CPF Changes in 2025: What Employers Need to Know
As we approach 2025, several significant changes to the Central
Provident Fund (CPF) in Singapore will impact employer compliance. These
updates are designed to enhance retirement adequacy for employees while
ensuring that employers are aligned with the new regulations. Here’s a
detailed look at the key changes and what employers need to do to stay
compliant.
1. Increase in CPF Ordinary Wage Ceiling
Starting January 1, 2025, the CPF Ordinary Wage (OW) ceiling will be raised to $7,400 per month. This ceiling limits the amount of ordinary wages that attract CPF contributions in a calendar month. Employers must adjust their payroll systems to accommodate this new ceiling, which will further increase to $8,000 by 2026.
2. Changes in CPF Contribution Rates
From January 1, 2025, CPF contribution rates for employees aged above 55 to 65 will increase. Employers need to update their payroll processes to reflect these new rates:
3. Allocation of Contributions
With the closure of the Special Account (SA), the increased
contributions for employees aged above 55 to 65 will be fully allocated
to the Retirement Account (RA) up to the Full Retirement Sum (FRS). Employers must ensure that these allocations are accurately reflected in their payroll systems.
4. No Changes to Annual Salary Ceiling
The CPF annual salary ceiling will remain at $102,000, which sets the maximum amount of CPF contributions payable for all salaries received in the year. Employers should continue to monitor total contributions to ensure they do not exceed this limit.
5. Government Support for Transition
To help employers manage the increased payroll costs due to higher CPF
contributions, the government has introduced transition support
schemes. Employers should take advantage of these schemes to offset some of the additional expenses.
Compliance Checklist for Employers
To ensure compliance with the new CPF regulations in 2025, employers should:
- Update payroll systems to reflect the new OW ceiling and contribution rates.
- Ensure accurate allocation of contributions to the RA for employees aged above 55 to 65.
- Monitor total contributions to stay within the annual salary ceiling.
- Utilize government support schemes to manage increased payroll costs.
By staying informed and proactive, employers can smoothly transition to the new CPF requirements and continue to support their employees’ retirement savings.
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