What is CPF?

The Central Provident Fund (CPF) is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, home ownership, family protection, and asset enhancement.

How does the CPF system work?

Both employees and employers make monthly CPF contributions. These contributions go into three accounts:

Uses of CPF Savings
Ordinary AccountFor housing, insurance, investment and education.
Special AccountFor old age and investment in retirement-related financial products.
MediSave Account​​For hospitalisation expenses and approved medical insurance.
Retirement Account (RA)On the member’s 55th birthday, a fourth account, the Retirement Account (RA), is automatically created

Employees

An employee is:

  • any Singapore Citizen or Singapore Permanent Resident who is employed in Singapore under a contract of service by an employer otherwise than as a master, a seaman or an apprentice in any vessel; or
  • any Singapore Citizen who is employed under a contract of service or other agreement entered into in Singapore as a master, a seaman or an apprentice in any vessel where the owners have not been exempted from the provisions of the CPF Act.

Employees can include:

  • Company directors
  • Employees on concurrent employment
  • Family workers
  • NSmen on in-camp training
  • Part-time employees
  • Temporary / casual employees

Find out more about for whom you need to pay CPF contributions (PDF, 0.3MB).

Exceptions to Payment of CPF for Employees

CPF contributions are exempted for the following classes of employees: 

1. Certain classes of student employees.

2. Foreigners on Employment Pass, S Pass, Miscellaneous Work Pass or Work Permit

3. Domestic employees whose domestic employment does not exceed 14 hours in any week

4. Employees of the United Nations Organisation, or any agency or institution of the United Nations Organisation stationed in Singapore

5. Seamen who are Singapore Citizens and are employed

  • in a Swedish ship on terms and conditions of service applicable to Swedish seamen;
  • in a Norwegian ship on terms and conditions of service applicable to Norwegian seamen; or
  • by the East Asiatic Co. Ltd. of Denmark on terms and conditions of the agreement between the Danish Shipowners’ Association and the Seamen’s Union in Denmark.

6. Employees who are employed by the General Conference Corporation of Seventh Day Adventists under a contract of service or other agreement entered into outside Singapore and who is not domiciled in Singapore.

CPF contributions are not payable for the following classes of employees: 

1. Employees working overseas

2. Seamen who are Singapore Permanent Residents

3. Seamen who are Singapore Citizens whose contract of service or other agreement is entered into outside of Singapore.

Employers

An employer can be:

  • any person, company, association or body of persons, whether or not incorporated, by whom an employee is employed;
  • the owners of any vessel on which an employee is employed; or
  • any manager, agent or person responsible for the payment of wages to an employee, on behalf of an employer.

Employer Responsibilities

Register as an Employer

Employers should apply to e-submit their CPF contribution details using the CPR e-Submit@web. The entity’s SingPass/CorpPass and Unique Entity Number (UEN) are needed for the application.

Notification of Change of Information

Employers need to inform the CPF Board when there are changes to the following:

  • Change of Company’s Principal Place of Business (PPB) / Contact details
  • Change in business entity
  • Change in company’s name

Collect the employees’ share of CPF contributions

The employer collects the employees’ share of CPF contributions when paying his/her wages for the month.

Pay the CPF contributions

Employers are to given a grace period of 14 days to pay the CPF contributions after the end of the month for which CPF contributions are due.

CPF Contribution and Allocation Rates

CPF contributions are payable at the prevailing CPF contribution rates for employees who are Singapore Citizens and Singapore Permanent Residents (SPR).

Information about the applicable CPF Contribution and Allocation Rates can be accessed here.

CPF Contribution Rates Table (from Jan. 1, 2016)

CPF Allocation Rates Table (from Jan.1, 2016)

Factors Affecting the CPF contribution and allocation rates

The CPF contribution rate applicable for an employee depends on his:

  • citizenship – Singapore Citizen or SPR in the first and second year or from the third year of obtaining SPR status;
  • age group; and
  • total wages for the calendar month. 

Unlike contribution rates, the allocation rates applicable for your employee depend on his employee type and age group.

Recovering Employees’ Share of CPF Contributions

The employer can recover the employees’ share of CPF contributions when paying his/her wages for the month.

Contribution Payment Period

There is a grace period of 14 days to pay the CPF contributions after the end of the month for which CPF contributions are due. If the last day of the grace period falls on a Saturday, Sunday or Public Holiday, CPF must be paid by the next working day.

Interests on Late Payments

The CPF board’s computerised system detects defaulting employers and lists them out each month for follow-up action by the Investigative Officers. Interest on late payment and a composition amount may be imposed on defaulting employers.

  • When contributions are paid late, interest is calculated daily at the rate of 1.5% per month, starting from the first day of the following month after the contribution are due. For example. interest for January will be calculated from 1 February).
  • The minimum payable interest is $5 per month.

Penalties for Non-compliance with the CPF Act

It is a criminal offence under the CPF Act for late or non-payment of CPF contributions.

  • A composition offer is given to encourage defaulting employers to pay the CPF contribution and to settle the late payment offence out of court.
  • After the composition offer deadline, legal action will be taken against employers who do not settle the CPF arrears and compound the offence out of court.

Penalties:

1. Late payment interest charged at 18% per annum (1.5% per month)

2. Composition amount of up to $1,000 per offence

3. Up to $5,000 court fine and no less than $1,000 per offence and/or up to 6 month’s imprisonment for 1st conviction

4. Up to $10,000 fine and no less than $2,000 per offence and/or up to 12 month’s imprisonment for subsequent convictions

If employers deduct the employees’ share of CPF contributions from their employees’ wages and failed to submit the CPF contributions to the Board, the may be subjected to:

  • Up to $10,000 court fine and/or up to 7-year imprisonment.