CPF is like a savings plan that helps us set aside money from our salary for important things like buying a home, medical needs, and retirement. Both we (the employees) and our employers contribute a part of our monthly salary to our CPF accounts, following the CPF contribution rate 2024. The government also adds to our savings by giving us some interest on the money we keep in our CPF accounts.
We get different interest rates on the money in our CPF accounts. Right now, the interest rates are 2.5% for the money we can use for housing, and 4% for money used for healthcare and retirement. Sometimes, these rates can be higher if the market rates go up. It also depends on how much we save and how old we are, we can get extra interest rates between 1% to 2%.
Now and then, the government adds more money to our CPF accounts through different programs like top-up schemes and the Matched Retirement Savings Scheme (MRSS). These extra boosts help us grow our savings even more for the future.
How Does CPF Contribution Work?
Monthly, some of the money we earn goes into our CPF accounts. We don’t need to do anything because our employers automatically take this amount from our paychecks. Employers also put their share into our CPF accounts. This money, from both us & our employers, gets added up and goes into our CPF accounts every month.
How much we put into our CPF accounts or CPF contribution rate 2024 depends on how old we are and how much we make. But there’s a maximum amount we can add each year. So, to grow our CPF savings, we have to have a job in Singapore.
How Much Should I Put in My CPF Every Month?
Monthly, we set aside a portion of our earnings, up to 20%, for our CPF accounts. Our employers also add to our CPF, up to 17% of our salary, but only up to a limit, which is now $6,800. The exact percentage they contribute can change depending on our age and how much we earn.
The Budget for 2023 revealed that the limit will increase to $8,000 by 2026.
CPF Monthly Salary Ceiling |
|
From 1 Jan 2024 |
$6,800 |
From 1 Jan 2025 |
$7,400 |
From 1 Jan 2026 |
$8,000 |
In the next few years, there will be some changes for those aged 55 to 70 regarding CPF contribution. The amount we and our employers put into CPF might increase. So, while our overall compensation goes up, our take-home pay could be slightly lower because we’re contributing more to CPF.
Starting from 2025, if we’re 55 or older, our Special Account will be replaced by the Retirement Account. This means that the money meant for the Special Account will now go into the Retirement Account instead.
Employee Age (Years) |
Allocation Rates (for monthly wages ≥ $750) |
Total (% of Wage) |
||
Ordinary Account (% Of Wage) |
Special Account (% Of Wage) |
Medisave Account (% Of Wage) |
||
35 and below |
23 |
6 |
8 |
37 |
Above 35 to 45 |
21 |
7 |
9 |
37 |
Above 45 to 50 |
19 |
8 |
10 |
37 |
Above 50 to 55 |
15 |
11.5 |
10.5 |
37 |
Above 55 to 60 |
12 |
7 |
10.5 |
29.5 |
Above 60 to 65 |
3.5 |
6.5 |
10.5 |
20.5 |
Above 65 to 70 |
1 |
4 |
10.5 |
15.5 |
Above 70 |
1 |
1 |
10.5 |
12.5 |
Most employees will have around 37% of their salary put into their CPF accounts.
When we reach 55, the contribution to our CPF gradually reduces until we reach 70. There are multiple perspectives to consider regarding this matter. As we age, our skills may not be as current as those of younger colleagues, which could necessitate additional training expenses for our employers. Furthermore, as we progress in age, we may achieve specific goals such as saving for retirement and healthcare, thereby reducing the need to allocate a significant amount of money to CPF.
When the employee contribution rate is lower, we get to take home more of our salary. Also, when the employer contribution rate is lower, it makes it cheaper for employers to hire or train older workers.
If we earn between $50 and $500 per month, we don’t have to put money into CPF. Only our employers need to contribute to our CPF accounts. This is important for people with contract or part-time jobs. If we earn between $500 and $750, there’s a gradual increase in the employee CPF contribution rate 2024, so our take-home pay won’t suddenly drop when our salary goes over $750.
How Much Interest Do I Get on My CPF Savings?
Our CPF accounts earn interest on the money we invest in it. We receive a guaranteed annual interest rate of 2.5% for the funds in our Ordinary Account (OA). The guaranteed interest rate for the funds in our MediSave Account (MA), Retirement Account (RA), and Special Account (SA) is 4% annually. Sometimes, these rates can go up even higher than the guaranteed rates, depending on market conditions. For example, from April to June 2024, the interest rate for SA, MA, and RA balances is 4.05%.
Besides the regular interest rates, we also receive additional interest. We earn an extra one percent interest on the first $30,000 of our Retirement Account (RA) investments and 1% interest on the first $60,000 of our CPF savings every year.
Account |
Base Interest Return(per annum) |
Ordinary Account |
2.5% (Floor rate) |
Special Account |
4.08% (Floor rate: 4.0%) |
Medisave Account |
4.08% (Floor rate: 4.0% |
Retirement Account |
4.08% (Floor rate: 4.0%) |
Where Does My Money Go in CPF?
CPF contributions from our monthly salary are divided into three accounts. The amount going into each account depends on our age.
Employee Age (Years) |
Allocation Rates (for monthly wages ≥ $750) |
||
Ordinary Account (% Of Wage) |
Special Account (% Of Wage) |
MediSave Account (% Of Wage) |
|
35 and below |
23 |
6 |
8 |
Above 35 to 45 |
21 |
7 |
9 |
Above 45 to 50 |
19 |
8 |
10 |
Above 50 to 55 |
15 |
11.5 |
10.5 |
Above 55 to 60 |
12 |
3.5 |
10.5 |
Above 60 to 65 |
3.5 |
2.5 |
10.5 |
Above 65 |
1 |
1 |
10.5 |
When we look at how our money is divided in our CPF accounts, it follows our life stages. When we’re young, more of our money goes into the Ordinary Account (OA) for things like buying a home. We also start putting money into the Special Account (SA) for retirement, and the MediSave Account (MA) for healthcare.
As we get older, less goes into the OA because we’re probably paying off our home and saving more for retirement and healthcare. The SA and MA also earn higher interest rates than the OA.
Once we’re over 55, we might have already saved enough for retirement in the new Retirement Account (RA), so more focus goes into healthcare through the MA.
What’s the Highest Salary for CPF Contributions?
There are two types of wages:
- Ordinary Wage (OW)
- Additional Wage (AW).
Our Ordinary Wage (OW) is our monthly salary, and CPF contributions on it are limited to $6,800 per month for now. This limit will gradually increase to $8,000 per month by 2026.
Simply put, if we earn $6,800 or less, we contribute based on this amount. But if we earn more, only the first $6,800 counts for both our employee and employer CPF contributions.
Monthly Salary (Age 35 and below) |
Ordinary Account Contributions |
Special Account Contributions |
Medisave Account Contributions |
Total Contributions |
$5,000 |
$1,150.15 |
$299.88 |
$399.97 |
$1,850 |
$6,000 |
$1,380.18 |
$359.86 |
$479.96 |
$2,220 |
$6,300 |
$1,449.19 |
$377.85 |
$503.96 |
$2,331 |
$6,800 |
$1,564.20 |
$407.84 |
$543.96 |
$2,516 |
$7,400 |
$1,564.20 |
$407.84 |
$543.96 |
$2,516 |
$8,000 |
$1,564.20 |
$407.84 |
$543.96 |
$2,516 |
$9,000 |
$1,564.20 |
$407.84 |
$543.96 |
$2,516 |
If we want to figure out our CPF contributions, we can use the CPF Contribution Calculator.
Our Additional Wage (AW) includes things like bonuses and leave pay that we might not get every month. Both we and our employers have to contribute CPF on these wages, but only up to the CPF Annual Limit.
What Is The CPF Annual Limit?
The CPF Annual Limit is $37,740, which is the maximum amount we can contribute to CPF in a year. If we earn more than $6,800 a month, we still need to contribute CPF on any extra income, like bonuses, up to this limit.
For example, let’s say we earn $6,800 a month and get a bonus of $20,400 at the end of the year. Our salary alone would cover CPF contributions up to $30,192 for the year. So, we’d still need to contribute CPF on the bonus amount, which is $7,548.
This applies even if we earn more than $6,800 each month. If we’re not sure, we can use the CPF Contribution Calculator to figure it out.
Can I Add More Money to CPF?
We can add more money to all three of our CPF accounts through the Voluntary Contributions (VC) scheme, up to the CPF Annual Limit of $37,740. We can also contribute to just our MediSave Account (MA) up to our Basic Healthcare Sum (BHS). Additionally, we can use the Retirement Sum Topping Up (RSTU) scheme to add money to our Special Account (SA) up to the Full Retirement Sum (FRS) if we’re under 55, or to our Retirement Account (RA) up to the Enhanced Retirement Sum (ERS) if we’re 55 and older.
When Does My Boss Pay into My CPF?
Employers can take up to 14 days after the month ends to pay our CPF contribution. If this deadline falls on a weekend or public holiday, they have until the next working day.
If employers don’t pay CPF contributions on time, they might have to pay interest on the late payments and a fine. This is to make up for any loss in the interest we would have earned. Employers who pay late could face consequences like:
- Late payment interest: Employers may have to pay 18% interest per year (which is 1.5% per month) on overdue CPF contributions, or a minimum of $5 per month.
- Fines: Employers could face fines ranging from $1,000 to $5,000 per offense, and/or up to 6 months in jail.
- Repeat Offenders: For those who repeatedly pay late, fines could increase to between $2,000 and $10,000 per offense, and up to 12 months in jail.
- Serious Offenses: Employers who fail to pay their employees’ CPF contributions and deduct them from their salaries could face fines of up to $10,000, imprisonment of up to 7 years, or both.
How Do I Check My CPF Contributions?
Step 1: Log in to your CPF Account on the CPF website.
Step 2: You’ll see your latest CPF contribution and when you got the money.
Step 3: To see more details and past contributions, go to My Statement (Section B) and click on Contribution History.
You can also use the CPF app to check your contributions.
Even though it’s your employer’s job to pay CPF contributions, it’s good to check regularly if you got the right amount. If you notice any mistakes, talk to your employer first. If you need more help, you can email the Ministry of Manpower.
Since employers have up to 14 days to pay, wait until then to bring it up.
What Can I Spend My CPF Savings On?
Here are some ways we can use our CPF savings:
- We can use it to buy a home, including the downpayment, monthly mortgage payments, and stamp duty.
- We can save it for our retirement and healthcare needs. We can also invest part of it in stocks and other financial products to grow our money.
- We can use it to pay for education in Singapore, either for ourselves or our loved ones, but we have to remember that we need to pay it back with interest.
- We can use our CPF savings to pay for certain insurance policies in Singapore. We can use our Ordinary Account (OA) balances for the Home Protection Scheme (HPS) and Dependents’ Protection Scheme (DPS), which help provide financial security for our loved ones. We can also use our MediSave Account (MA) balances to pay for our own and our loved ones’ premiums for MediShield Life, as well as ElderShield or CareShield Life premiums.
- When we turn 55, the money in our Ordinary Account (OA) and Special Account (SA) gets moved to our Retirement Account (RA). This money will be used to provide us with a monthly income for the rest of our lives through CPF LIFE once we retire.
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