st of July 1955. It started as a contribution system solely for savings towards retirement but was expanded to include savings for other needs like healthcare and housing.

The start of September 2023 marked the implementation of changes to the CPF contribution cap. If you are finding it a little difficult to understand your CPF contribution rate or you are looking for a CPF contribution calculator, this article will walk you through all you need to know.

Whether you are a citizen, a permanent resident, or an expat, this article would help you understand your CPF contribution, how it applies to your income and its benefits for your finances.

CPF Contribution Caps For 2023

Singaporeans and permanent residents who earn over $50 monthly are expected to make monthly CPF contributions.

The few people who are not mandated to make CPF contributions if they meet the exemption criteria include students, foreigners, domestic employees, seamen, and employees of the United Nations.

Earnings or payments that attract CPF contribution deductions include the basic wage, overtime pay, allowance, bonus, commission, and cash incentives.

Wages are classified into ordinary wages and additional wages and the CPF contribution cap for each wage varies by age and income level.

What is the CPF contribution limit for 2023? The current CPF limit for ordinary wages is $6,300. This means that where ordinary wages exceed $6,300, only this amount will be factored in for CPF contribution.

The increase was implemented by the Government to align with increasing wages and the retirement needs of Singaporeans considering the current life expectancy. The CPF limit for additional wages, however, remains $102,000.

How does this calculation play out in CPF contributions? Just like employees are mandated to pay a certain amount, employers also have the responsibility of ensuring these payments are made and a certain contribution rate is also expected of them.

How To Calculate Your CPF Contribution Rate? (Singaporean Citizens and Permanent Residents)

The CPF contribution rate for Singaporean citizens and third-year or over permanent residents is summarised in the table below:

Age of Employee	CPF Contribution by Employer	CPF Contribution by Employee	Total CPF contribution
55 years and below	17% of OW + 17% of AW	20% of OW + 20% of AW	37% of OW + 37% of AW
55 to 60 years	14.5% of OW + 14.5% of AW	15% of OW + 15% of AW	29.5% of OW + 29.5% of AW
60 to 65 years	11% of OW + 11% of AW	9.5% of OW + 9.5% of AW	20.5% of OW + 20.5% of AW
65 to 70 years	8.5% of OW + 8.5% of AW	7% of OW +7% of AW	15.5% of OW + 15.5% of AW
Over 70 years	7.5% of OW +7.5% of AW	5% of OW +5% of AW	12.5% of OW + 12.5% of AW

The abbreviations OW and AW represent ordinary wage and additional wage respectively. Also at 60 years and below, the employees' contributions to CPF are more than that of the employers but over 60 years, the reverse is the case.

Employees who earn $50 or less are not expected to make CPF contributions nor is anything expected of the employer. However, a wage of between $50 and $500 will be considered for CPF deductions. For employers to be mandated to make CPF contributions, employees must be earning over $500 monthly.

Where the CPF Board approves a joint contribution for early permanent residents, employees and employers will be allowed to make use of the contribution rate given above.

How To Calculate Your CPF Contribution Rate? (1st Year Permanent Residents)

There are fixed CPF contribution rates for 1st-year permanent residents under the graduated contribution rates. These rates depend on age and income level.

Age of employee	CPF Contribution by Employer	CPF Contribution by Employee	Total CPF contribution
55 and below	4% of OW + 4% of AW	5% of OW + 5% of AW	9% of OW + 9% of AW
55 to 60	4% of OW + 4% of AW	5% of OW + 5% of AW	9% of OW + 9% of AW
60 to 65	3.5% of OW + 3.5% of AW	5% of OW + 5% of AW	8.5% of OW + 8.5% of AW
65 and above	3.5% of OW + 3.5% of AW	5% of OW + 5% of AW	8.5% of OW + 8.5% of AW

For age groups below 55 and between 55 to 60, earnings between $50 and $500 per month have a CPF Contribution rate of 4% by the employees. The rate is reduced to 3.5% for ages 60 and above. The employer CPF contribution rate where earnings fall between $500 and $750 is 0.15% of (TW-500).

Note: TW means Total Wage. AW is the additional wage and OW is the ordinary wage.

In the full employer and graduated employee CPF contribution rate calculation, the employer will pay the same rate that is paid to a third-year and above resident while the employee rate remains at the given graduated rate.

How To Calculate Your CPF Contribution Rate? (2nd Year Permanent Residents)

The CPF contribution rate under the graduated contribution rate for 2nd-year permanent residents is given below.

Age of employee	CPF Contribution by Employer	CPF Contribution by Employees	Total CPF contribution
55 and below	9%	15%	24%
55 to 60	5.5%	12.5%	18%
60 to 65	3.5%	7.5%	11%
65 and above	3.5%	5%	8.5%

Note that the contribution is calculated by finding the percentage amount for the ordinary wage and additional wage, for example, 24% of OW + 24% of AW.

Employees who earn less than $500 but more than $50 are entitled to CPF contributions by their employer in the rates of 9%, 6%, 3.5%, and 3.5% for age groups 55 and below, 55 to 60, 60 to 65, 65 and above, respectively.

These rates see an increase of 0.45% of (TW - $500), 0.35% of (TW - $500), 0.225% of (TW - $500), and 0 15% of (TW - 500) for age groups 55 and below, 55 to 60, 60 to 65, 65 and above, respectively.

Also, in the full employer and graduated employee CPF contribution rate calculation, the employer will pay a rate similar to what is paid to a third-year and above resident while the employee rate remains at the stipulated graduated rate.

How To Use a CPF Contribution Calculator?

You can make use of the CPF contribution calculator by the CPF board in calculating your contribution. All you have to do is go to the website, and enter your details like age, monthly income, CPF account type, and rates for you and your employer.

The details given will be used in calculating the contribution and a breakdown will be displayed afterwards. You can then choose to save or print it.

CPF Contributions For Expats

Permanent residents in Singapore are required to contribute to CPF, but expats or foreigners are exempted. If an expat wants to contribute to the CPF, they can do so voluntarily through the Supplementary Retirement Scheme (SRS). However, there is no requirement for expats to contribute to the CPF at all.

Conclusion

CPF Contributions typically attract interest rates on an annual basis. This allows Singaporeans and Permanent residents to grow their money as they save it for their healthcare, housing or retirement goals. These contributions are beneficial as they aid financial planning for both employees and employers.

If you have any trouble understanding the requirements of the CPF contribution or how it works, a financial planner like TallRock Capital can walk you through the process and provide all the guidance you need.

CPF Contribution Caps In 2023: A Comprehensive Guide For Singaporeans, Permanent Residents, and Expats