From 1 January 2026, the CPF Ordinary Wage ceiling rose to $8,000 a month and CPF contribution rates increased for employees above age 55 to 65. If your payroll is still running on 2025 settings, you are under-contributing for every affected employee, and that gap grows with every pay run until it is corrected.
This guide sets out exactly what changed, what stayed the same, the full 2026 rate table, and the specific steps your payroll process needs to reflect the update correctly.
What Changed in CPF Contribution Rates From 1 January 2026
Two separate changes took effect on the same date, and it is easy to update one while missing the other.
1. The CPF Ordinary Wage (OW) Ceiling Increased to $8,000
The OW ceiling caps how much of an employee’s monthly wage is subject to CPF contributions. It rose from $7,400 in 2025 to $8,000 in 2026, the final step in a phased increase that began in September 2023. Any Ordinary Wage above $8,000 a month is not subject to CPF.
This matters even if none of your employees have had a pay rise. Anyone earning $7,400 to $8,000 a month now has a larger portion of their salary subject to CPF than they did in 2025, which increases both the employer and employee contribution amounts for that person.
2. CPF Rates for Employees Above 55 to 65 Increased
This is part of a multi-year plan, recommended by the Tripartite Workgroup on Older Workers, to gradually align senior worker CPF rates with those of younger employees by around 2030. The 2026 step affects two age bands:
- Above 55 to 60: total rate rises from 32.5% to 34%, employer share up 0.5 percentage point to 16%, employee share up 1 percentage point to 18%
- Above 60 to 65: total rate rises from 23.5% to 25%, employer share up 0.5 percentage point to 12.5%, employee share up 1 percentage point to 12.5%
All of the additional contribution from this increase is credited to the employee’s Retirement Account, up to the Full Retirement Sum. Any excess flows to the Ordinary Account instead.
Full CPF Contribution Rate Table for 2026
This table applies to Singapore Citizens and Permanent Residents from their third year of PR status, earning more than $750 a month.
| Employee age | Employer share | Employee share | Total CPF rate |
|---|---|---|---|
| 55 and below | 17% | 20% | 37% (no change) |
| Above 55 to 60 | 16% (+0.5 pt) | 18% (+1 pt) | 34% (was 32.5%) |
| Above 60 to 65 | 12.5% (+0.5 pt) | 12.5% (+1 pt) | 25% (was 23.5%) |
| Above 65 to 70 | 9% | 7.5% | 16.5% (no change) |
| Above 70 | 7.5% | 5% | 12.5% (no change) |
What Stayed the Same in 2026
It is just as important to know what did not move, so you don’t apply a change that was never announced:
- CPF annual salary ceiling: unchanged at $102,000
- Additional Wage (AW) ceiling formula: unchanged ($102,000 minus total OW subject to CPF for the year)
- CPF Annual Limit: unchanged at $37,740
- Rates for employees aged 55 and below, and above 65: unchanged
- Foreign employees on Employment Passes, S Passes or Work Permits: still not covered by CPF
CPF Transition Offset: Help for Employers
To soften the cost impact of the senior worker rate increase, the Government is providing a one-year CPF Transition Offset (CTO). This covers half of the 2026 increase in the employer’s CPF contribution rate for every Singaporean and Permanent Resident employee aged above 55 to 65. Employers do not need to apply separately; the offset is applied automatically. Check the latest guidance on the CPF Board or IRAS website closer to your payroll cycle to confirm how the offset is credited for your business.
What This Means for Your Payroll Process
Update Your Payroll System or Software
Whether you run payroll through software, a spreadsheet, or an outsourced provider, confirm the CPF rate tables and the $8,000 OW ceiling are reflected before you process any 2026 pay run. If you use payroll software, check with your vendor that the update has been applied rather than assuming it happens automatically.
Recalculate Costs for Employees Aged Above 55
Run a quick cost projection for every employee above 55, since this is where both the wage ceiling change and the rate change apply together. For a business with several long-tenured staff in this age band, the combined effect on monthly payroll cost can be meaningful.
Communicate the Change to Affected Staff
Employees above 55 will see a smaller take-home pay this year because their own CPF contribution rate has also gone up. A short, proactive note explaining why net pay changed, before the first payslip goes out, avoids unnecessary queries to HR.
Check Special Cases Before You Assume the Standard Table Applies
- First- and second-year Permanent Residents use separate graduated contribution tables unless full-rate contributions have been jointly applied for
- Employees earning $750 or below a month are not subject to the same contribution structure
- Confirm which CPF Transition Offset entitlement applies before finalising employer cost budgets for senior staff
Common Payroll Mistakes to Avoid With the 2026 CPF Changes
- Reusing a 2025 CPF spreadsheet or rate table without checking for the update
- Applying the new senior worker rates but forgetting to also apply the new $8,000 OW ceiling
- Rounding employer and employee shares separately instead of following CPF Board rounding rules
- Assuming the CPF Transition Offset changes what you deduct from payroll, when it is an employer cost offset, not a payroll deduction adjustment
- Not checking whether long-serving employees have crossed into a new age band partway through the year
What's Coming After 2026
The Government has signalled that senior worker CPF rates will continue rising in phases until they are aligned with the standard rate, expected around 2030. Further adjustments for the above-55-to-65 age bands are anticipated from January 2027. We will have a separate article on that so keep a lookout for it!
Is Your Payroll Ready?
If you’re not confident your current payroll software or process reflects the 2026 CPF rate table and OW ceiling correctly, it’s worth a quick review before your next pay run rather than after. 361 Degree Consultancy helps Singapore SMEs set up and maintain payroll and HR software that stays compliant as CPF rules change, so this isn’t something you have to track manually every year.
Contact us at 6515 7906 or enquiry@361dc.com to have your payroll setup checked against the 2026 CPF rates.
Frequently asked questions
The Ordinary Wage ceiling is $8,000 a month from 1 January 2026, up from $7,400 in 2025. This is the maximum amount of monthly wages subject to CPF contributions.
No. The rate for this group remains 37% total, made up of 17% employer share and 20% employee share.
The CPF Transition Offset (CTO) will provide transitory wage offsets to help mitigate the rise in business costs due to the increase in CPF contribution rates for senior workers.
The standard 2026 table applies to PR employees from their third year of PR status. First- and second-year PR employees follow separate graduated rates unless full-rate contributions have been jointly applied for.
The increase is credited to the employee's CPF Retirement Account up to the Full Retirement Sum. Any amount beyond that is credited to the Ordinary Account instead.
No. CPF contributions do not apply to foreign employees on Employment Passes, S Passes or Work Permits.
Under-contributing CPF can result in late payment interest and enforcement action from the CPF Board. It is corrected by topping up the shortfall as soon as the error is identified, so the sooner your payroll settings are checked, the smaller any correction will be.
