Starting 1 January 2026, significant updates to Singapore’s Central Provident Fund (CPF) will take effect, impacting both contribution rates and the Ordinary Wage (OW) ceiling. These adjustments aim to keep CPF aligned with wage growth, while helping Singaporeans — especially older workers — boost their retirement savings.
CPF remains a cornerstone of Singapore’s retirement planning system, with contributions made jointly by employers and employees. Funds are distributed into:
- Ordinary Account (OA) – For housing, investments, and insurance
- Special Account (SA) – For retirement savings
- Medisave Account (MA) – For healthcare needs
The 2026 changes primarily affect higher-income earners and employees aged 55 to 65.
Quick Summary Table
Key Information |
Details |
|---|---|
Implementation Date |
1 January 2026 |
Ordinary Wage Ceiling |
Increase from $7,400 to $8,000 |
Annual CPF Salary Ceiling |
Remains at $102,000 |
Additional Wage Ceiling |
Unchanged |
Older Workers CPF Rate Increase |
55–60: 32.5% → 34%, 60–65: 23.5% → 25% |
Who Benefits Most |
Higher earners & older workers nearing retirement |
Official Website |
Adjustment in the Ordinary Wage Ceiling
The Ordinary Wage (OW) ceiling determines the maximum monthly salary on which CPF contributions are calculated.
- Current ceiling: $7,400
- From January 2026: $8,000
This marks the final stage of a phased four-step adjustment that began in September 2023. The gradual increase was designed to help employers manage payroll costs while keeping CPF savings in step with wage inflation.
History of Ordinary Wage Ceiling Adjustments:
Period |
OW Ceiling |
|---|---|
1 Jan 2016 – 31 Aug 2023 |
$6,000 |
1 Sep – 31 Dec 2023 |
$6,300 |
1 Jan – 31 Dec 2024 |
$6,800 |
1 Jan – 31 Dec 2025 |
$7,400 |
From 1 Jan 2026 |
$8,000 |
Impact: Employees earning above the old ceiling will now have a larger portion of their monthly salary subject to CPF contributions, resulting in higher retirement savings over time.
Annual and Additional Wage Ceilings Remain Unchanged
While the monthly OW ceiling will rise, the annual CPF salary ceiling stays fixed at $102,000. This cap applies to both Ordinary Wages and Additional Wages (bonuses, commissions, etc.).
The Additional Wage ceiling and the annual CPF contribution limit of $37,740 will also remain unchanged.
Higher CPF Contribution Rates for Older Workers
From January 2026, CPF contribution rates for employees aged 55 to 65 will increase, narrowing the gap with younger workers’ rates.
New Rates (Employees earning above $750/month):
Age Group |
Total Contribution |
Employer Share |
Employee Share |
Current Total |
Increase |
|---|---|---|---|---|---|
55 & below |
37% |
17% |
20% |
– |
– |
55–60 |
34% |
16% |
18% |
32.5% |
+1.5% |
60–65 |
25% |
12.5% |
12.5% |
23.5% |
+1.5% |
65–70 |
16.5% |
9% |
7.5% |
No change |
– |
Above 70 |
12.5% |
7.5% |
5% |
No change |
– |
How the Extra Contributions Are Allocated
- Additional contributions for older workers will be credited first to the Retirement Account (RA), up to the Full Retirement Sum (FRS).
- Once the FRS is reached, extra funds go into the Ordinary Account (OA).
This approach ensures that older employees boost their retirement payouts while still keeping flexible funds in the OA for housing or investments.
Impact on Employees
- Higher Retirement Savings: Those earning more than $7,400 per month will see more of their salary attracting CPF contributions.
- Older Workers Benefit Most: Increases for the 55–65 group will grow retirement funds faster in the final working years.
- Steady Growth: More contributions to OA, SA, and MA will strengthen long-term financial security.
Impact on Employers
- Higher Payroll Costs: Businesses will pay slightly more in CPF contributions for older employees.
- Phased Implementation: The multi-year adjustment plan has given employers time to adapt.
- Retention Advantage: Enhanced CPF benefits can help attract and retain senior talent.
Why These Changes Matter
The CPF enhancements are part of Singapore’s long-term retirement strategy, aiming to:
- Keep pace with wage growth
- Encourage continued employment among older workers
- Strengthen retirement adequacy
- Maintain system sustainability for both workers and businesses
FAQs
Q1: When will the new CPF contribution rates start?
A: From 1 January 2026.
Q2: What is the new Ordinary Wage ceiling?
A: $8,000 per month (up from $7,400).
Q3: Will the annual CPF salary ceiling change?
A: No, it stays at $102,000.
Q4: Who benefits most from the changes?
A: Higher earners and employees aged 55–65.
Q5: Where will the extra contributions for older workers go?
A: First to the Retirement Account (RA), then to the Ordinary Account (OA) if the FRS is met.
Final Thoughts
The 2026 CPF changes mark another important step in ensuring Singaporeans have adequate retirement savings, especially for those in their final decade of working life. Higher OW ceilings mean more contributions for high earners, while rate increases for older workers directly enhance future payouts.
For employees, this is a win for financial security. For employers, it’s an investment in workforce stability — with manageable cost adjustments thanks to the phased approach.
For more details, visit the CPF Official Website.
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