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SINGAPORE: Finance Minister Lawrence Wong announced in his budget speech on Tuesday (14 February) that the monthly salary ceiling for the Central Provident Fund (CPF) will be gradually increased from S$6,000 to S$8,000 by 2026.

Starting in September of this year, the rate will be raised in stages over four years.

Wong said the move was meant to “keep pace with salary increases” and would help middle-income Singaporeans save more for retirement.

The CPF Monthly Salary Cap sets the maximum amount of CPF contributions that are paid against regular wages. The last time the CPF salary cap was increased was in 2016.

From September 2023, the CPF monthly salary cap will increase by S$300 to S$6,300. It will increase 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 cap

Apart from the monthly CPF salary cap, there is also an annual CPF salary cap that sets the maximum amount of CPF contributions paid for all wages received in a year. It includes both regular wages and additional wages.

It is currently set at S$102,000, which is 17 times the monthly salary ceiling after bonuses are taken into account.

According to the Ministry of Finance (MOF), there are no changes to the CPF annual salary cap at this time.

He added that the salary cap will be reviewed “regularly” to ensure it continues to cover the “majority” of CPF members.

To ensure that employees earning the same annual salary receive the same CPF contributions regardless of their salary structure, the monthly CPF salary cap will eventually be set at 1/12th of the steady state CPF annual salary cap. MOF said. Budget 2023: CPF monthly salary cap will increase from S$6,000 to S$8,000 by 2026

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