CPF is a mandatory savings scheme. Money goes in from both the employer and the employee every month, and it is held for the employee across retirement, housing, and healthcare rather than paid out as cash.
The first thing to know is who it covers. Singapore Citizens and Permanent Residents are covered. Employees on work passes are not, and no CPF is payable for them at all. Getting this wrong in either direction is one of the more common payroll errors, and both directions are expensive.
The second is who pays. There are two contributions, not one. The employer pays a share on top of the salary, and the employee pays a share deducted from it. For Singapore Citizens and Permanent Residents from their third year onward who are aged 55 and below and earn more than S$750 in total wages for the month, the full rates are 17 percent from the employer and 20 percent from the employee, so 37 percent in total. Lower-wage bands work differently: no CPF is due at S$50 or below, only the employer contributes above S$50 and up to S$500, and the employee share is graduated above S$500 and up to S$750.
Those rates apply to wages up to a monthly ceiling, which rose to S$8,000 in January 2026 after several years of scheduled increases. There is also an annual ceiling covering ordinary and additional wages together, which is the one that catches people out at bonus time.
Rates step down as employees get older, in bands beginning at 55. Permanent Residents contribute at graduated rates for their first two years by default, though the employer and employee can jointly apply to pay full rates from the start.
Where the money goes is the part most employees never see explained. Before age 55, contributions are allocated across the Ordinary, Special, and MediSave Accounts. At 55, a Retirement Account is created and the Special Account is closed; contributions that would have gone to the Special Account are allocated to the Retirement Account instead, up to the Full Retirement Sum. The proportions shift with age.
CPF contributions are due on the last day of the calendar month. CPF Board can take enforcement action if they remain unpaid after the fourteenth of the following month, or the next working day when the fourteenth falls on a weekend or public holiday. Late payment interest starts from the first day after the due date, so the later enforcement date is not extra operating time.
None of this is conceptually hard. It is detailed, it changes on a schedule set by someone else, and it has to be right every single month. That combination is precisely why it is worth taking off a person’s desk.