In response to rising wages and the growing need for enhanced retirement security, the Singapore government has announced important CPF contribution changes starting from 1 January 2026.
These adjustments will affect the Ordinary Wage ceiling and the contribution rates for employees aged 55 and above. This article provides a detailed overview of the changes and what employees and employers can expect.
1. Increase in CPF Ordinary Wage Ceiling
Starting 1 January 2026, the CPF Ordinary Wage (OW) ceiling will increase from $7,400 to $8,000. The Ordinary Wage ceiling defines the maximum monthly salary that attracts CPF contributions.
This increase ensures that Central Provident Fund contributions remain in line with rising wages, thus helping employees accumulate more savings for their retirement.
Timeline of CPF Ordinary Wage Ceiling Increases:
The increase in the OW ceiling took place gradually over a few years as outlined in the table below:
| Period | CPF OW Ceiling | CPF Annual Salary Ceiling |
|---|---|---|
| 1 Jan 2016 to 31 Aug 2023 | $6,000 | $102,000 |
| 1 Sep 2023 to 31 Dec 2023 | $6,300 (+$300) | $102,000 |
| 1 Jan 2024 to 31 Dec 2024 | $6,800 (+$500) | $102,000 |
| 1 Jan 2025 to 31 Dec 2025 | $7,400 (+$600) | $102,000 |
| 1 Jan 2026 | $8,000 (+$600) | $102,000 |
Note: The increase in the OW ceiling ensures that employers and employees can adjust to the changes over time.
Key Points:
- The CPF annual salary ceiling will remain unchanged at $102,000.
- The Additional Wage ceiling and Central Provident Fund Annual Limit will also remain the same.
2. Increase in CPF Contribution Rates
From 1 January 2026, there will also be a rise in Central Provident Fund contribution rates for employees aged 55 to 65. These changes are designed to boost retirement savings for senior workers.
Breakdown of CPF Contribution Rate Changes:
For employees earning monthly wages above $750, the total Central Provident Fund contribution rate will be increased as follows:
| Employee’s Age (Years) | 2025 CPF Contribution Rate | 2026 CPF Contribution Rate | Employer Contribution | Employee Contribution |
|---|---|---|---|---|
| 55 and below | 37% | 37% | 17% | 20% |
| Above 55 to 60 | 32.5% | 34% (+1.5%) | 16% (+0.5%) | 18% (+1%) |
| Above 60 to 65 | 23.5% | 25% (+1.5%) | 12.5% (+0.5%) | 12.5% (+1%) |
| Above 65 to 70 | 16.5% | 16.5% | 9% | 7.5% |
| Above 70 | 12.5% | 12.5% | 7.5% | 5% |
Key Points:
- The increase in contribution rates for employees aged 55 to 65 will be fully allocated to their Retirement Account (RA) until the Full Retirement Sum (FRS) is reached.
- If employees have already met the FRS, the contributions will be directed to their Ordinary Account.
This change is designed to ensure that senior employees accumulate sufficient funds in their Retirement Account, improving their financial security in the long run.
3. Impact on Employees Earning Between $500 and $750
Employees who earn monthly wages between $500 and $750 will see their employee contribution rates continue to be phased in. This gradual increase ensures that employees are better prepared for higher contributions in the future.
4. No Change for Singapore Permanent Residents (SPRs)
There will be no changes to the graduated contribution rates for first and second-year Singapore Permanent Residents (SPRs). These rates will remain the same, ensuring that SPRs are integrated into the CPF system according to the existing guidelines.
The CPF contribution changes from 1 January 2026 represent a significant shift towards strengthening the retirement savings of Singaporean workers, particularly seniors.
These adjustments aim to ensure that employees of all ages benefit from a robust Central Provident Fund system that supports their long-term financial security.
FAQs
What is the CPF Ordinary Wage ceiling and why is it increasing in 2026?
The Central Provident Fund Ordinary Wage ceiling is the maximum monthly salary that attracts Central Provident Fund contributions. In 2026, it will rise from $7,400 to $8,000 to align with the increasing wage levels, ensuring that employees contribute more towards their retirement savings.
How will the CPF contribution rate changes affect employees aged 55 to 65?
For employees aged 55 to 65, Central Provident Fund contribution rates will increase by 1.5%, with the increase fully allocated to their Retirement Account until the Full Retirement Sum is reached. This change aims to enhance retirement adequacy for senior workers.
Are there any changes to the CPF Annual Salary Ceiling?
No, the Central Provident Fund Annual Salary Ceiling will remain unchanged at $102,000. This ceiling sets the maximum amount of Central Provident Fund contributions payable for all wages received in the year.