Central Provident Fund (CPF), which was established on July 1, 1955, is a mandatory social security saving scheme for employees and employers to provide retirement funds for salaried Singaporean workers in addition to help with housing and medical expenses.
Under the Central Provident Fund Act chapter 36, employers are required to make CPF contributions at monthly rates. Employers can recover the employee’s share of the contribution by deducting it from their wages.
See also: The Rules & Calculation of EPF for Indian and Malaysian Employers
According to the CPF law, the program is eligible and an obligatory for employees who are Singaporean citizens or Singaporean permanent residents (SRPs).
An employee who is employed in Singapore is also covered in the program, including company directors, part-time or casual employee, and seaman who is employed under a contract of service or other agreement entered into in Singapore.
NSmen employees who are in-camp training are also eligible for CPF contributions. Employer must pay CPF contributions on an NSman’s wages, including makeup pay from MINDEF. Then, the employer can recover NS employees’ share of contributions from their wages.
Employees who are concurrently employed by another employer and family members of a business owner who receives wages for work done are also eligible for the program.
Employers hiring foreign workers in their company do not have to contribute to CPF but they are required to pay the Skills Development Levy (SDL). SDL payable is 0.25 percent of the monthly remuneration for each employee, with a minimum payment of $2 (employee’s wage is less than S$800 a month) and maximum of S$11.25 (employee’s wage is more than S$4.500 a month).
According to CPF Board, the contribution rate applicable for an employer depends on three factors: (see here for detail calculation and detail rate contribution)
To ease you with paying method, there are two options available.
Employer should pay the contribution at the end of the month. Employer has a grace period of 14 days to pay it. If the 14th falls on a Saturday, Sunday, or public holiday, employers can pay by the next working day.
Employers who fail and/or violate CPF contributions are liable to:
Read also: Basic Overtime Rules and Calculations for Employers in APAC