Employment Tax

Singapore | Increase in CPF Ordinary Wage Ceiling to S$8,000 from 1 January 2026

Summary

The CPF Ordinary Wage (OW) ceiling will increase from S$7,400 to S$8,000, effective 1 January 2026. This change marks the final phase of the multi-year adjustment aimed at strengthening retirement adequacy for Singaporeans.

In addition, CPF contribution rates for employees aged above 55 to 65 will increase from 1 January 2026 to further enhance retirement savings for senior workers.

The detail

Key Changes at a Glance

• Current OW monthly ceiling (2025): S$7,400
• New OW monthly ceiling (from 1 January 2026): S$8,000
• CPF contribution rates remain unchanged for all age groups except employees aged above 55 to 65
• CPF contribution rates for employees aged above 55 to 65 will increase from 1 January 2026 (see table below)
• Annual CPF Salary Ceiling remains unchanged at S$102,000, resulting in a lower Annual Additional Wage (AW) ceiling
• Applies to employees earning monthly wages above S$750

For employees earning monthly wages > $750
Employee’s age (years)	2025	CPF Contribution Rates from 1 Jan 2026
	Total (% of wage)	Total (% of wage)	By employer (% of wage)	By employee (% of wage)
55 and below	37	37	17	20
Above 55 to 60	32.5	34 (+1.5)	16 (+0.5)	18 (+1)
Above 60 to 65	23.5	25 (+1.5)	12.5 (+0.5)	12.5 (+1)
Above 65 to 70	16.5	16.5	9	7.5
Above 70	12.5	12.5	7.5	5

Note: Figures in brackets () denote the increase in rates

Employer Considerations

The increase in the OW ceiling may result in:

1. Higher employer CPF contributions for:
   1. Employees earning between S$7,400 and S$8,000 per month
   2. Employees aged above 55 to 65
2. Potential considerations on 2026 manpower and compensation budgets
3. The need to review internal equalisation policies and shadow payroll calculations (where applicable)
4. Updates to payroll vendor arrangements and HR system configurations

Recommended Actions for Employers

1. Review and Update Payroll Systems
   Ensure that in-house payroll systems and/or external payroll vendors are configured to apply the new S$8,000 OW ceiling and the revised contribution rates for employees aged above 55 to 65 from 1 January 2026.
2. Assess Financial Impact
   Identify affected employees and quantify the additional employer CPF contributions to support 2026 budget planning.
3. Review Employment Policies and Agreements
   Revisit employment contracts, HR policies, expatriate compensation frameworks, and CPF-linked allowances (e.g. CPF cash in-lieu) or reimbursements to ensure alignment with the revised ceiling.
4. Prepare Employee Communications
   Employees may experience higher CPF contributions and a corresponding reduction in take-home pay. Employers should prepare clear communication materials to address employee queries ahead of implementation.
5. Annual Wage Planning Considerations
   As the Annual CPF Salary Ceiling remains at S$102,000, the increase in the OW ceiling may:
   1. Reduce the remaining headroom for Additional Wage (AW) CPF contributions
   2. Affect bonus structuring and incentive payouts

Key Takeaway

The increase in the CPF OW ceiling reflects the continued effort to strengthen employees’ retirement savings. Employers are encouraged to take early action to update payroll processes, assess cost implications, and communicate proactively with internal stakeholders to ensure a smooth transition by 1 January 2026.

Given the phased approach to CPF adjustments over the past few years, these changes should feel familiar by now.

Please also join us on 22 January 2026 for our Compliance Seminar, your ultimate guide to navigating Singapore’s employer tax landscape as the 2026 filing season approaches.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Grace Huang
Partner

Kajalpreet Kaur
Manager

Further information on Vialto Partners can be found here: www.vialtopartners.com

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