Central Provident Fund (CPF)

Central Provident Fund (CPF) is a comprehensive social security system that enables Singaporeans and Permanent Residents (PRs) to set aside retirement funds and pay for their housing, insurance, and asset enhancement.

Every working Singaporean and PRs are required to make monthly contributions to their own CPF account. Employers of the individuals must also contribute to the accounts. The CPF contribution rate depends on the employee’s citizenship, age group and total wage for the month.

For the latest CPF contribution rates:

Types of CPF Account

Each individual’s CPF account is categorized into 3 accounts:

  • Ordinary Account – for retirement and housing needs
  • Special Account – for retirement needs
  • MediSave Account – for healthcare needs

The CPF received by the individual will be allocated to all 3 accounts. The allocated rate depends on the employee type and age group.

For the latest CPF allocation rates:

Interest Rates of CPF Account

All CPF members enjoy risk-free interest on their CPF savings. The current rates are as shown below.

CPF account Interest rates (as at 1 July 2018)
Ordinary Account 2.5% – 3.5%
Special Account 4% – 5%
MediSave Account 4% – 5%
Retirement Account 4% – 5%

Note: Interest rates include an extra 1% interest paid on the first $60,000 of the combined balance, and up to $20,000 from the Ordinary Account. For individuals aged 55 and above, there will be an additional 1% extra interest on the first $30,000 of the combined balance, including up to $20,000 from the Ordinary Account.

Penalty for Non- or Late CPF Payment

All employers are responsible for the monthly CPF contribution of their employees. CPF contributions must be made on time at the end of each month.

In case of non- or late CPF payment, there will be monetary and interest penalty. For some cases, employers can be charged and given fines and/or jail sentences. Thus, it is important to have a good payroll provider to assist you with your company’s monthly CPF contribution. HeySara’s payroll management service can assist you with the computation and management of monthly CPF payment for your local employees.