Budget 2023: Phased raising of CPF monthly salary cap will help employers to adjust

• CPF monthly salary ceiling to rise in four steps: to S$6,300 from September 2023, S$6,800 from January 2024, S$7,400 from January 2025 and S$8,000 from January 2026
• Phased-in increases give time for businesses to adjust

THE phased-in approach in raising the Central Provident Fund (CPF) monthly salary ceiling will allow businesses to adjust to any added costs, said Ang Yuit, vice-president of the Association of Small & Medium Enterprises.

The government is raising the CPF monthly salary ceiling – the maximum amount of ordinary wages on which employee and employer contributions are calculated – from S$6,000 to S$8,000 in 2026, in four steps. This is to keep pace with rising salaries and help middle-income Singaporeans save more for retirement, said Finance Minister Lawrence Wong in his Budget speech on Tuesday (Feb 14).

From Sep 1, 2023, the monthly salary ceiling will rise to S$6,300. From Jan 1, 2024, it will be further lifted to S$6,800. By Jan 1, 2025, the ceiling will go up to S$7,400 and by Jan 1, 2026, it will reach S$8,000.