Singapore CPF Explained 2025: Complete Guide for Expats
Updated with 2025 CPF rates
CPF - the Central Provident Fund - is Singapore's mandatory savings system, and if you're new to Singapore, it's going to take a pretty big chunk out of your paycheck. But it's not all bad news. Let's break down what it is and how it works.
What is CPF?
Think of CPF as forced savings on steroids. If you're a Singapore Citizen or Permanent Resident, you and your employer contribute a combined 37% of your salary into various accounts. Yes, 37%. That money gets divided into different pots for housing, retirement, and healthcare. The good news? You get government-guaranteed interest rates of 2.5-6%, which beats most savings accounts.
CPF covers pretty much everything:
- Housing: Down payments and mortgages
- Retirement: Your future pension
- Healthcare: Medical expenses and insurance premiums
- Education: Sometimes for your kids' education
- Investments: Approved schemes to grow your money
The Basics
- Total contribution: Up to 37% (20% from you, 17% from employer)
- Interest rate: 2.5% to 6% per year (government guaranteed)
- Who pays: Only Citizens & PRs (expats on work passes are exempt)
- When you can withdraw: 55+ with restrictions
CPF Contribution Rates 2025
For Workers Aged 55 and Below
| Component | Employee | Employer | Total |
|---|---|---|---|
| Ordinary Account (OA) | 15% | 10.5% | 25.5% |
| Special Account (SA) | 4% | 4.5% | 8.5% |
| MediSave Account (MA) | 1% | 2% | 3% |
| TOTAL | 20% | 17% | 37% |
Monthly salary ceiling: S$6,000 (CPF only calculated on first $6,000 of monthly salary)
Annual salary ceiling: S$102,000
Example: S$5,000 Monthly Salary
- Employee contribution: S$5,000 × 20% = S$1,000 deducted
- Employer contribution: S$5,000 × 17% = S$850 added
- Total CPF: S$1,850 per month
- Your take-home: S$4,000
- But your savings grow by S$1,850/month!
Example: S$10,000 Monthly Salary
- Employee contribution: S$6,000 × 20% = S$1,200 (capped)
- Employer contribution: S$6,000 × 17% = S$1,020 (capped)
- Total CPF: S$2,220 per month
- Your take-home: S$8,800
- Note: No CPF on the $4,000 above the ceiling
The Three CPF Accounts
1. Ordinary Account (OA)
Receives: 62.5% of total contributions
Interest rate: 2.5% per year (minimum)
Can be used for:
- Housing (down payment, mortgage, renovations)
- CPF approved investments
- Education (yourself or children)
- Insurance premiums
2. Special Account (SA)
Receives: 23% of total contributions
Interest rate: 4% per year (minimum), up to 6% on first $60k
Can be used for:
- Old age (combined with OA into Retirement Account at 55)
- CPF approved investments
- Cannot be used for housing or withdrawn early
3. MediSave Account (MA)
Receives: 8% of total contributions
Interest rate: 4% per year (minimum), up to 6% on first $60k
Can be used for:
- Hospitalization expenses
- Day surgery
- MediShield Life premiums (compulsory health insurance)
- Certain outpatient treatments
- Parents' and grandparents' medical expenses
CPF Interest Rates: Better Than Bank!
| Account | Base Rate | Extra Interest (First $60k) | Effective Rate |
|---|---|---|---|
| OA | 2.5% | +1% on first $20k | Up to 3.5% |
| SA | 4% | +1% on first $60k (total) | Up to 5% |
| MA | 4% | +1% on first $60k (total) | Up to 5% |
| RA (after 55) | 4% | +1% on first $60k, +2% on next $30k | Up to 6% |
Example: If you have S$40k in SA and S$20k in MA:
- First S$60k combined earns 5% = S$3,000/year
- Risk-free, government-guaranteed
- Much better than most savings accounts!
Using CPF for Housing
One of CPF's biggest benefits is using it for your home:
What You Can Pay With OA
- ✅ Down payment (up to 100% if you have enough)
- ✅ Monthly mortgage payments
- ✅ Stamp duty and legal fees
- ✅ Home improvement loans
Example: Buying a S$600,000 HDB Flat
- Down payment (25%): S$150,000 from CPF OA
- Monthly mortgage (~S$2,000): Paid from CPF OA
- Result: Buy a home without using cash!
⚠️ Important: Accrued Interest
When you sell your property, you must return the CPF used PLUS 2.5% compound interest to your OA. This protects your retirement funds.
CPF at Age 55: The Retirement Account
At 55, your OA and SA are combined into a Retirement Account (RA):
Basic Retirement Sum (BRS) 2025
- Full Retirement Sum (FRS): S$213,000
- Basic Retirement Sum (BRS): S$106,500 (if you pledge your property)
- Enhanced Retirement Sum (ERS): S$319,500 (if you want higher payouts)
What Happens at 55?
- Up to FRS amount locked in RA
- Any excess can be withdrawn in cash 🎉
- From 65, you receive monthly CPF LIFE payouts
Example: Age 55 with S$300,000 in CPF
- S$213,000 → Retirement Account (locked until 65)
- S$87,000 → Can withdraw!
- From 65: Receive ~S$1,800-2,200/month for life
CPF for Expats: Do I Pay?
Work Pass Holders (EP, S Pass)
❌ No CPF contributions required
- You keep your full salary (minus income tax only)
- Employer doesn't contribute either
- Better short-term cash flow
- But no forced retirement savings
Permanent Residents (PRs)
✅ Must pay CPF (with graduated rates in first 2 years)
| PR Year | Employee Rate | Employer Rate |
|---|---|---|
| 1st year | 5% | 4% |
| 2nd year | 15% | 9% |
| 3rd year+ | 20% | 17% |
Citizens
✅ Full CPF rates apply (20% employee + 17% employer)
Can You Withdraw CPF Early?
Before 55: Very Limited
- ❌ Generally cannot withdraw
- ✅ Can use OA for housing, investments, education
- ✅ Can use MA for medical expenses
- ✅ If leaving Singapore permanently (PRs only, with conditions)
At 55: Partial Withdrawal
- ✅ Withdraw amounts above the Full Retirement Sum
- ❌ Cannot touch the retirement sum amount
At 65+: Monthly Payouts
- ✅ Receive CPF LIFE monthly payouts for life
- ❌ Cannot withdraw as lump sum
CPF vs EPF vs 401(k)
| Feature | Singapore CPF | Malaysia EPF | US 401(k) |
|---|---|---|---|
| Contribution | 37% (mandatory) | 24% (11% + 13%) | ~10% (voluntary) |
| Interest | 2.5-6% guaranteed | ~5.5% (varies) | Market-based |
| Housing Use | ✅ Yes | ✅ Yes | ❌ No |
| Healthcare | ✅ Included | Limited | Separate |
FAQs
Is CPF a tax?
No, CPF is mandatory savings, not a tax. The money stays in your account and earns interest. You can use it for housing, healthcare, and retirement.
What happens to my CPF if I die?
Your CPF goes to your nominated beneficiaries or estate. You can make a CPF nomination to specify who gets what percentage.
Can I withdraw my CPF if I leave Singapore?
PRs can withdraw if they give up PR status and won't work/live in Singapore again. Citizens generally cannot withdraw except at retirement age.
Is CPF better than private investment?
CPF offers guaranteed returns (2.5-6%), which is excellent for low-risk savings. However, long-term stock market returns may be higher (with more risk). Many Singaporeans do both: keep CPF for safety and invest extra funds.