Singapore's mandatory savings scheme for employees
The Central Provident Fund, or CPF, is Singapore's national savings scheme. It helps working Singaporeans and Permanent Residents save for retirement, healthcare, and housing. Think of it as a government-managed savings account that both employers and employees contribute to every month.
If you employ Singapore Citizens or Permanent Residents, you are required by law to make CPF contributions for them. Understanding CPF is essential for running payroll correctly and staying compliant.
Who Needs to Contribute
CPF applies to:
- Singapore Citizens working in Singapore
- Permanent Residents working in Singapore
CPF does not apply to foreigners on work passes such as Employment Pass, S Pass, or Work Permit holders. These employees are exempt from CPF contributions.
How CPF Works
Every month, both the employer and employee contribute a percentage of the employee's salary to CPF. The employer calculates the total contribution, deducts the employee's share from their salary, adds the employer's share, and submits the combined amount to the CPF Board.
For example, if an employee earns $4,000 per month:
- The employee's share is deducted from their salary
- The employer adds their own contribution on top
- The total amount is submitted to CPF by the employer
What CPF Savings Are Used For
CPF savings are split into three accounts, each serving a different purpose:
- Ordinary Account (OA) can be used for housing, insurance, investment, and education.
- Special Account (SA) is set aside for retirement and investment in retirement-related products.
- MediSave Account (MA) covers hospitalisation, medical insurance, and approved healthcare expenses.
When employees reach retirement age, their savings provide a monthly income through the CPF LIFE scheme.
Employer Responsibilities
As an employer, you are responsible for:
- Calculating the correct CPF contributions for each employee based on their age and salary.
- Deducting the employee's share from their monthly wages.
- Paying both the employer and employee portions to the CPF Board.
- Submitting contributions by the 14th of the following month.
How Officaid Helps
Officaid simplifies CPF compliance for employers. When you process payroll, Officaid automatically calculates the correct CPF contributions based on each employee's age, salary, and residency status. The amounts appear on the payslip, and you can submit directly to CPF through Officaid's integration.
Frequently Asked Questions
Yes, if they are Singapore Citizens or Permanent Residents earning more than $50 per month. CPF contributions are based on wages, not the number of hours worked.
Foreigners on work passes are not covered by CPF. You do not need to make CPF contributions for them. However, they may choose to save through the Supplementary Retirement Scheme (SRS) on their own.
CPF contributions are due by the 14th of the month following the payment of wages. For example, salaries paid in January must have CPF submitted by 14 February.
Yes. Officaid uses the latest CPF contribution rates and calculates the correct amounts for each employee based on their age and salary. You do not need to calculate manually.
Official Resources
For the latest information on CPF regulations, visit these official government websites:
What's Next?
Learn more about CPF and payroll compliance in Singapore:
- How CPF Rates Work explains contribution rates based on age and salary.
- What is IRAS covers Singapore's tax authority and employer obligations.
- What is One Stop Payroll (OSP) explains how Officaid submits to government agencies.