If you’re a working Singaporean, you’ve probably heard the term “CPF contribution” thrown around. But what exactly is it, and how much do you need to pay? If these are questions you’ve been wondering yourself, we’ve got you covered with the latest updates on CPF contribution rates in 2023 and a guide on how to calculate your contributions.
Plus, we’re even pitting CPF against EPF (which is the Malaysian version of CPF) to figure out which one offers higher return rates. So, be sure to stick around till the end for that!
What is CPF contribution?
Before we get into the changes, let’s do a quick recap, shall we?
CPF, or Central Provident Fund, is a social security savings scheme that’s uniquely Singaporean. It’s designed to help Singaporeans save for retirement, healthcare, and housing needs.
If you’re an employee, you’ll be contributing up to 20% of your salary to CPF every month. Likewise, your employers play their part too, adding up to 17% into your CPF accounts.
This makes up to about 37% of CPF contributions on both your parts.
However, this percentage isn’t set in stone and changes with your age and income.
Read also: 9 must-know things about using CPF to buy a house
What’s the CPF contribution rate in 2023?
For starters, the CPF Ordinary Wage (OW) ceiling is will be transitioning from S$6,000 to S$8,000 by 2026. The idea behind this is to match the rise in salaries and help people in the middle-income group save more for their retirement.
The initial step of this adjustment is set for 1 September 2023 and the process will unfold gradually, spanning four stages. This phased implementation aims to provide both employers and employees with a seamless transition, allowing them to acclimate to the upcoming changes with ease.
And the rise in the CPF Monthly Salary Ceiling isn’t alone.
Both Employee’s CPF contributions and Employer’s CPF contributions for folks aged 55 to 70 are on an upward trajectory as well.
This began as an initiative to help senior workers save more for retirement, as proposed by a group called the Tripartite Workgroup on Older Workers back in 2019. They suggested gradually increasing the amount of money taken from the paychecks of senior workers and putting it into their retirement savings account.
This plan started in two steps on January 2022 and January 2023 and will continue all the way until the year 2030.
Here’s what The Allocation Rates for different age brackets will look like:
| Age | The Allocation Rates (%) | Employer contribution | Employee contribution | Total wage percentage | ||
| Ordinary Account (OA) | Special Account (SA) | Medisave Account (MA) | ||||
| 35 and below | 23 | 6 | 8 | 17 | 20 | 37 |
| Above 35 to 45 | 21 | 7 | 9 | |||
| Above 45 to 50 | 19 | 8 | 10 | |||
| Above 50 to 55 | 15 | 11.5 | 10.5 | |||
| Above 55 to 60 | 12 | 7 | 10.5 | 14.5 | 15 | 29.5 |
| Above 60 to 65 | 3.5 | 6.5 | 10.5 | 11 | 9.5 | 20.5 |
| Above 65 to 70 | 1 | 4 | 10.5 | 8.5 | 7 | 15.5 |
| 70 and above | 1 | 1 | 10.5 | 7.5 | 5 | 12.5 |
PS. For those in the S$500 to S$750 bracket, employee CPF contributions aren’t mandatory. This bit is especially noteworthy for freelancers, part-timers, and the gig economy crew. Of course, you can still make a contribution by yourself, if you want to.
Read also: Here’s how much you need to earn to afford a condo (2023)
What are the CPF interest rates in 2023?
In 2023, CPF interest rates are 2.5% for your Ordinary Account (OA), 4% for your Special Account (SA), and 5% for your Medisave Account (MA).
And if you’re 55 and above, your Retirement Account (RA) gets an extra 1% interest on the first S$60,000 and an additional 1% on the next S$30,000.
How do I calculate my CPF contributions?
To calculate your CPF contributions, you’ll need to know your monthly salary and categorise it into Ordinary Wages (OW) and Additional Wages (AW).
Use the CPF Contribution Calculator provided by the CPF Board to get an accurate breakdown of your contributions. It’s user-friendly and helps you plan for your financial future with ease.
How do I check my CPF contributions?
Keeping an eye on your CPF contributions is a breeze and you can do it many ways:
1. Via the CPF website
Start by logging onto your account on the CPF website.
Upon accessing it, you will see an overview of your most recent CPF contribution, along with the receipt dates of these funds.
Then, go to the ‘My Statement’ section (Section B). This section houses your comprehensive Contribution History, serving as a repository of all your CPF-related transactions.
While your employers are legally required to make CPF contributions, play your part in ensuring the numbers add up. If they don’t, reach out to your employer to get things back on track. In the event that the matter remains unresolved, you have the option to contact the Ministry of Manpower (MOM) via email.
2. Via digital services and apps
Log to “my cpf digital services” or the CPF Mobile app using your Singpass credentials.
Once inside, you should be able to see your account balances, the past 15 months of Contribution History, and a glimpse into your 15-month Transaction History.
If you’re feeling a little lost, here’s a handy PDF guide to help you out. Prefer to watch an instructional video tailored to your language preference instead? Head on over here.
3. Via phone calls
Give CPF a call at 1800-227-1188 (code 2) between 8:30 am and 10:00 pm.
Share your request, and they’ll promptly send hard copy statements to the address they have on record in just 4 business days!
CPF vs. EPF: Which has better interest rates?
Contribution rates
In Singapore, the contribution rate for CPF begins at 37% for those who are 55 and below, while in Malaysia, the contribution rate for EPF is 11% for employees and 12% for employers.
This means that you will save more money in CPF over time than you would in EPF.
CPF and EPF are two of the most important retirement savings schemes in Singapore and Malaysia, respectively. Both schemes require employers and employees to contribute a portion of their salaries to a savings account, which can then be used for a variety of purposes, such as housing, education, and healthcare.
Interest rates
One of the key differences between CPF and EPF is the interest rate that is paid on savings. As of August 2023, the interest rate per annum for CPF is as follows:
- Ordinary Account: 2.5%
- Special Account: 4%
- MediSave Account: 4%
Unlike CPF’s three accounts, EPF contributions are split to 2 accounts. Account 1 holds 70% of the contributions, while the remaining 30% is stored in Account 2. The interest rate for EPF is also determined on a quarterly basis, and as of August 2023, it is as follows:
- Conventional savings: 5.35%
- Shariah savings: 4.75%
Based on these figures, EPF currently has a higher interest rate than CPF for all three types of accounts.
However, it is also important to note that EPF interest rates are subject to the country’s economic status and Ringgit value.
Wrapping up
In a world where financial security is paramount, understanding CPF contributions is essential. It’s not just a monthly deduction from your paycheck; it’s an investment in your future.
With the latest updates on CPF contribution rates in 2023, you’re equipped to plan your finances better.
So, what do you think about these new numbers? Comment your thoughts down below!
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