What Are the CPF Contribution Rate Changes in 2026?
Employers and companies in Singapore are supposed to account for multiple CPF changes when it comes to processing the payroll of employees from 1st January, 2026. The main updates are rising CPF contribution rates for employees aged between 55 and 65, with an increase in CPF OW (Ordinary Wage) from 7400 SGD to 8000 SGD monthly.
These differences influence the company’s CPF costs, calculation of payroll, and the cost deducted from the salaries of the employees.
What Is the CPF Rate for January 2026?
The standard CPF contribution rate for 2026 for Permanent Residents and Citizens of Singapore for their third year onwards is:
- For those below age 55, the CPF contribution for the employer is 17%, and for the employee is 20%, which makes the total CPF contribution 37%
- For ages ranging from 55 to 60, the CPF is 16% for the employer and 18% for the employee, and the total CPF becomes 34%
- For ages between 60 and 65, the CPF for employer and employee is the same, which is 12.5%, making it 25% total CPF
- For ages between 65 and 70, it is 9% for the employer and 7.5% for the employee, making it 16.5% in total
- For ages above 70, the CPF for the employer is 7.5%, and for the employee, it is 5%, making it 12.5% in total
The significant difference is for employees aged between 55 and 65, making the total CPF contribution rise by 1.5% from 1st January 2026. The employee side is raised by 1.0%, whereas the employer side is raised by 0.5 percentage points.
What is the CPF Ordinary Wage Ceiling for 2026?
The CPF Ordinary Wage Ceiling for 2026 is 8000 SGD per month. It reflects that CPF contributions are generally calculated only up to 8,000 SGD per month on Ordinary Wages. It increased from 6000 SGD in 2023 to 7400 SGD in 2025, and now 8000 SGD in 2026.
Example
Let us consider an employee aged between 40 and 45 and earning 10,000 SGD monthly. The contribution of the employee is not calculated on the full 10,000 SGD of ordinary wages. The monthly ordinary wage subject to CPF is 8000 SGD.
According to the standard CPF rates, the employer CPF is 17% of 8,000 SGD and employee CPF is 20% of 8,000 SGD, which is 1360 SGD and 1600 SGD, respectively, generating a total CPF of 2960 SGD.
The remaining 2000 SGS of monthly salary is above the ceiling of Ordinary Wage, which is not subject to CPF as OW.
Why Is There a Need to Update Payroll in 2026 by Employers?
The update means employers are supposed to set their CPF contributions, payroll software, and salary calculations for employees affected by the new rates. A system of payroll that continues using the rates of 2025 could result in wrong contribution of employers and deduction of employees.
Employers are supposed to review employees who cross the ages of 55, 60, and/or 65 since the applied CPF contribution relies on the age group.
The main items to update in the payroll in 2026 are citizenship, PT status, age, monthly wage, OW ceiling, and additional wage ceiling. The payroll software is supposed to be submitted to present 8000 SGD ordinary wage ceiling from January 2026.
Practical Example
Suppose an employee receives 8000 SGD of CPF contribution subject to OW every month; the overall annual ceiling of 102000 SGD can be reached through OW with no Additional Wage ceiling. If an employee is earning less, the available AW ceiling depends on their actual CPF contribution of OW for this year. This becomes important when processing annual bonuses for employees.
When Employers Pay CPF Contribution?
The contribution of CPF is due by last day of every month. Failure to pay the due amount by the 14th of the following month could result in enforcement action. The late payment charges are charged at 1.5% per month, subject to applicable rules.
Is There Any Support For Employers Facing Higher Costs of CPF?
Yes, employers receive a CPF contribution Offset for 2025 to offset half of the raise in employer CPF contribution for affected senior workers aged between 55 and 65.
Call to Inquire
We, at FAST ACCOUNTING, are here to assist businesses in Singapore with CPF calculations, payroll processing, and ongoing compliance for accounting. We have experienced professional who help in reviewing your payroll setup earlier which can help by ensuring that changes in the CPF contribution for employers in Singapore are precisely presented throughout the year. Reach to us today to learn more about our professional services while you can focus on your core business operations.
