How are CPF contribution rates calculated

CPF contribution rates are applied differently for your staff (CPF reference)

This depends on the following -

Citizenship – Singapore Citizen; or Singapore PR (SPR) in the 1st and 2nd year or from the 3rd year of obtaining SPR status;
PR Contribution Rates
Age group
Student classes who are exempted

Citizenship

There are 3 types of contribution rates for Citizenship

Singapore Citizens or Singapore Permanent Residents (3rd year onwards)
Singapore Permanent Residents (SPR) during 1st year of SPR status
Singapore Permanent Residents (SPR) during 2nd year of SPR status

Foreigners are exempted from CPF contributions

Note that the 1st year rate for CPF contribution will apply the day your staff becomes an SPR. See here on how to properly pro-rate this. The second and third year rates will apply from the month following the anniversary of your staff’s SPR conversion. (CPF reference)

PR Contribution Rates

There are 3 types of contribution rates for Permanent Residents -

Graduated Employer & Employee Rates (G/G)
Full Employer & Graduated Employee Rates (F/G)
Full Employer & Employee Rates (F/F)

(F/G) & (F/F) is the scenario where you and / or your staff choose to contribute CPF at higher rates in the first two years after your staff has obtained Singapore Permanent Resident (SPR) status, while (G/G) is the default rate of contribution (CPF reference).

The most commonly used option is Graduated Employer & Employee Rates (G/G), and this is selected by default. Note that we only support Graduated Employer & Employee Rates (G/G) at this point of time, if you need to support (F/G) or (F/F) do reach out to us.

Age Group

There are different contribution rates for different age groups -

55 & below
Above 55 - 60
Above 60 - 65
Above 65 - 70
Above 70

For the purpose of CPF contribution, your staff is considered to be “55 years”, “60 years”, “65 years” or “70 years” in the month of their 55th, 60th, 65th or 70th birthday. They will be counted above 55, 60, 65 or 70 years the month after their 55th, 60th, 65th or 70th birthday. (CPF Reference)

For example, if your staff’s 55th birthday falls on 13 January 2022.

In January 2022, they will be in the age group “55 & below”
In February 2022, they will be in the age group “Above 55 - 60”

Student classes who are exempted

CPF contributions are exempted for certain classes of student employees. Find out more about who you need to pay CPF contributions for (CPF Reference) under the header “Students”.

How to set up employees so CPF contribution is calculated correctly

In your staff’s profile, please ensure that you complete the following fields accurately:

Staff’s date of birth
Citizenship status

If citizenship status is PR, please make sure that you fill up PR effective date correctly

If the staff is part of “Student classes who are exempted" from CPF contributions, exclude them from CPF contributions in Statutory & Payment > Other Statutories > Exclude from CPF Contributions

Additionally, you can allow the employer to fully cover the CPF payment by checking the “Allow Full Employer CPF”.

How do we calculate CPF contributions for multiple payruns

CPF is ultimately calculated and paid by the month. However, within a month, you might run multiple payruns for a single staff. CPF contributions for each payrun will be an estimate, and uses the below formula:

CPF for payrun [N] = CPF for all payruns till [N] - CPF for previous payruns till [N-1]

Where payruns occur in chronological sequence

Example scenario:

Bob is paid twice this month, $500 in an earlier payrun - payrun 1, and $1000 in a later payrun, payrun 2.
Assuming he is a Singaporean citizen, under 55, who needs to pay CPF
His CPF for payrun 1 of $500
- Employer CPF = EmployerCPF($500) = $85
- Employee CPF = EmployeeCPF($500) = $0
His CPF for payrun 1+2 of $500 + $1000 = $1500
- Employer CPF = EmployerCPF($1500) = $255
- Employee CPF = EmployeeCPF($1500) = $300
His CPF for payrun 2
- Employer CPF = Employer CPF of payrun 1+2 - Employer CPF of payrun 1 = $255 - $85 = $170
- Employee CPF = Employee CPF of payrun 1+2 - Employee CPF of payrun 1 = $300 - $0 = $300

How to Prorate CPF for PR Year 1 (PR1)

Frequently Asked Questions

Are CPF contributions rounded to the nearest dollar? (CPF Reference)

Yes, they are. The following is the full formula on how it is rounded:

Compute the total CPF contribution (rounded to the nearest dollar). Cents should be dropped for an amount less than 50 cents. An amount of 50 cents and above should be treated as an additional dollar.
Compute the employee’s share of CPF contribution (cents should be dropped).
Employer’s share = Total contribution - Employee’s share

What are some common mistakes made by employers, and how do I rectify them?

Refer to CPF Reference