In Singapore, employers who employs local staff (Singaporean citizen and foreigner granted the permanent residency status – PR) must contribute CPF monthly; the amount of CPF due depend on (i) the total salary (ordinary wages + additional wages) of the employee concerned; and (ii) the age of the employee concerned.
Starting from 1 January 2024, an increase in both the CPF monthly salary ceiling to be considered to compute the contribution, and the CPF contribution rates, will apply.
These changes follow the recent, previous changes of CPF contributions occurred in September 2023; all such changes were announced in the Singapore Budget 2023, and programmed to take place progressively, over four steps, to allow employers and employees to adjust to the increase. The increase will be completed by 2026.
We summarize here below the upcoming changes.
- CPF SALARY CEILING
Currently, CPF is calculated on the salary of the employee, with a maximum threshold of 6,300 Sgd / month and with a total annual ceiling of 102,000 Sgd.
Starting from 1 January 2024, the new threshold will be:
- Monthly ordinary wage: CPF is calculated up to the first 6,800 Sgd / month,
- Total annual ceiling: 102,000 Sgd (no changes).
Moreover, the CPF board will progressively raise the said monthly threshold ceiling, provided that the total annual ceiling (102,000 Sgd) will remain unchanged:
Therefore, from 1 January 2024, the CPF contributions due will be calculated based on the revised threshold above.
- CPF CONTRIBUTION RATES
The CPF rates applicable to employer’s and employee’s contribution will be increased regarding those employees aged between 55 to 70 years old, to strengthen their retirement adequacy.
The revised rates will apply to wages earned from 1 January 2024, as follows:
Lastly, it must be noted that, based on the current changes’ rule, the above-mentioned revision of CPF rates will not affect the current contribution rates for first- and second-year Singapore Permanent Residents.
Please contact our professionals in Singapore for more information.
Asian Tax Advisory Singapore:
Tel: (65) 6980 5627
Tel: (65) 6980 5627
600 North Bridge Road
# 13-05 Parkview Square