For any singapore small business, managing payroll accurately is closely linked to reliable accounting services in Singapore. With CPF changes 2026 taking effect from 1 January, employers need to understand how these updates affect salary calculations, CPF contributions, and workforce costs.
This guide breaks down the key changes and highlights what employers should prepare for to stay compliant and plan ahead.
The CPF Ordinary Wage (OW) ceiling sets the maximum amount of an employee’s monthly salary that CPF contributions are calculated on.
For employers, this means:
CPF applies only up to the OW ceiling each month
Salary amounts above the ceiling do not attract CPF
Changes to the ceiling affect employer CPF costs for higher-paid staff
As part of the CPF changes 2026, the OW ceiling will increase to $8,000 per month, up from $7,400.
This adjustment is the final step in a series of phased increases introduced since 2023, allowing employers time to adapt gradually.
| Period | Monthly CPF Ordinary Wage ceiling | CPF annual salary ceiling |
|---|---|---|
| Jan 2016 – Aug 2023 | $6,000 | $102,000 |
| Sep – Dec 2023 | $6,300 | $102,000 |
| Jan – Dec 2024 | $6,800 | $102,000 |
| Jan – Dec 2025 | $7,400 | $102,000 |
| From Jan 2026 | $8,000 | $102,000 |
Despite the higher monthly ceiling:
The CPF annual salary ceiling remains at $102,000
CPF on bonuses and additional wages continues to be capped based on the remaining annual salary ceiling
The CPF Annual Limit remains $37,740
Why this matters:
For a singapore small business with employees earning above $7,400 per month, CPF contributions will now apply to a larger portion of monthly wages.
Another key part of the CPF changes 2026 applies to:
Employees aged above 55 to 65
Employees earning more than $750 per month
There are no changes to CPF contribution rates for employees aged 55 and below.
| Employee age | Total CPF contribution | Employer contribution | Employee contribution |
|---|---|---|---|
| 55 and below | 37% | 17% | 20% |
| Above 55 to 60 | 34% | 16% | 18% |
| Above 60 to 65 | 25% | 12.5% | 12.5% |
| Above 65 to 70 | 16.5% | 9% | 7.5% |
| Above 70 | 12.5% | 7.5% | 5% |
These changes aim to strengthen retirement savings for employees who continue working later in life.
For employees aged above 55 to 65:
Additional CPF contributions are credited to the Retirement Account, up to the Full Retirement Sum
Once the Full Retirement Sum is met, contributions are credited to the Ordinary Account
For employers, the key task is ensuring payroll calculations reflect the correct rates.
 Your books should work as fast as you do. Get real-time insights, automated reports, and expert guidance—all in one place. Experience live accounting here.
CPF calculations follow a clear structure once the key inputs are identified.
CPF contributions are payable for employees who are:
Singapore Citizens, or
Singapore Permanent Residents (SPRs)
For SPRs, different contribution rates apply depending on whether the employee is in their first, second, or third year of SPR status.
CPF is calculated on Total Wages, which consist of:
| Wage type | Description |
|---|---|
| Ordinary Wages (OW) | Monthly salary and fixed allowances |
| Additional Wages (AW) | Bonuses, commissions, and non-monthly payments |
From 1 January 2026:
OW is capped at $8,000 per month
Total wages are capped by the $102,000 annual salary ceiling
CPF contribution rates depend on:
The employee’s age
The employee’s wage level
Citizenship or SPR status
Employers should apply the relevant employer and employee rates shown in Section 2.
| Calculation | Formula |
|---|---|
| Employer CPF | CPF-applicable wages × employer rate |
| Employee CPF | CPF-applicable wages × employee rate |
| Total CPF | Employer CPF + Employee CPF |
CPF amounts are rounded to the nearest dollar
Amounts below 50 cents are dropped
Amounts of 50 cents and above are rounded up
The employee’s CPF share is deducted when wages are paid
Scenario
Employee age: 45
Monthly salary: $9,000
Citizenship: Singapore Citizen
Step 1: Apply OW ceiling
CPF-applicable wages = $8,000
Step 2: Calculate CPF
| Item | Amount |
|---|---|
| Employer CPF (17%) | $1,360 |
| Employee CPF (20%) | $1,600 |
| Total CPF | $2,960 |
Net salary before other deductions
$9,000 − $1,600 = $7,400
Despite the CPF changes 2026:
Employees earning $500 to $750 remain under phased-in contribution rates
Graduated CPF rates for first- and second-year SPRs remain unchanged
CPF submission timelines and compliance requirements stay the same
Employers should:
Review payroll budgets for higher CPF costs
Update payroll systems before the first 2026 salary run
Recalculate CPF obligations for affected employees
Work closely with reliable accounting services in Singapore
Factor CPF changes into manpower planning and cash-flow forecasts
Early preparation helps reduce errors and avoids CPF adjustments later.
For a singapore small business, staying compliant with CPF rules is part of maintaining accurate accounts.
Counto helps employers:
Keep payroll and CPF contributions accurate and compliant
Maintain proper accounting and payroll records
Stay updated on regulatory changes affecting employment costs
Plan ahead for CPF-related impacts on budgeting and cash flow
By combining intelligent automation with experienced accountants, Counto supports businesses in managing payroll and compliance with confidence.
The CPF changes in Singapore 2026 include a higher Ordinary Wage ceiling of $8,000 and revised CPF contribution rates for employees aged above 55 to 65. While these updates support long-term retirement adequacy, they also affect payroll costs for employers. With early planning and the support of trusted accounting services in Singapore, businesses can remain compliant and manage workforce costs effectively.
Tired of Teaching Every New Accountant About Your Business? Traditional accounting services mean repeatedly explaining your business to new staff. Modern companies need systems that learn and remember—exactly what most accounting firms can’t deliver.
Counto’s intelligent accounting service adapts to your business. Our AI learns your specific patterns and transactions, then handles your daily bookkeeping automatically. Expert accountants review everything for accuracy, and your dedicated Customer Success Manager is always just a message or call away. No more repeated explanations, no more basic questions—just accounting that understands your business.
Join small businesses saving hours monthly on financial management with our outsourced accounting solution. Plus, with our AI handling the routine work, you’ll get better insights at a fraction of the cost of a full-time bookkeeper. Ready to upgrade your accounting? Chat with us now, email [email protected] or use our contact form.
Here are some articles you might find helpful:
SAFE Notes Guide for Singapore SME Owners
Foreign Investors and Singapore Company Laws
Policy Changes and Nominee Director Services Singapore
Payroll Compliance for Singapore SMEs
Singapore Transfer Pricing Regulations for SMEs
Whatsapp 
Call