What Singapore Employers Need to Know About CPF Contribution Changes in 2026
Sep 30, 2025
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Starting January 1, 2026, Singapore will implement significant changes to the Central Provident Fund (CPF) contribution rates, particularly affecting employees aged above 55 to 65. These adjustments aim to enhance retirement adequacy for senior workers.
Key Changes Effective January 2026
1. Increased CPF Contribution Rates for Senior Employees
For employees earning monthly wages above $750, the CPF contribution rates will be adjusted as follows:
Aged above 55 to 60:
Employer: Increase from 15.5% to 16%
Employee: Increase from 17% to 18%
Total: Increase from 32.5% to 34%
Aged above 60 to 65:
Employer: Increase from 12% to 12.5%
Employee: Increase from 11.5% to 12.5%
Total: Increase from 23.5% to 25%
These increases are designed to bolster the retirement savings of senior employees.
2. Allocation of Increased Contributions
The additional contributions for employees aged above 55 to 65 will be fully allocated to their Retirement Account (RA), up to the Full Retirement Sum (FRS). If the FRS has been met, the excess contributions will be directed to the Ordinary Account (OA).
3. Support for Employers: CPF Transition Offset (CTO)
To mitigate the impact on business costs, the government will provide a CPF Transition Offset (CTO) to employers. This offset will cover half of the increase in employer CPF contributions for employees aged above 55 to 65. The CTO will be automatically disbursed, requiring no additional action from employers.
4. Increase in CPF Ordinary Wage Ceiling
The CPF Ordinary Wage (OW) ceiling will rise to $8,000 from January 1, 2026, up from the current $7,400. This change means CPF contributions will apply to a higher portion of employees' monthly wages, potentially increasing the overall CPF contributions for higher-earning employees.
Implications for Employers
Payroll Adjustments: Employers should review and update their payroll systems to accommodate the new CPF contribution rates and wage ceiling.
Budget Planning: The increased employer contribution rates may affect labor costs. Employers should factor in these changes when planning budgets for 2026 and beyond.
Employee Communication: It's essential to inform employees about these changes, especially those in the affected age groups, to help them understand the impact on their take-home pay and retirement savings.
How We Can Help
Navigating CPF changes can be complex, but you don't have to do it alone. At CR Consultancy Pte Ltd, we offer comprehensive payroll and accounting solutions to ensure your business remains compliant with the latest regulations.
As a certified Xero Partner, we can assist in integrating these changes seamlessly into your existing systems, providing real-time updates and support.
Contact us today to learn more about how we can support your business through these CPF changes and beyond.
