Apart from appreciating Singapore’s hawker culture, mastering “Singlish”, and living in million dollar public housing HDB flats, new permanent residents (PRs) will also have to get used to contributing a significant part of their monthly salary to their CPF accounts.
CPF is Singapore’s mandatory social savings scheme – helping Singaporeans and PRs to secure their retirement adequacy as well as pay for important expenses such as their home, children’s education and medical expenses.
Currently, CPF members contribute a maximum of 37% of their salaries to their CPF accounts. Up to 20% comes from Employee CPF Contributions and up to 17% from Employer’s CPF Contributions. This amount is currently capped at a monthly salary of $6,800 and is deducted automatically from employees’ salaries. By 2026, the monthly salary cap will be raised to $8,000.
CPF Is Payable From The Date Of PR Status Approval
After the taxing process of applying for your PR status, the Form 5/5A will notify you of your successful application. The date on the form is the start date of your status as a PR in Singapore.
If you are currently employed, it also indicates when employers have to start making CPF contributions. As an employee, you would also start seeing a sizeable chunk taken off your salary – and channelled into your newly-opened CPF accounts.
Understandably, having to deduct up to 20% (employee’s contribution) immediately from your take-home pay may be difficult for many to adapt overnight. However, you also start receiving more in total remuneration once you factor in employer CPF contributions of up to 17% of your salary. From an employer’s perspective, however, they will incur up to 17% higher cost for hiring the same employee – which can also be a heavy burden.
Hence, there is a two-year acclimatisation period for both employees and employers. Their contribution rates will start at a lower level and gradually rise to the normal CPF contribution rates by the third year.
The first full year starts from the date of PR approval and ends on the last day of the PR approval anniversary month. The second and third years follow this start date – from the first day of PR approval anniversary month.
For example, if your PR status was approved on 14 October 2024, your first year of CPF contribution will start from that date, and end on 31 October 2025. Your second CPF contribution year will start on 1 November 2025 and, finally, normal CPF contributions – which start from the third year – will start from 1 November 2026.
Read Also: 15 Little-Known Things About CPF That Most Singaporeans Are Still Unaware About
First And Second Year Contribution Rates Vary Based On Three Different Combinations Of Employer-Employee Contributions
As mentioned above, the de facto CPF contributions for the first two years for both employees and employers are at a reduced rate (Table #1 below). The reduced rate is termed the graduated rate. Employers are required to contribute at the graduated rate unless you are working for a Ministry as a non-pensionable employee.
Both parties can jointly apply for higher rates if both employer and employee are willing to make full CPF contributions from the start. The higher contribution rate can also vary between full employer-graduated employee (Table #2 below) or full employer-full employee (Table #3), which is also the default rate after the third year.
For those who would wish to contribute a higher CPF rate independent of your employer’s contributions, you can top up your CPF through the Voluntary Contribution (VC) or Retirement Saving Topping Up Scheme (RSTU).
Your CPF contribution rates for the first two years of PR status can be calculated with the CPF Contribution Calculator. The breakdown of rates for new PR employees aged below 55 years old, drawing a salary of $750 and above, are as shown below:
Table #1 Graduated Employer & Graduated Employee CPF Contribution Rates
Graduated Employer & Graduated Employee (G/G) Contribution Rate
Employee’s share of CPF contributions
Employer’s share of CPF contributions
Total CPF contributions (Employer’s & Employee’s share)
First Year
5% of Ordinary Wage (Capped at $340) + 5% Additional Wage
4% of Ordinary Wage (Capped at $272) + 4% Additional Wage
9% of Ordinary Wage (Capped at $612) + 9% Additional Wage
Second Year
15% of Ordinary Wage (Capped at $1,020) + 15% Additional Wage
9% of Ordinary Wage (Capped at $612) + 9% Additional Wage
24% of Ordinary Wage (Capped at $1,632) + 24% Additional Wage
Table #2 Full Employer – Graduate Employee CPF Contribution Rates (Require Joint Application)
Full Employer & Graduated Employee (F/G)
Employee’s share of CPF contributions
Employer’s share of CPF contributions
Total CPF contributions (Employer’s & Employee’s share)
First Year
5% of Ordinary Wage (Capped at $340) + 5% Additional Wage
17% of Ordinary Wage (Capped at $1,156) + 17% Additional Wage
22% of Ordinary Wage (Capped at $1,496) + 22% Additional Wage
Second Year
15% of Ordinary Wage (Capped at $1,020) + 15% Additional Wage
17% of Ordinary Wage (Capped at $1,156) + 17% Additional Wage
32% of Ordinary Wage (Capped at $2,176) + 32% Additional Wage
Table #3 Full Employer – Full Employee CPF Contribution Rates (Require Joint Application)
Full Employer & Full Employee (F/F)
Employee’s share of CPF contributions
Employer’s share of CPF contributions
Total CPF contributions (Employer’s & Employee’s share)
Year Of Application With Employer Or Third Year Onwards
20% of Ordinary Wage (Capped at $1,360) + 20% Additional Wage
17% of Ordinary Wage (Capped at $1,156) + 17% Additional Wage
37% of Ordinary Wage (Capped at $2,516) + 37% Additional Wage
Similar to Singapore Citizens and existing PRs who have been making CPF contributions for more than three years, the exact contribution rate into your various CPF accounts (i.e. Ordinary Account (OA), Special Account (SA) and Retirement Account (RA), and MediSave Account (MA)) will vary based on your age. Likewise, contribution rates will decrease from up to 37% (for those below 55) to 12.5% for those 70 and above.
In the event you have applied for a Full Employer – Full Employee CPF contribution rate with your previous employer but moved to another that does not provide it before the third year, your CPF contributions will revert to the graduated contribution rates. You would have to re-apply with your new employer for higher rates.
If You Are Departing Singapore For Good, You Can Apply To Withdraw CPF Monies
In the event you are not continuing your PR status in Singapore, and you plan to leave Singapore permanently, you can apply to withdraw your CPF monies.
In Singapore, if you have Singpass, you can submit your completed form and supporting documents via My Mailbox which will be the fastest mode of application. You can also make the application in-person at one of the CPF Service Centres, if you do not have Singpass.
If you are currently located overseas and do not have Singpass, you need to fill in a form under the witness of a Singapore Overseas Mission before sending the application by mail with official stamps.
Your CPF savings would be transferred to you via interbank Giro to a local Singapore bank or telegraphic transfer (TT) to your overseas bank account. Any existing tax liabilities would be deducted from your CPF savings. For those who have invested via the CPF Investment Scheme (CPFIS), Central Depository (Pte) Ltd (CDP) charges a fee of $10.70 for each transfer of share counter. You can either liquidate your positions or choose to transfer your investments to your brokerage account.
For those who are covered under CPF LIFE, you have to close your CPF accounts (since March 2024), and your participation in CPF LIFE will cease. You can transfer your CPF savings to your bank account.
Do note that if you do return to re-obtain a PR or citizenship, you would have to make a full refund to CPF based on the amount withdrawn, including the accrued interest rates.
Read Also: Migrating Overseas? Here’s What Would Happen To Your CPF Monies
This article was first published on 30 June 2021 and was updated to include additional information.
The post Guide To CPF: What New Permanent Residents In Singapore Need To Know appeared first on DollarsAndSense.sg.
