8 Important CPF Information You Need To Know

The Central Provident Fund, or CPF, is an integral part of workers’ livelihoods. Every month, bosses have to set aside a portion of their salary for CPF contribution. Yet, people have always been so inquisitive about the concepts of CPF – whether you can touch them or not. Why is it that people often say that it is money that you cannot touch? Read the 8 most important CPF information you need to know!

What Is CPF

CPF is a mandatory savings plan for all Singaporeans and PRs. 20% of your salary will be deducted to contribute to your CPF account. Your employer will contribute an additional 17% of your salary as well. From the illustration below based on a $2,000 salary, the extra contribution from your employer is very sweet, indeed!

Read about the easy CPF calculation methods

CPF Contribution Rates To Raise From 2023 Onwards For Older Workers

For employees between the age of 55 and 60, the total contribution towards CPF will raise by 1.5%.

14.5% will come from employer (a raise of 0.5% from previous rate) and 15% will come from employee (a raise of 1% from previous rate).

The increase of CPF contribution rates will be fully set aside to the Special Account to provide further boost to their retirement needs.

For more information, please refer to

CPF Use For New Home Dream

CPF can be used for many things, such as paying for your medical bills and purchasing your BTO flat. The 3 different accounts in your CPF are catered for different purposes. You have the Ordinary Account (OA), Special Account (SA) and Medisave Account (MA) is for your medical expenses while the Ordinary Account can be used to pay for your HDB, education, insurance and more. Lastly, the Special Account is for your retirement.

The contribution amount to your CPF will be allocated to these 3 accounts based on your age. For instance, if you are 21 year’s old, you will contribute more to your OA whereas a 63 year’s old man will contribute more to his MA.

If you are a first-time BTO buyer with a HDB loan, you have the option of using up all of your CPF OA savings or setting aside up to $20,000 for future needs. 

CPF Has A Contribution Cap

As mentioned, there is a 20% deduction from your salary that will be contributed to your CPF. However, there is a cap of $6,000 that this will apply to. For instance, if you earn $10k, the 20% contribution will be only from $6,000.

Instead of contributing $2000 (20% of 10k), you will only be contributing $1,200 (20% of $6,000)!

Contribution to CPF Reduces As You Age

As you get older, your contribution will decrease significantly.

At the age of 55 to 60 years old, the contribution from both you and your company will reduce to 13% each.

And between 60 to 65 years old, you will contribute 7.5%, whereas your company will contribute 9%.

After the age of 65 years old, you will contribute 5%, while your company will contribute 7.5%.

Self Employed Need To Contribute Medisave

If you are self-employed, you are required to contribute to your Medisave account yearly. The contribution amount is dependent on your net trade income which is your gross trade income less business expenses.

If the Inland Revenue Authority of Singapore (IRAS) did not issue you a Notice of Assessment (NOA)/Non-tax advice, you must declare your NTI with the CPF Board. You do not need to declare your income to the CPF Board if you have already declared it with IRAS.

Part Time Workers Are Also Entitled To CPF

As long as your pay is more than $750 per month, the same rule applies.

CPF is not applicable only if you earn less than $500.

If you earn less than $500, your company will still be required to contribute to your CPF.

You can only escape the clutches of CPF when you earn less than $500, and even then you will still get a contribution but it will be from the company.

However, if your pay is between $500 to $750, then it is quite tricky.


But Interns Are Not Entitled To CPF

If you started out in the workforce as an intern, you would have noticed that you didn’t get any contribution.

Interns get an “allowance” instead of a monthly salary so CPF is not applicable here.

Bonuses, Allowances And Sales Commissions Need CPF Too

Bonuses or allowances are subjected to a 20% contribution as well.

So if you have a transport allowance of $20 per month, $4 of it will go to your CPF account.

So How

CPF rules also apply to many other walks of life, as long as you are working under the jurisdiction of MOM in Singapore. We know that calculation of CPF for the employees monthly is a cumbersome and painful process.

However, it is inevitable to factor in the extra 20% consideration of employees’ salaries on CPF, even if the employee is only a temporary worker. And even small errors of $10 can be a disputable cause if employees file a complaint over miscalculations.

Well, the good thing to hear now is that Jusixty is able to help you create your CPF calculation with ease! Get in touch with us to find out how we can help you.