- within Employment and HR and Family and Matrimonial topic(s)
- with Senior Company Executives and HR
Why This Matters?
The Singapore Government continues its measured approach to CPF reforms to strengthen retirement adequacy, while giving businesses time to adjust. From 1 January 2026, employers will see the final phase of changes to CPF wage ceilings and contribution rates. Early payroll readiness is critical to avoid compliance risks and operational issues.
Key Change 1: CPF Ordinary Wage (OW) Ceiling Increase
The CPF Ordinary Wage (OW) ceiling will increase to SGD 8,000 per month, up from SGD 7,400 in 2025.
No Changes to:
- CPF Annual Salary Ceiling: SGD 102,000
- Additional Wage (AW) Ceiling
- CPF Annual Limit: SGD 37,740
Key Change 2: CPF Rate Increase for Senior Employees
CPF contribution rates will increase for employees aged above 55 to 65 for wages earned from 1 January 2026.
Revised CPF Contribution Rates:
- Age >55 to 60: Total CPF 34% (Employer 16%, Employee 18%)
- Age >60 to 65: Total CPF 25% (Employer 12.5%, Employee 12.5%)
CPF rates remain unchanged for employees aged 55 and below, those aged 65 and above, and first- or second-year SPRs under graduated rates.
Where do the Additional CPF Contributions Go?
The increased CPF contributions for employees aged between 55 and 65 will be credited to the Retirement Account (RA) up to the Full Retirement Sum (FRS). Any excess contributions will be credited to the Ordinary Account (OA).
What Employers Should Do Now?
- Review payroll systems to reflect the updated OW ceiling
- Assess cost implications for senior employees
- Plan employee communications around CPF and net pay changes
- Ensure payroll processes are fully compliant from January 2026
Our Comments
CPF compliance remains an area where even minor payroll inaccuracies can lead to penalties, rework, and employee dissatisfaction. With the final phase of CPF changes taking effect from January 2026, early preparation is essential. Employers who proactively review payroll configurations, assess cost impacts, and communicate changes clearly to employees will be better positioned to manage compliance smoothly. Accurate payroll processing and timely system readiness remain the most reliable safeguards against regulatory risk.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
