Budget 2023: CPF monthly salary ceiling will be raised from S$6,000 to S$8,000 by 2026
The CPF monthly salary ceiling will be increased in stages from September 2023.
SINGAPORE: The Central Provident Fund (CPF) monthly salary ceiling will be increased in stages from S$6,000 to S$8,000 by 2026, Finance Minister Lawrence Wong announced in his Budget speech on Tuesday (Feb 14).
The increase will be phased in over four years starting in September this year.
Mr Wong said the move was to “keep pace with rising salaries” and would help middle-income Singaporeans save more for their retirement.
The CPF monthly salary ceiling sets the maximum amount of CPF contributions payable for ordinary wages. The last time CPF salary ceilings were raised was in 2016.
From September 2023, the CPF monthly salary ceiling will be raised by S$300 to S$6,300. It will go up to S$6,800 from January 2024, S$7,400 from January 2025 and S$8,000 from January 2026.
NO CHANGE TO CPF ANNUAL SALARY CEILING
Apart from the CPF monthly salary ceiling, there is also the CPF annual salary ceiling which sets the maximum amount of CPF contributions payable for all wages received in a year. It includes both ordinary wages and additional wages.
It is currently set at S$102,000, equivalent to 17 times the monthly salary ceiling to account for bonuses.
There will be no change to the CPF annual salary ceiling at this juncture, said the Ministry of Finance (MOF).
It added that the annual salary ceiling would be reviewed “periodically” to ensure it continues to cover the “broad majority” of CPF members.
To ensure that employees earning the same annual salary receive the same CPF contributions regardless of their salary structure, the CPF monthly salary ceiling will eventually be set at one-twelfth of the CPF annual salary ceiling at a steady state, said MOF.