CPF contribution changes from 1 Jan 2026. How will they affect you?

What happened?

As we enter 2026, there are important changes to Central Provident Fund (CPF) contributions that may affect you.

From 1 January 2026, the CPF monthly salary ceiling will be raised further to its final target level.

This follows previous increases in the CPF monthly contribution ceiling over the last few years. 

It also marks the completion of the multi-stage adjustment that began in September 2023.

Additionally, CPF contribution rates for senior workers aged above 55 to 65 will be increased to strengthen their retirement adequacy.

I have seen discussions in the Beansprout community about what the CPF monthly salary ceiling is and what this change might mean for them.

In this article, we will go through all you need to know about the changes in CPF contribution in 2026 and how it might affect you.

What is the CPF Contribution Ceiling?

If you are new to the CPF monthly salary ceiling, it is the maximum amount of monthly wages eligible for CPF contributions. 

As a recap, the CPF monthly salary ceiling was increased to $7,400 on 1 January 2025. This followed an increase to S$6,800 on 1 January 2024 from S$6,300 on 1 September 2023.

This ceiling is now set to be raised to its final target level. 

From 1 January 2026, the CPF monthly salary ceiling will be raised from S$7,400 to S$8,000.

This means that if your salary is above S$8,000 per month, you will not be required to make CPF contributions on the portion of your monthly salary above S$8,000.

There is no change to the CPF annual salary ceiling, which will remain at S$102,000. The CPF contribution annual limit will also remain at S$37,740. 

To learn more about what contributes towards your ordinary wage and additional wage, refer to this guide by CPF. 

Who will be affected by the increase in CPF monthly salary ceiling?

Two main groups of employees will be affected by these changes:

1. High-income earners: Employees with a monthly salary above S$7,400 will be affected by the increase in the salary ceiling  from 1 January 2026.
2. Senior Workers: Employees aged above 55 to 65 will see changes to their contribution rates, regardless of their salary level, provided they earn more than S$750 per month.

This means that if you are a senior worker earning above S$7,400, you will be affected by both changes.

However, recall that CPF contributions are made up of: (i) contributions by employee (ii) contributions by employer.

Employees aged 55 and below are required to contribute 20 percent of their salary while their employer contributes another 17 percent of the same salary.

Your employers will now have to contribute a higher amount due to the increase in CPF monthly salary ceiling.

This also means that the cost of hiring employees will go up across the board, even if salaries remain the same.

How will the increase in CPF monthly salary ceiling affect your take-home pay?

If your salary is greater than S$7,400 a month, your monthly take-home pay will be reduced due to the higher CPF monthly salary ceiling.

This is due to the increased CPF contributions you must make on a monthly basis.

If you earn a monthly wage of S$8,000, your 20% employee contribution will currently be S$1,480 as it is capped by the S$7,400 ceiling.

When the CPF monthly salary ceiling is raised to S$8,000 on 1 January 2026, your 20% employee contribution will increase to S$1,600.

This would mean that your CPF contribution as an employee will increase by S$120 per month compared to 2025. Your take-home pay would also fall by S$120 per month as a result.

To provide an illustration of how you will be affected at each stage of the staggered changes, we summarise the changes in the table below. 

How will the increase in contribution rates affect senior workers?

Additionally, for employees aged above 55 to 65, CPF contribution rates will increase by a combined total of 1.5% from 1 January 2026 to help strengthen retirement adequacy.

• Employer contribution: Increases by 0.5%
• Employee contribution: Increases by 1%

These additional contributions will be fully allocated to the Retirement Account (RA) up to the Full Retirement Sum (FRS), to help senior workers save more for retirement.

Here are the new contribution rates for senior workers aged above 55 to 65 from 1 January 2026:

While this is beneficial for long-term savings, it will reduce take-home pay slightly due to the higher employee contribution.

As an example, for an employee aged 58 earning S$5,000 per month,

• In 2025: You contributed 17% (S$850).
• In 2026: You will contribute 18% (S$900).

How will the increase in CPF monthly salary ceiling affect your CPF savings?

As the CPF contributions increase, your retirement savings will grow at a faster pace in the long-term.

If you earn S$8,000 a month, you will receive an additional S$400 in employee CPF contributions and S$340 in employer CPF contributions per month when the full changes take effect in 2026, compared to the contributions before 1 Sep 2023.

This means that there will now be an additional S$740 going into your CPF accounts every month, or S$8,880 every year.

CPF contributions are allocated to three accounts: Ordinary Account (OA), Special Account (SA) and MediSave Account (MA). The allocation between the three accounts will differ depending on your age. You can refer to the CPF website for more details on the contribution breakdown.

With an interest of at least 2.5% earned across your CPF accounts, these savings will still build up to a considerable amount when compounded over a long period of time.

For illustration purposes, we look at a 30-year-old working adult with a monthly wage of S$8,000 and how his total CPF contributions will increase for the next 25 years until he reaches 55 years old.  

The illustration assumes that: (i) salary increments follow the staggered increases in CPF monthly salary ceiling (ii) CPF interest rates earned are not taken into account.

Of course, your wages will hopefully go up over time as well, which will allow you to save more for retirement.

With the illustration shown in the table below, the increase in CPF monthly salary ceiling can make a big difference of more than S$200,000 in the long term. 

What would Beansprout do?

If your monthly salary is above S$7,400, the increase in the CPF monthly salary ceiling to S$8,000 from 1 January 2026 onwards will lead to some reduction in your take-home pay.

However, it will also help to build up your retirement savings as the higher CPF contributions are accumulated over time. 

For senior workers above 55 years old to 65 years old, the additional contribution goes directly to your Retirement Account (RA). This helps you reach your Full Retirement Sum (FRS) faster, translating to higher monthly payouts from CPF LIFE in the future.

As we approach 2026, you may want to consider different ways to grow our CPF retirement savings.

One of the options is to transfer funds from your CPF Ordinary Account (OA) to your CPF Special Account (SA) to earn a higher interest rate. We discuss the pros and cons of transferring to your SA here. 

Alternatively, you may also choose to invest your CPF funds. We look at the different investment options eligible for the CPF Investment Scheme here.

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