CPF Contribution Rate 2025: Is 37% for most Singaporeans too much?
For most Singaporeans under 55, 20% is deducted from their salary. And their company contributes 17%.
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The Central Provident Fund (CPF) is a compulsory savings scheme in Singapore that helps its citizens and permanent residents save for their retirement, healthcare, and housing. Think of it as a personal, lifelong savings account that you and your employer contribute to.
CPF Introduced by British Colonial Government
The idea for the CPF came about during the British colonial period in Singapore. It was officially established in 1955, initially as a way to provide financial security for workers in their old age. The scheme was a response to the growing number of elderly poor who had no means of support after they stopped working. The British government saw it as a way to ensure that people would have a basic safety net.
‘Forced Savings’
The CPF exists because the government wants to make sure that everyone has a solid financial foundation for their future. By making contributions mandatory, the system ensures that people save regularly, even if they might not be disciplined enough to do so on their own. This prevents a situation where a large part of the population is left with no savings and becomes a burden on the state or their families in their later years.
CPF is a Retirement Fund
Essentially, the purpose of the CPF is to provide a comprehensive social security safety net. It serves several key purposes: it’s a retirement fund to give you a regular income in your old age; a healthcare savings account to help you pay for medical expenses; and a way to finance the purchase of a home.
The CPF Contribution Rate is the percentage of a person’s monthly wage that is paid into their Central Provident Fund accounts. This contribution is a joint effort between the employee and their employer. A portion is deducted directly from your salary, and your company also pays a portion. The total of these two contributions forms the CPF Contribution Rate.
This is a simple way to understand the CPF Contribution Rate in 2025 for all age groups.
| Your Age | Company (% of salary) | You (% of salary) | Total (% of salary) |
|---|---|---|---|
| Age 55 and younger | 17% | 20% | 37% |
| 55 - 60 | 15.5% | 17% | 32.5% |
| 60 - 65 | 12% | 11.5% | 23.5% |
| 65 - 70 | 9% | 7.5% | 16.5% |
| 70 and older | 7.5% | 5% | 12.5% |
The rate changes depending on your age, as the purpose of the savings shifts throughout different life stages. For example, a younger worker will have a higher proportion of their savings go towards their housing and general savings accounts, while an older worker will see a larger portion directed to their retirement and healthcare savings.
CPF OA SA MA Allocation Rates
The CPF allocation rates for the Ordinary Account (OA), Special Account (SA), and Medisave Account (MA) are aligns with your changing financial needs across your lifespan, following the objectives of the CPF system: Housing, Healthcare, and Retirement. The key rationale is the shift in priority from immediate or near-term needs (like housing) to long-term needs (like retirement and healthcare) as a person ages.
If you were to take your total CPF salary contribution amount, you can multiply them by these numbers to get your CPF OA, SA, and MA allocation amounts.
| Your Age | Ordinary Account | Special Account (or Retirement Account after age 55) | MediSave Account |
|---|---|---|---|
| 35 & below | 0.6217 | 0.1621 | 0.2162 |
| 36 - 45 | 0.5677 | 0.1891 | 0.2432 |
| 46 - 50 | 0.5136 | 0.2162 | 0.2702 |
| 51 - 55 | 0.4055 | 0.3108 | 0.2837 |
| 56 - 60 | 0.3694 | 0.3076 | 0.3230 |
| 61 - 65 | 0.149 | 0.4042 | 0.4468 |
| 66 - 70 | 0.0607 | 0.303 | 0.6363 |
| Above 70 | 0.08 | 0.08 | 0.84 |
If you noticed, the most significant factor is age. The older you are, the lesser CPF money goes to your Ordinary Account (for HDB loan etc.), while more goes to your Special Account (for savings), and MediSave Account (for healthcare).
Here are some examples on how to calculate your own CPF OA SA MA allocation.
$3,000 Monthly Salary (Example)
Let’s say if you earn $3,000 a month, your CPF Contribution Rate in 2025 will look like:
- Monthly Salary: $3,000
- Total CPF Contribution Rate: 37% ($3,000 x 37% = $1,110)
- Employee’s Share: 20% ($3,000 x 20% = $600)
- Employer’s Share: 17% ($3,000 x 17% = $510)
From your $3,000 monthly salary, a total of $1,110 will be contributed to your CPF accounts each month, with $600 coming from your own salary and $510 from your company. This amount is distributed amongst your three CPF accounts. Assuming you are aged 35 and below:
- Ordinary Account (OA): 0.6217 x $1,100 = $683.87
- Special Account (SA): 0.1621 x $1,100 = $178.31
- MediSave Account (MA): 0.2162 x $1,100 = $237.82
$5,000 Monthly Salary (Example)
Let’s say if you earn $5,000 a month, your CPF Contribution Rate in 2025 will look like:
- Monthly Salary: $5,000
- Total CPF Contribution Rate: 37% ($5,000 x 37% = $1,850)
- Employee’s Share: 20% ($5,000 x 20% = $1,000)
- Employer’s Share: 17% ($5,000 x 17% = $850)
From a monthly salary of $5,000, a total of $1,850 go to your CPF, with $1,000 coming from your own salary and $850 from your company. The money is then distributed among your three CPF accounts - Ordinary Account, Special Account, and MediSave Account, to serve different purposes like housing, retirement savings, and healthcare. Again, assuming you are under 35 years old:
- Ordinary Account (OA): 0.6217 x $1,850 = $1,150.145
- Special Account (SA): 0.1621 $1,850 = $299.885
- MediSave Account (MA): 0.2162 x $1,850 = $399.97
$8,000 Monthly Salary (Example)
In this case, the CPF Ordinary Wage (OW) Ceiling is a crucial factor. For 2025, the monthly OW ceiling is set at $7,400. This means that CPF contributions are only calculated on the first $7,400 of your monthly salary, even if you earn more. (Read more about the CPF wage ceiling below.)
- Monthly Salary: $8,000
- Amount subject to CPF contributions: $7,400 (due to the OW ceiling)
- Total CPF Contribution Rate: 37% (for employees aged 55 and below)
- Total CPF Contribution: $7,400 x 37% = $2,738
- Employee’s Share: 20% of the contributable wage ($7,400 x 20% = $1,480)
- Employer’s Share: 17% of the contributable wage ($7,400 x 17% = $1,258)
Out of your $8,000 salary, the total contribution of $2,738 is then allocated to your three main CPF accounts: the Ordinary Account (OA), the Special Account (SA), and the MediSave Account (MA). Let’s say you are 35 years old:
- Ordinary Account (OA): 0.6217 x $2,738 = $1,702.21
- Special Account (SA): 0.1621 x $2,738 = $443.83
- MediSave Account (MA): 0.2162 x $2,738 = $591.96
Is 37% CPF Contribution Rate too much?
Yes, we do take home much lesser in cash after CPF Contribution deductions. The most common criticism of CPF is the impact on an individual’s immediate finances. A 20% deduction from a person’s salary can significantly reduce their take-home pay, making it more challenging to meet day-to-day expenses, save for short-term goals, or invest in other assets. This can feel like a financial burden, especially for younger workers or those who are managing household expenses and raising a family.
While CPF is great for long-term goals, it’s not a liquid asset. This can be frustrating for people who face unexpected financial emergencies or who feel they could get better returns by investing the money themselves, although this comes with a higher risk.
However, the primary argument in favour of the high CPF Contribution Rate is that it ensures Singaporeans have a substantial nest egg for their future. This is particularly important for retirement, as the high rate helps to accumulate a significant amount in their Special and Retirement Accounts, which are designed for long-term savings.
The 37% CPF Contribution Rate isn’t just for retirement; a significant portion goes into the Ordinary Account for housing and the MediSave Account for healthcare expenses. This means the contributions are serving multiple crucial life needs, reducing the financial stress of buying a home and paying for medical care.
CPF Ordinary Wage Ceiling
The CPF Ordinary Wage Ceiling is a limit on the amount of a person’s monthly salary that is subject to CPF contributions. It ensures that CPF contributions are kept at a reasonable and sustainable level, particularly for higher-income earners. Without a ceiling, a person earning a very high salary would contribute a very large amount each month, which could be more than what is needed for their retirement, housing, and healthcare needs.
- $50 - $500 Monthly Salary: Company contribute only
- $500 - $750 Monthly Salary: Company contribute, you contribute a small amount
- $750 - $7,400 Monthly Salary: Company contribute, you contribute (normal rates)
- $7,400 & Higher Monthly Salary: Company contribute, you contribute (normal rates, until $7,400 in 2025)
$50 - $500 Monthly Salary
If you earn between $50 and $500, only the company contributes to CPF, and you don’t have to. This ensures that low-wage earners have more take-home pay.
$500 - $750 Monthly Salary
The contribution rates for employees earning less than $750 per month are different. For a monthly wage of $600, your contribution is a portion of the amount above $500.
- Monthly Salary: $600
- Company’s CPF Contribution: $600 x 17% = $102
- Your CPF Contribution: ($600 - $500) x $0.27 = $27
$750 - $7,400 Monthly Salary
For those earning a monthly wage of $750 and above, the full CPF contribution rate for their age group applies. This is the rate we discussed earlier, which is 37% for those aged 55 and below. This rate is applied to the employee’s monthly salary.
$7,400 & Higher Monthly Salary
This is where the CPF Ordinary Wage (OW) Ceiling comes in. The ceiling is a limit on the amount of your monthly salary that is subject to CPF contributions. For 2025, the monthly Ordinary Wage ceiling is $7,400. This means that even if you earn more than $7,400 a month, your CPF contributions will only be calculated on the first $7,400 of your salary. Any income above this ceiling is not subject to CPF contributions.
CPF Annual Wage Ceiling
CPF Annual Wage Ceiling is a yearly cap on total wages (including both monthly salary and bonuses) that are subject to CPF contributions. In 2025, this ceiling is $102,000. This ensures that a person’s total mandatory contributions for the year do not exceed a certain amount, regardless of how much they earn in bonuses or other one-off payments.
| CPF Ordinary Wage ceiling | CPF Annual Salary Ceiling | |
|---|---|---|
| From 1 Jan 2016 to 31 Aug 2023 | $6,000 | $102,000 |
| From 1 Sep to 31 Dec 2023 | $6,300 (+$300) | $102,000 |
| From 1 Jan to 31 Dec 2024 | $6,800 (+$500) | $102,000 |
| From 1 Jan to 31 Dec 2025 | $7,400 (+$600) | $102,000 |
| From 1 Jan 2026 | $8,000 (+$600) | $102,000 |
CPF Ordinary Wage Ceiling vs CPF Annual Wage Ceiling
The CPF Ordinary Wage Ceiling is a monthly cap on the amount of your salary that is subject to CPF contributions. It applies specifically to your “Ordinary Wages” – which are your monthly salary, fixed allowances, and any overtime pay received in the same month.
However, the CPF Annual Wage Ceiling is a yearly cap on the total amount of all your wages that are subject to CPF contributions. This includes both your Ordinary Wages (monthly salary) and your “Additional Wages” (like bonuses, sales commissions, and annual leave pay-outs).
The Annual Wage Ceiling ensures that the total mandatory CPF contributions for an entire year do not exceed a certain amount, regardless of how much you earn in bonuses or other irregular payments.
CPF Annual Limit
The CPF Annual Limit of $37,740 is a cap on the total amount of mandatory and voluntary CPF contributions a person can make in a single calendar year. Unlike the monthly Ordinary Wage (OW) ceiling, which applies to your regular salary each month, the Annual Limit applies to the total amount of money that goes into your CPF accounts over the entire year.