The Central Provident Fund (CPF) is one of Singapore’s most important national systems—yet for many people, it remains confusing. Whether you’re entering the workforce, planning to buy a home, preparing for healthcare costs, or thinking ahead toward retirement, understanding CPF is key to making sound financial decisions.
As Singapore continues adjusting CPF policies from 2024 to 2026—especially the phased increases in salary ceilings and greater emphasis on retirement adequacy—it’s essential to stay updated. This guide walks you through everything you need to know about CPF in 2025, explained in a simple, structured, and practical way.
What Exactly Is CPF and Why Does It Matter?
CPF is Singapore’s compulsory social security savings scheme. Both employees and employers contribute a percentage of the employee’s monthly income into the CPF system. These savings help fund major life needs:
✔ Home ownership — via your Ordinary Account (OA)
Used for HDB downpayments, monthly instalments, and housing grants.
✔ Healthcare — via your MediSave Account (MA)
Covers approved medical expenses, insurance premiums, and hospitalisation needs.
✔ Retirement — via your Special Account (SA) and later your Retirement Account (RA)
Provides long-term retirement income through CPF LIFE.
Rather than relying solely on cash savings, CPF ensures you are consistently building up funds meant specifically for the biggest financial responsibilities in life.
To make it easier for you, check out the CPF contribution rates as laid out by CPFB!
1. CPF Contribution Rates for Singaporeans & PRs (2025)
CPF contributions are split into two parts:
- Employee Contribution → Up to 20% of monthly wages
- Employer Contribution → Up to 17% of monthly wages
These rates vary depending on age, with younger workers contributing at higher rates to build early, higher-yielding savings.
Employer-Only Contributions
If you earn:
- Below $50/month → No CPF contributions.
- $50–$500/month → Employer contributes; employee does not.
Once monthly wages exceed $500, both employee and employer contribute according to age-based rates.
PR Contribution Rates
PRs contribute at lower “graduated rates” during their first two years unless they opt in early for full rates.
2. Understanding CPF Wage Ceilings (2024–2026)
CPF contributions are based on:
- Ordinary Wage (OW) — your monthly salary
- Additional Wage (AW) — bonuses & incentive payments
To keep CPF aligned with modern salary trends, Singapore is progressively increasing the monthly CPF salary ceiling.
CPF Monthly Salary Ceiling (OW Ceiling)
| Year | Ceiling Amount |
| 2024 | $6,800 |
| 2025 | $7,390 |
| 2026 | $8,000 |
This means CPF contributions will apply to a larger portion of your salary, helping you accumulate more for housing, healthcare, and retirement.
AW Ceiling
CPF on bonuses is capped using the formula:
$102,000 − CPF already contributed on OW for the year
3. CPF Annual Limit (2025)
The maximum CPF that can go into your accounts from all sources (mandatory + voluntary) is:
🔹 $102,000 per year
The annual limit prevents over-contribution and helps regulate the tax-relief framework for voluntary contributions.
4. The 4 CPF Accounts Explained Clearly
Before age 55, CPF contributions are split across three accounts:
1. Ordinary Account (OA)
Used for:
- HDB purchases
- Monthly housing instalments
- Education under CPF Education Scheme
- Insurance
- Approved investments
2. Special Account (SA)
Meant for:
- Long-term retirement savings
- Higher interest accumulation
- Stable financial planning
SA funds cannot be used for property unless under specific schemes.
3. MediSave Account (MA)
Used for:
- Hospital bills
- Day surgery
- Approved outpatient treatments
- MediShield Life, CareShield Life and Integrated Shield Plans
4. Retirement Account (RA)
Created at age 55 from SA + OA savings to prepare you for CPF LIFE payouts starting at age 65.
5. CPF Interest Rates in 2025
CPF offers guaranteed interest, making it one of the safest long-term savings instruments in Singapore.
| CPF Account | Base Interest | With Extra Interest |
| OA | 2.5% | Up to 3.5% |
| SA | 4.0% | Up to 5% |
| MA | 4.0% | Up to 5% |
| RA | 4.0% | Up to 5% |
Extra Interest
- First $60,000 of combined CPF balances earn +1%
- First $30,000 (age 55 and above) earn additional +1%
These enhancements significantly boost retirement savings over time.
6. How CPF Supports You Across Every Stage of Life
✔ From Your First Job
You start building housing, medical, and retirement savings right away.
✔ Buying Your First Home
OA helps with:
- Downpayment
- Legal fees
- Home protection insurance
- Monthly instalments
✔ Healthcare Protection
MA gives lifelong support for:
- Hospital bills
- MediShield Life premiums
- ElderShield / CareShield Life
✔ At Age 55
RA is created and you may withdraw part of your OA + SA savings (after meeting Retirement Sum requirements).
✔ At Age 65
You begin lifelong monthly income under CPF LIFE.
7. CPF in Action: A Simple Example (2025)
Employee Salary: $4,500/month
Age group: 35
| Party | Contribution % | Amount |
| Employer (17%) | 17% | $765 |
| Employee (20%) | 20% | $900 |
| Total CPF/month | — | $1,665 |
Distribution (approx):
- OA: 23%
- SA: 6%
- MA: 8%
This structure ensures both short-term and long-term protection.
8. Common CPF Tools You Should Use
CPF Board offers helpful calculators such as:
🔹 CPF Contribution Calculator
Compute employer–employee contributions instantly.
🔹 Retirement Sum Estimator
See how much you need at age 55.
🔹 CPF LIFE Estimator
Predict your monthly payouts at 65.
Conclusion: CPF Isn’t Just a Policy—It’s a Financial Lifeline
CPF may feel technical, but it’s designed to secure your housing, medical, and retirement needs in the most sustainable way possible. As CPF rules continue evolving through 2025 and 2026, staying informed ensures you make smarter financial decisions—whether you’re budgeting for your first home, reviewing insurance, or planning for retirement.
By understanding your accounts, contribution limits, and wage ceilings, you gain the confidence to use CPF strategically—not just passively.
Want to calculate your CPF contributions quickly?
Try Info-Tech’s CPF Calculator and receive instant, accurate CPF figures within minutes.
Frequently Asked Questions:
What is CPF and why is it important in Singapore?
CPF is a mandatory social security savings scheme that supports Singaporeans and PRs in retirement, housing, healthcare, and basic financial security.
How much CPF do employees and employers contribute?
Employees contribute up to 20% of their wages, while employers contribute up to 17%, depending on the employee’s age group and salary.
What is the CPF salary ceiling for 2024–2026?
The monthly salary ceiling increased to $6,800 in 2024 and will progressively rise to $8,000 by 2026. This ensures CPF contributions remain aligned with rising wages.
What are the different CPF accounts?
Your CPF goes into three accounts: Ordinary Account (OA) – Housing, insurance, investments, Special Account (SA) – Retirement savings, MediSave Account (MA) – Medical expenses. At age 55, savings from SA and OA transfer into the Retirement Account (RA).
What is the CPF Annual Limit?
The CPF Annual Limit is $102,000 per year, including both mandatory and voluntary contributions
