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Singapore payroll revolves around CPF, a mandatory employer contribution of 17% for citizens and PRs aged 55 and below. With the new S$8,000 OW ceiling from January 2026, no PAYE tax system, and a sharp split between citizen/PR and foreign worker obligations, getting payroll right requires precision.
How Singapore Payroll Works
Singapore payroll is built around the Central Provident Fund (CPF), a mandatory savings scheme that requires employer contributions of up to 17% and employee contributions of up to 20% for citizens and Permanent Residents aged 55 and below. CPF is by far the largest payroll cost above gross salary and applies only to citizens and PRs — foreign workers on Employment Passes, S Passes, and Work Permits are completely exempt.
Beyond CPF, employers must pay the Skills Development Levy (SDL) for all employees (including foreigners) and the Foreign Worker Levy (FWL) for S Pass and Work Permit holders. There is no Pay-As-You-Earn (PAYE) income tax system — employees file their own taxes annually with the Inland Revenue Authority of Singapore (IRAS), and the employer's only tax obligation is submitting IR8A forms by March 1 each year.
The standard pay frequency is monthly, and salaries must be paid within 7 days of the end of the salary period under the Employment Act. There is no statutory 13th month pay, though the Annual Wage Supplement (AWS) is a common contractual benefit.
2026 update: From January 2026, the CPF Ordinary Wages (OW) ceiling increases from S$7,400 to S$8,000 per month. Employers with staff earning more than S$7,400 will see an immediate increase in CPF obligations. Payroll systems must be updated before the first January pay run. See CPF details →
Central Provident Fund
CPF is Singapore's mandatory social security savings scheme. Contributions are split across three accounts — Ordinary Account (housing, education, insurance), Special Account (retirement), and MediSave (healthcare). From age 55 the Special Account is closed, and the retirement share goes to the Retirement Account instead. Rates vary by age band and residency status, and are applied to wages up to the OW and annual ceilings.
CPF rates from January 2026 (citizens and 3rd-year PRs)
| Age Group | Employer | Employee | Total |
|---|---|---|---|
| 55 and below | 17% | 20% | 37% |
| Above 55 to 60 | 16% | 18% | 34% |
| Above 60 to 65 | 12.5% | 12.5% | 25% |
| Above 65 to 70 | 9% | 7.5% | 16.5% |
| Above 70 | 7.5% | 5% | 12.5% |
CPF wage ceilings
| Ceiling | 2025 | 2026 |
|---|---|---|
| Ordinary Wages (OW) ceiling | S$7,400/month | S$8,000/month |
| Annual ceiling | S$102,000 | S$102,000 |
The OW ceiling caps the amount of monthly ordinary wages subject to CPF. For wages above the ceiling, only the capped amount attracts CPF. Additional Wages (bonuses, commissions) are subject to a separate AW ceiling calculated as: Annual Limit (S$102,000) minus Total OW subject to CPF for the year. This means high base-salary employees may have a reduced AW ceiling.
Foreign workers and PRs
Use our interactive calculator to compute CPF, SDL, and take-home pay for citizens, PRs, and foreign workers.
Skills Development Levy and Foreign Worker Levy
Skills Development Levy (SDL)
SDL is a mandatory levy paid by employers for all employees, regardless of nationality. The rate is 0.25% of monthly remuneration, with a minimum of S$2 per employee and a maximum of S$11.25 per employee per month. SDL funds the national SkillsFuture system and is collected alongside CPF contributions through the CPF Board.
Foreign Worker Levy (FWL)
FWL is a monthly levy paid by employers for each S Pass and Work Permit holder. Since 1 September 2025 the S Pass levy is S$650/month in all sectors and tiers. Work Permit levies depend on the sector, the worker's skill level (basic or higher-skilled) and the company's share of foreign workers; in the services sector they range from S$300 to S$800/month.
| Levy | Rate | Applies To |
|---|---|---|
| SDL | 0.25% (min S$2, max S$11.25) | All employees (citizens, PRs, foreigners) |
| FWL (S Pass) | S$650/month (all sectors) | S Pass holders only |
| FWL (Work Permit) | S$300–S$800/month in services; varies by sector | Work Permit holders only |
Self-Help Group (SHG) contributions
Employees in the Chinese, Eurasian, Indian and Muslim communities make a small monthly contribution to their Self-Help Group fund: CDAC, the Eurasian Community Fund (ECF), SINDA, or the Mosque Building and Mendaki Fund (MBMF). CDAC and ECF apply to citizens and PRs, SINDA also covers Indian Employment Pass holders, and MBMF covers Muslim employees of any nationality, including foreign workers. The amount depends on monthly wages: CDAC S$0.50–S$3, ECF S$2–S$20, MBMF S$3–S$26, and SINDA S$1–S$30. These are employee-only contributions: employers deduct them from wages and pay them with the CPF submission, but do not bear the cost. Employees who want to opt out or change the amount contact the Self-Help Group directly.
No Monthly Tax Withholding (No PAYE)
Unlike most countries, Singapore does not require employers to withhold income tax from monthly payroll. There is no PAYE system. Instead, employees file their own annual tax returns with the Inland Revenue Authority of Singapore (IRAS) and pay tax directly. The employer's obligation is limited to submitting employment income information (Form IR8A and appendices) to IRAS by March 1 each year.
The only exception is when a foreign employee ceases employment or leaves Singapore. In this case, the employer must file Form IR21 at least one month before the employee's last day and withhold all monies due until IRAS issues a tax clearance. Failure to do so makes the employer personally liable for the employee's outstanding tax.
| Annual Chargeable Income | Tax Rate |
|---|---|
| First S$20,000 | 0% |
| Next S$10,000 | 2% |
| Next S$10,000 | 3.5% |
| Next S$40,000 | 7% |
| Next S$40,000 | 11.5% |
| Next S$40,000 | 15% |
| Next S$40,000 | 18% |
| Next S$40,000 | 19% |
| Next S$40,000 | 19.5% |
| Next S$40,000 | 20% |
| Next S$40,000 | 22% |
| Next S$100,000 | 23% |
| In excess of S$500,000 | 24% |
Non-residents: Individuals who are tax non-residents in Singapore (present for fewer than 183 days in a calendar year) are taxed at a flat rate of 15% on employment income or the resident progressive rate, whichever is higher. Short-term employment of 60 days or fewer may be exempt.
What It Actually Costs to Employ Someone
Below are two scenarios for an employee earning S$6,000/month gross salary, showing the stark difference in employer cost between a Singapore citizen and a foreign EP holder.
| Component | Employer (S$) | Employee (S$) |
|---|---|---|
| Gross salary | 6,000 | 6,000 |
| CPF (17% ER / 20% EE) | 1,020 | 1,200 |
| SDL (0.25%, capped) | 11.25 | — |
| Income tax withholding | — | — |
| Total employer cost | ~7,031.25 | 4,800 take-home |
* Total employer cost is approximately 117.2% of gross salary. Employee take-home is S$4,800 after 20% CPF employee deduction. No income tax is withheld monthly.
| Component | Employer (S$) | Employee (S$) |
|---|---|---|
| Gross salary | 6,000 | 6,000 |
| CPF | 0 | 0 |
| SDL (0.25%, capped) | 11.25 | — |
| Income tax withholding | — | — |
| Total employer cost | ~6,011.25 | 6,000 take-home |
* Total employer cost is approximately 100.2% of gross salary. No CPF, no FWL (EP holders are exempt), and no monthly tax withholding. The employee files taxes personally with IRAS.
The citizen/foreigner gap: Employing a Singapore citizen at S$6,000 costs the employer roughly S$7,031 (117.2% of gross), while the same salary for an EP holder costs just S$6,011 (100.2% of gross). The S$1,020 monthly difference is entirely CPF — and it's why headcount planning in Singapore must account for workforce composition.
Deadlines, Forms, and Common Mistakes
Monthly and annual deadlines
| Obligation | Deadline | Details |
|---|---|---|
| CPF contributions | 14th of the following month | Monthly CPF return + payment via CPF EZPay |
| SDL contributions | 14th of the following month | Included in CPF submission |
| FWL payment | 14th of the following month | Via MOM FWL portal or GIRO |
| IR8A / IR8S / Appendix 8A | March 1 (annual) | Annual employee income reporting to IRAS |
| Form IR21 | At least 1 month before the last day | Tax clearance for departing foreign employees |
| SHG fund contributions | 14th of the following month | Deducted from eligible employees’ wages and paid with CPF |
Common payroll mistakes
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Frequently Asked Questions
For a Singapore citizen aged 55 or below earning S$6,000/month, total employer cost is approximately S$7,031.25 — roughly 117.2% of gross. This includes CPF employer share (17%), SDL (0.25% capped at S$11.25), and no income tax withholding obligation.
No. Singapore has no statutory 13th month pay requirement. The Annual Wage Supplement (AWS) is a common market practice (typically one month’s salary) but is contractual, not legally mandated. However, if an AWS is stated in the employment contract, it becomes enforceable.
Singapore does not operate a Pay-As-You-Earn (PAYE) system. Employees file their own annual tax returns with IRAS, and the employer’s role is limited to reporting compensation via IR8A by March 1 each year. There is no monthly tax deduction from payroll.
From January 2026, the Ordinary Wages ceiling rises from S$7,400 to S$8,000 per month. For employees earning more than S$7,400, this means higher CPF contributions from both employer and employee. Payroll systems must be updated before the January pay run.
No. CPF contributions are mandatory only for Singapore citizens and Permanent Residents. Employment Pass, S Pass, and Work Permit holders are not eligible for CPF. However, SDL applies to all employees regardless of nationality, and FWL applies to S Pass and Work Permit holders.
Late CPF contributions attract late payment interest of 1.5% per month from the day after the due date, with a minimum of S$5. The CPF Board may also offer to compound the offence for up to S$1,000. If the arrears are not paid, the Board can prosecute: a first conviction carries a fine of S$1,000 to S$5,000 per offence and/or up to 6 months’ jail, and a subsequent conviction a fine of S$2,000 to S$10,000 per offence and/or up to 12 months’ jail.
The EOR page covers the full employment relationship — contracts, benefits, termination, visa sponsorship, and compliance with the Employment Act. This payroll page focuses specifically on the mechanics of CPF contributions, SDL, FWL, income tax reporting, and pay-run processing.
