Social security or Central Provident Fund (CPF) contributions are compulsory for Singapore citizens and permanent residents who are working in Singapore. Foreign persons working in Singapore are not qualified for the CPF scheme.
The Central Provident Fund (CPF) is a compulsory savings plan for employees in Singapore. It funds a range of social security schemes, including retirement, healthcare, and housing, and is maintained by the CPF Board.
Under the Scheme, the employer and employee are required to make monthly offerings at the existing contribution rates which depend upon the wage and age group of the employee. Both are required to make CPF contribution on the employee’s Ordinary Wage and Additional Wage subject to an Annual Wage Ceiling.
Prior to 1 January 2016, the wage cap for Ordinary Wage is SGD5,000 per month while the Annual Wage Ceiling is SGD85,000. From 1 January 2016, the wage cap for the Ordinary Wage is revised to SGD6,000 per month while the revised Annual Wage Ceiling is SGD102,000.
Additional Wage is limited to the difference between the prevailing Annual Wage Ceiling (SGD102,000 from the year 2016) and the Ordinary Wage that has been subject to CPF.
Statutory contributions in Singapore are made to the CPF by the employer and the employee. Contributions go into three accounts:
Ordinary Account (OA): Covering housing, insurance, investment, education
Special Account (SA): Covering retirement products
Medisave Account (MA): Covering hospital expenses and other medical insurance
When an employee turns 55, a fourth Retirement Account (RA) is created for them, designed to provide savings for retirement.
Employers should pay CPF contributions within 14 days of the end of the month. They may access their accounts via an online CPF Singapore login portal – which offers access a range of useful tools.
Visit more:singaporeaccountingsoftware.comTags: Central Provident Fund, Singapore CPF scheme, Social Security Taxes in Singapore