A Guide About Central Provident Fund (CPF) For Employers

A Guide About Central Provident Fund (CPF) For Employers

CPF, or the Central Provident Fund, is a compulsory savings scheme in Singapore that all citizens pay into, throughout their working lives. It is crucial for employers to understand the CPF system and the way they need to be handling CPF payments to their employees because they are legally required to make monthly contributions into their employees’ accounts. Here’s a guide on how the system works and some information employers need to know about CPF.


Is it compulsory to contribute to the CPF of your employees?

Under the CPF Act, it is compulsory for employers to contribute CPF for Singaporeans or  Permanent Resident (PR) employees earning more than $50 a month, regardless of whether an employee is hired as a full-time or part-time staff, temporary, contract, or casual basis.

Employees’ share of CPF contributions is different. They are not eligible to make CPF contributions if they earn not more than $500 a month. At the same time, CPF contributions are not mandatory if the employee is working overseas.


Employees’ total salary that is subjected to CPF contributions

Employee wages consist of Ordinary Wages and Additional Wages. Ordinary wages refer to the wages that are exclusively for the month of compensation.  This is distinct from Additional Wages which include annual bonuses, incentive payments and leave pay that are not dependent on an employee’s performance in a specific month.


Ceiling for CPF Ordinary & Additional Wages

Companies in Singapore contribute up to 17% of their employees’ monthly salary to their CPF accounts, which can vary depending on the age of the employee. The ceiling for Ordinary Wages is capped at $6000 while the ceiling for Additional wages is calculated by:

$102,000* – Total Ordinary Wages (OW) subject to CPF for the year


How to submit CPF contributions

CPF EZPay is a digital platform that helps businesses and employers easily submit their CPF contributions by auto-computing employees’ CPF payments, regardless of the size of the company. Using CPF EZPay, employers can accelerate their contribution submission process, as they can submit contributions from the convenience of their own desktop or mobile device. Employers can also check the status of their submissions on the CPF website at any time.


Due date for CPF contributions

Employers are required to submit their CPF contributions by the 14th of the subsequent month or the next working day if the 14th falls on a Public Holiday, Saturday or Sunday.


Late submission and non submission of CPF contributions

If employers are late with their CPF contributions, they will be charged a late-payment interest at 1.5% per month starting from the first day after the due date.

Legal action will also be taken by the CPF Board if they detect late or nonpayments. An employer that does not make CPF contributions stand to be charged in court with a hefty fine of up to $5000 and/or up to six months imprisonment. This penalty is increased to a fine of up to $10,000 and/or up to twelve months imprisonment for subsequent convictions. The employer will then be issued a court order to pay the outstanding CPF contributions with the late payment interest of 1.5%.



It is the responsibility of employers to pay CPF contributions for their employees.  One mistake that employers often make is to forget to deduct CPF contributions from their employee’s salary. This oversight can cost a lot more than just the amount that was not contributed, as the employer will be liable for paying interest on this amount.

If you are a business owner looking to better manage your company’s CPF contributions and ensure payroll accuracy, Zealys offers payroll software for small businesses in Singapore that can help you easily comply with CPF standards. We also provide a trial version of our payroll software for free. To learn more about our product and how we can assist you, get in touch with us today at [email protected].

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