KEY HIGHLIGHTS
- CPF Ordinary Wage ceiling rises to S$8,000 from Jan 2026
- Older workers (55–65) get higher CPF contribution rates
- Take-home pay dips slightly, but retirement savings grow
From 1 January 2026, CPF rules are changing again — and yes, this one affects a lot of working Singaporeans.
If you earn above S$7,400 or you’re aged 55 to 65, expect your CPF deductions to go up. Slightly less cash now, more savings later. Worth it or not? Let’s break it down.
CPF Ordinary Wage Ceiling Hits S$8,000
This is the final step of a multi-year CPF adjustment announced in Budget 2023.
The CPF Ordinary Wage (OW) ceiling — the maximum monthly salary subject to CPF — will increase to S$8,000.
That means CPF will now be calculated on a bigger portion of your salary.
How the OW Ceiling Has Changed
| Year | CPF OW Ceiling |
|---|---|
| Before Sep 2023 | S$6,000 |
| Sep 2023 | S$6,300 |
| Jan 2024 | S$6,800 |
| Jan 2025 | S$7,400 |
| Jan 2026 | S$8,000 |
What Employees Should Expect
If you earn more than S$7,400 a month, January 2026 is when you’ll feel it.
Lower take-home pay
A larger chunk of your salary goes into CPF, so monthly cash-in-hand drops a bit.
Higher CPF balances
Both you and your employer contribute more. This boosts your:
- Ordinary Account (OA)
- Special Account (SA)
- MediSave Account (MA)
Over time, this compounds into a much stronger retirement buffer. No need to overthink — it’s forced savings, Singapore-style.
What Employers Need to Know
Employers must now pay CPF on wages up to S$8,000.
For mid- to high-income staff, this raises total manpower costs. Budget planning for 2026 should already factor this in.
Higher CPF Contribution Rates for Older Workers
Good news for senior workers — CPF rates are going up again.
From 1 January 2026, workers aged above 55 to 65 will see a 1.5 percentage point increase in total CPF contributions.
How the Increase Works
- Who: Ages >55–60 and >60–65
- Total increase: +1.5%
- Typical split:
- Employer: +0.5%
- Employee: +1.0%
The exact breakdown will be confirmed closer to 2026.
Where does the money go?
Straight into the Retirement Account (RA) to boost CPF LIFE payouts later on.
This aligns with Singapore’s push to support longer working lives as retirement and re-employment ages rise.
CPF Transition Offset: Help for Businesses
To ease the impact on employers, the government is rolling out the CPF Transition Offset.
What This Means for Employers
- Duration: One year (2026)
- Support: Government covers 50% of the increase in employer CPF contributions
- Who qualifies:
- Singapore Citizens and PRs
- Employees aged 55 to 65
Most companies don’t need to apply. Offsets are usually calculated automatically and paid via PayNow Corporate.
How to Prepare for January 2026
For Employees
Check your numbers
Once CPF calculators are updated, estimate your new take-home pay.
Adjust expectations
That small monthly drop funds your housing, healthcare, or future retirement income.
Honestly speaking, future-you will thank you.
For Employers
Update payroll systems
Make sure your software reflects:
- S$8,000 OW ceiling
- New senior worker rates
Plan cash flow
Remember to factor in the 50% CPF Transition Offset when budgeting.
Talk to your staff
A quick explanation goes a long way when payslips change.
Frequently Asked Questions
1. Will everyone be affected by the S$8,000 CPF ceiling?
No. Only employees earning above S$7,400 per month will see higher CPF deductions.
2. Does the CPF increase mean I’m losing money?
Short term, yes — your take-home pay dips slightly. Long term, your CPF savings grow faster, especially for retirement.
3. Do employers need to apply for the CPF Transition Offset?
Usually no. The offset is automatically computed and paid to eligible employers via PayNow Corporate.
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