The CPF is a mandatory social security savings scheme funded by contributions from employers and employees. It is a social security system for Singapore Citizens and Permanent Residents to set aside funds for retirement.
The CPF is a key pillar of Singapore’s social security system, and serves to meet our retirement, housing and healthcare needs.
The government also helps to supplement the CPF savings of lower wage workers through schemes such as Workfare and top-ups to MediSave for senior citizens.
Both employers and employees have to make monthly CPF contributions that are split into 3 savings accounts:
- Ordinary Account (OA) - for housing, insurance, investment and education
- Special Account (SA) - for retirement-related financial instruments
- Medisave Account (MA) - for hospitalisation expenses and medical insurance
Employee wage payments that attract CPF contributions are categorised either as Ordinary Wages or Additional Wages.
Most types of wages attract CPF contribution e.g. basic salary, allowance, bonus, cash incentive, commission, overtime pay and NSmen make-up pay. Examples of payments that are excluded are reimbursement, termination benefit and gifts in kind.
Read more as : An Employer
Read more regarding : Employee Contribution Rates