CPF Contribution Changes from 1 January 2026
Effective 1 January 2026, several key updates to the Central Provident Fund (CPF) contribution system will be implemented to support retirement savings, particularly for older workers. Here’s what you need to know:
- Increase in CPF Ordinary Wage Ceiling
The Ordinary Wage (OW) ceiling will rise from $7,400 to $8,000. This increase is the final adjustment in the current schedule.
The increase has been phased in over four steps starting 1 September 2023.
No Change to Annual Salary Ceiling: The ceiling remains at $102,000, limiting CPF contributions on salaries for the year.
- Increase in CPF Contribution Rates for Employees Aged 55 to 65
Starting 1 January 2026, the CPF contribution rates for employees aged 55 to 65 will be increased to help strengthen their retirement savings.
For employees aged 55 and below, the total contribution rate will remain at 37%, with 17% from the employer and 20% from the employee. For those aged above 55 to 60, the total contribution rate will rise from 32.5% to 34%, with the employer’s share increasing by 1.5% to 16%, and the employee’s share rising by 1% to 18%. Employees aged above 60 to 65 will see their total contribution increase from 23.5% to 25%, with the employer’s contribution increasing by 1.5% to 12.5%, and the employee’s share rising by 1% to 12.5%.
For employees above 65, the rates will remain the same at 16.5%, with the employer contributing 8% and the employee contributing 8.5%. Similarly, for employees above 70, the contribution rate will stay at 12.5%, with 7% from the employer and 5.5% from the employee.
The increased contributions for employees aged 55 to 65 will be directed to their Retirement Account (RA), up to the Full Retirement Sum (FRS). Any excess contributions above the FRS will be allocated to their Ordinary Account.
Key Takeaways:
- Employers must update payroll systems to reflect the new OW ceiling and adjusted contribution rates.
- Employees, especially those over 55, will benefit from higher retirement savings.
