Country: Singapore
Compliance category: Central Provident Fund (CPF) and Personal Income tax (PIT)
Regulatory Information:
Regulation: Singapore Budget statement, 2025
Notification date: February 18, 2025
Source: annexd4.pdf, annexh2.pdf
Updates in Compliance:
Summary:
Prime Minister and Minister for Finance, Mr. Lawrence Wong, delivered Singapore’s FY2025 Budget Statement on 18 February 2025 in Parliament, reflecting the grit and resilience of generations of Singaporeans in building the nation. In the face of new global uncertainties, the Budget aims to address current issues, such as rising costs and economic growth, while ensuring long-term prosperity. From a payroll perspective, the Budget introduces measures to support businesses, enhance financial security for senior workers, and promote lifelong learning for the workforce.
Key proposals in the Budget from Individual and Payroll perspective:
1. Central Provident Fund (CPF)
In line with the recommendations from the Tripartite Workgroup on Older Workers, the Singapore Government is committed to gradually increase the CPF contribution rates for Singaporean and Permanent Resident workers aged 55 to 70 to boost retirement savings.
Below is the current and target CPF contribution rates (both employer and employee) based on age band:
| Age Band | 2016–2021 | CPF Contribution Rates (As of 1 January 2025) | By 2030 |
| 55 and below | 37.00% | 37.00% | No Change |
| Above 55 to 60 | 26.00% | 32.50% | 37.00% |
| Above 60 to 65 | 16.50% | 23.50% | 26.00% |
| Above 65 to 70 | 12.50% | 16.50% | 16.50% |
| Above 70 | 12.50% | 12.50% | No change |
From 2022, the Government began raising CPF contribution rates for senior workers (ages 55 to 70).
In 2026, the contribution rates for workers aged 55 to 65 will rise by 1.5 percentage points, with contributions directed towards the CPF Retirement Account (RA) to encourage retirement savings.
For employees aged between 55 to 60 years, the aim is to make their CPF contribution rates equal to those of workers aged 55 and below
CPF Contribution Rates for Senior Workers from 1 January 2026
| Age Band | Total | Employer | Employee |
| 55 and below | No Change | ||
| Above 55 to 60 | 34.00% (+1.5) |
16.00% (+0.5) |
18.00% (+1) |
| Above 60 to 65 | 25.00% (+1.5) |
12.50% (+0.5) |
12.50% (+1) |
| Above 65 to 70 | No Change | ||
| Above 70 | No Change | ||
Note:
- The CPF contribution rates are stated as a percentage of wages above $750 per month
- The + point figures in parentheses refer to the increase in CPF contribution rates from 1 January 2026, compared to contribution rates as of 1 January 2025.
To mitigate the rise in business costs due to this increase, the Government will provide employers with a one-year CPF Transition Offset equivalent to half of the 2026 increase in employer CPF contribution rates i.e., 0.25%
Effective Date: January 01, 2026
2. Personal Income Tax (PIT)
As a part of the SG60 package, a PIT Rebate of 60% of tax payable will be provided to all tax resident individuals for Year of Assessment (YA) 2025, i.e., employment income/ income earned in the year 2024. The rebate will be capped at $200 per taxpayer
Effective Date: YA 2025
Our Analysis:
The phased increase in CPF contributions for senior workers is part of the Government’s long-term strategy to ensure better retirement savings. These changes began in 2022 and will continue until the target year of 2030.
Additionally, for Financial Year 2024, revenue collections exceeded expectations, prompting the government to offer a PIT Rebate of 60% of tax payable to all tax resident individuals for YA 2025 under the SG60 package. This is a well-calibrated move to provide immediate financial relief to individuals, stimulate domestic spending, and celebrate a key national milestone. It reflects the government’s proactive approach to managing economic challenges while supporting the financial well-being of its citizens.
