The Central Provident Fund is Singapore's compulsory social security savings system. Both employer and employee contribute a percentage of wages, and the money is allocated across separate accounts earmarked for different purposes rather than pooled into a single balance.
The account structure
- An ordinary account, usable for housing, insurance, investment and education
- A special account, aimed at retirement and longer-term investment
- A MediSave account, reserved for medical expenses and approved health insurance
- A retirement account, formed later in life from the other balances
Who it applies to
CPF contributions are required for Singapore citizens and permanent residents. They are not payable for foreign employees on work passes, who are covered by different arrangements. This distinction matters when estimating employer cost, because two employees on identical salaries can carry very different contribution obligations depending on residency status.
Contribution rates vary by the employee's age band, stepping down as employees get older, and are subject to a wage ceiling. Rates are reviewed periodically, so current figures should be checked rather than assumed.
Why it matters when hiring internationally
CPF is usually the largest employer-side statutory cost in Singapore, and getting the residency and age treatment right is what makes a cost estimate trustworthy. A quote that applies a flat percentage regardless of who is being hired is a sign the calculation has been simplified past the point of usefulness.