Recently my wife and I applied and got approved for Singapore Permanent Residency. After completing the formalities the most significant immediate change is the contribution to CPF which is Singapore’s mandatory social security savings scheme requiring contributions from employers and employees. CPF contributions start from the date you obtain SPR status, which is the date of the entry permit.
Being a relentless budgeter I needed to know exactly how much I and my employer would have to contribute so that I could adjust my budget accordingly as the employee contributions get deducted from the monthly salary.
After doing some research I discovered that there is a “graduated” approach to CPF contributions for new SPR’s where the contributions gradually increase in the first and second year and then upon reaching the third year are at the full amount.
Note: There is an option for employers to contribute the full amount for year 1 and year 2 and the employee can use the graduated rate, but obviously this has to be negotiated with your employer and good luck trying to win that one.
Now whilst it’s true that the contributions rates are a percentage (37%) of your salary the key factor here is that it is capped at a maximum salary. For example if you earn 10k a month, your contribution is calculated on the first $6k of ordinary income.
The CPF website is quite overwhelming with information, but after playing with the CPF calculators for a while I was able to clarify exactly what the contributions were year by year.
Monthly CPF Contributions
| Year 1 | Year 2 | Year 3+ | |
| Employee | $300 | $900 | $1200 |
| Employer | $240 | $540 | $1020 |
| Total | $540 | $1440 | $2220 |
Note: Assumes salary > 6k and age < 55 and only applies to Ordinary Wages.