Increase to the CPF OW Ceiling
The Ordinary Wage (OW) ceiling for Central Provident Fund (CPF) contributions for all Singapore Citizens and Singapore Permanent Residents will gradually be raised, as announced in the Budget Speech 2023. Between 1 September 2023 and 1 January 2026, the ceiling will increase from $6,000 to $8,000. As a result of this increase, the maximum amount of employees’ ordinary wages that attract CPF contributions will increase as of 1 September 2023.
The increases to the OW ceiling will be implemented in four stages, to allow both employers and employees to adjust to the changes. The first increase, from $6,000 to $6,300, will take effect on 1 September 2023.
The table below displays the intended OW and annual salary ceilings for 2023 to 2026.
| Effective Date | CPF OW Ceiling | CPF Annual Salary Ceiling |
|---|---|---|
| Current | $6,000 | $102,000 |
| From September 2023 | $6,300 | |
| From January 2024 | $6,800 | |
| From January 2025 | $7,400 | |
| From January 2026 | $8,000 |
You can expect SimplePay to perform a recalculation of the AW ceiling, based on the last payslip period of the employee, either at the end of the 2023 tax year, or upon termination of employment. This will help ensure that any legislative changes related to CPF made during the year are accounted for. Therefore, this recalculation will sometimes result in changes to an employee’s CPF contributions for the year.
In line with the CPF Board’s mandate, the following will remain unchanged:
- The CPF annual salary ceiling of $102,000.
- The CPF Annual Limit of $37,740.
More information about CPF is available on our help page.
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Take care,
Team SimplePay