The CPF, short for Central Provident Fund, is Singapore’s social security savings scheme that helps Singaporeans and Permanent Residents set aside savings. These savings can also be used for housing, healthcare, insurance, and certain investments. It is vital for different stages in a Singaporean’s life.
Both employers and employees make monthly CPF contributions. Your CPF contributions are automatically deducted from your wages. Your employer’s contribution will then be added to your contribution as well.
Are you having trouble navigating the new contribution rates? Here are the latest CPF contribution and allocation rates that Singaporeans and Permanent Residents should know.
What Is CPF?
The Central Provident Fund, also known as CPF, is the pillar of Singapore’s comprehensive social security system. It is a mandatory benefit account that meets the retirement, housing, and healthcare needs of Singaporeans. It is funded by contributions from employers and employees.
Here’s a quick guide:
- Withdrawal age: 55 years old
- Payout eligibility age: 65 years (for those born after 1953)
- CPF Basic Retirement Sum: This scheme provides you with monthly payouts when you retire to cover your basic living expenses.
What Can I Use It For?
You can think of CPF as forced savings that you put aside for retirement. However, you don’t have to wait until you’re 55 years old to tap into this fund. The CPF can be used for several purposes aside from retirement.
- Purchase property using CPF savings. Use your CPF money to pay for the downpayment or any home loan. You can also use it to pay for legal fees and stamp duty.
- Invest your CPF money. You can invest a portion of your CPF funds in ETFs, Unit Trusts, and more.
- Use CPF to enroll in education courses. You can also use your CPF money to pay for your child’s schooling via the CPF Education Scheme. However, you or your child must be enrolled in approved institutions.
- Pay medical bills. You can use your CPF MediSave account to pay for medical bills and hospitalization. On top of that, you can also use it to pay for the medical treatments of an immediate family member.
Changes From 1 January 2022
Effective on 1 January 2022, the contribution rates for Singaporean and SPR employees aged above 55 to 70 have been increased. These changes will apply to wages earned from 1 January 2022. This aims to strengthen their retirement adequacy. Read more on the 2022 CPF retirement sum.
For employees earning monthly wages of more than S$750, please refer to the table below:
| Employee Age (years) | Previous (% of wage) | CPF contribution rates changes from 1 Jan 2022 | ||
| Total (% of wage) | By employer (% of wage) | By employee (% of wage) | ||
| Above 55 to 60 | 26 | +2 | +1 | +1 |
| Above 60 to 65 | 16.5 | +2 | +1 | +1 |
| Above 65 to 70 | 12.5 | +1.5 | +0.5 | +1 |
(Source: Central Provident Fund Board website)
A few things to note:
- The increase in the contribution will be allocated to the employees’ Special Account. This will provide them with a bigger boost to their retirement income.
- If you’re earning a monthly wage between S$500 to S$750, the employee contribution will continue to be phased in.
- There are no changes to the graduated contribution rates for first and second-year SPRs.
Revised CPF Contribution Rates
The table below summarizes the contribution rates for Singapore Citizens and SPRs (from the 3rd year and onwards) from 1 January 2022.
| Employee Age (years) | CPF Contribution Rates from 1 Jan 2022 (monthly wages >$750) | ||
| – | Total (% of wage) | By Employer (% of wage) | By Employee (% of wage) |
| 55 & below | 37% | 17% | 20% |
| Above 55 to 60 | 28% | 14% | 14% |
| Above 60 to 65 | 18.5% | 10% | 8.5% |
| Above 65 to 70 | 14% | 8% | 6% |
| Above 70 | 12.5% | 7.5% | 5% |
For the complete CPF contribution rates, you’ll find the complete details here.
Example
To illustrate, let’s assume you’re a 30-year-old earning a monthly salary of S$6,000.
Every month, your CPF employee’s contribution is around S$1,200 which is 20% of your monthly salary. This amount will be deducted from your salary and deposited into your CPF account.
Your take-home pay after CPF deductions is S$4,800.
On top of your employee’s contribution, your employer will also pay an employer’s CPF contribution. This means they’ll pay an additional S$1,020 which is 17% of your monthly income.
The total amount deposited into your CPF account is S$2,220.
Frequently Asked Questions
Who Is Required To Make CPF Contributions?
All Singaporeans Citizens and Permanent Residents (SPRs) are required to make monthly contributions. You will also make or receive contributions as long as you are:
- Working in Singapore under a contract of service
- Employed under a permanent, part-time, or casual basis
I’m Self-Employed. Am I Still Required To Make Contributions?
For self-employed individuals, CPF contributions are voluntary. Only MediSave contributions are required if you earn an annual Net Trade Income of more than S$6,000.
What Are the Different Types of CPF Accounts?
All Singaporeans and PRs have the following CPF accounts:
- Ordinary Account (OA): These savings can be used for housing, higher education, and investing. The leftovers will be used for retirement.
- Special Account (SA): This is saved for retirement. It can also be used for investment to a certain degree.
- Medisave Account (MA): These savings are used to pay for hospitalizations, approved medical expenses, and MediShield/Integrated Shield plans.
- Retirement Account (RA): When you turn 55, a retirement account will be created. This will contain your OA and SA contributions and will serve as your retirement savings.
How Are My CPF Contributions Allocated to My CPF Accounts?
When you’re younger, a larger portion of your contributions will be allocated to your Ordinary Account (OA) to support your home purchases. But as you grow older, more contributions will go to your Special Account (SA) and MediSave Account (MA) to increase your retirement adequacy.
As you move to the next age group, the changes in allocation rates will be applied from the first day of the month after your birthday.
What Happens To CPF If You Leave Singapore?
If you choose to leave the country permanently and if you do not intend to return to the country for employment or residence, you can withdraw your CPF savings in full.
It’s important to note that if you withdraw all your CPF savings, you are not required to refund the savings you may have used.
What Is The CPF Contribution Cap For An Employee?
There is a limit to how much you can contribute to your CPF accounts every month. This is also known as the CPF Wage Ceiling. There are three main limits:
- Ordinary Wage Ceiling: This is a contribution cap on your monthly salary. It is currently capped at S$6,000. This means the first S$6,000 of your monthly income is subject to contributions.
- Additional Wage Ceiling: This is a CPF contribution cap on your additional wages, such as commissions, bonuses, leave pay, etc. This cap is currently at S$102,000 – Ordinary Wages subject to CPF for the year
- CPF Annual Limit: There is also a cap on your mandatory and voluntary CPF contributions on Ordinary Accounts, Special Accounts, and Medisave Accounts in a single year. The CPF annual limit is S$37,740.
These caps apply on a monthly basis for Ordinary Wage Ceiling and annual basis for Additional Wage Ceiling and CPF Annual Limit.
How Much Retirement Sum Do I Need?
For members who turn 55 in 2022:
- Basic Retirement Sum (BRS): S$96,000
- Full Retirement Sum (FRS): S$192,000
- Enhanced Retirement Sum (ERS): S$288,000
The BRS will be adjusted for future cohorts turning 55 to cater to long-term inflation and improvements in the standard of living.
What Are the CPF Interest Rates?
Did you know that the money in your CPF account will also earn interest? In fact, it earns much higher interest rates than typical bank accounts. Take a look at the table below for the interest rates for members below the age of 55.
CPF Interest Rates – 1 April 2022 to 30 June 2022
| Account name | Current interest rate |
| Ordinary Account | 2.5% |
| Special Account | 4% |
| Medisave Account | 4% |
| Retirement Account | 4% |
You can earn up to 5% on your first S$60,000 of combined CPF balances – capped at S$20,000 for OA.
For members aged 55 and above, here are the interest rates:
| Account name | Current interest rate |
| Ordinary Account | 2.5% |
| Special Account | 4% |
| Medisave Account | 4% |
| Retirement Account | 4% |
Up to 6% on the first S$30,000 of combined CPF balances – capped at S$20,000 for OA. Plus, up to 5% on the next S$30,000.
You can refer here for the complete details.
How Do I Contact the CPF?
- Through MyCPF: Use your Singpass to log into the my cpf Online Services portal. There, you will find information about your CPF account, such as account balance.
- Submit an inquiry: You can submit an inquiry through a form here.
- Call the CPF hotline: You can call 1800-227-1188 or +65-6227-1188 (if you’re calling from overseas). The phone line is accessible from Monday to Friday from 8am to 5:30pm.
- Visit in person: Lastly, you may also visit any of the five CPF Service Centres. However, you need to make an appointment. It is important to note that services for employers and self-employed are not available at the service centers.
Closing
To prepare for a financially stable post-retirement life, you need to be up-to-date with your CPF contributions. Although you can use your CPF savings for other purposes such as housing, higher education, and more, this savings scheme is ultimately set up to fund your retirement.
Key takeaways:
- There is an increase in CPF contribution rates that will take effect from 1 January 2022 to increase the strength of the members’ retirement adequacy.
- This change applies to employees aged above 55 to 70.
- For instance, an employee above 55 to 60 will have a total CPF contribution of 28% – an increase of 2%.
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