Why this matters

From 1 January 2026, CPF contribution rates for employees aged above 55 to 65 will increase to strengthen retirement adequacy. Employers must adjust payroll files, budgets, and HR documents ahead of the change to avoid back-pay corrections and penalties.

Who is affected

  • Employees above 55 to 65 (inclusive bands within this range).

  • All employers paying CPF for Singapore Citizens and Permanent Residents.

  • Companies with part-time, casual, or variable-pay staff are also in scope.

What’s changing

  • Total CPF contributions for the 55–65 age group go up from 1 Jan 2026.

  • The uplift is split between employer and employee shares (employer +0.5% pts; employee +1.0% pt, per CPF Board’s update). Exact banded rates are in CPF’s official schedule.

  • You must use the new rates for wages earned in Jan 2026 and thereafter, including additional wages (bonuses) attributable to 2026.

Payroll actions to take now

  1. Update payroll software and salary templates

    • Load the 2026 CPF tables by age band and test January pay runs end to end.

    • Check the handling of Additional Wages (AW) ceilings and proration for birthdays mid-year.

  2. Recalculate employment cost forecasts

    • Model the employer-share increase across headcount aged 55–65.

    • Factor the impact on overtime, allowances, and variable pay pools.

  3. Refresh HR documents

    • Issue variation letters if net pay changes due to higher employee CPF.

    • Update payroll SOPs, employee handbooks, and compensation calculators.

  4. Coordinate with finance and vendors

    • Align GL mapping, cost centres, and accruals.

    • If you outsource payroll, confirm your provider’s 2026 readiness and test files.

  5. Communicate with employees

    • Explain the take-home pay impact and the long-term benefit (higher retirement savings).

    • Provide worked examples for common salary bands.

Edge cases to watch

  • January bonuses: If paid in Jan 2026 but relate to 2025, confirm which year’s AW ceiling applies and ensure correct age-band rate.

  • Mid-year birthday: Employees moving into a new age band mid-year need rate changes from the month after the birthday—configure rules correctly.

  • New hires & rehires: Verify citizenship/PR status changes (and PR year-of-scheme) so the right contribution table applies.

Why act early

Leaving changes to late December risks:

  • Mis-calculated January payroll and CPF submissions,

  • Costing errors in 2026 budgets, and

  • Time-consuming amendments with CPF Board.

Early updates also let you tidy itemised payslips and employee comms before the holiday period.

How Excellence Singapore helps

  • CPF impact review across your workforce (age bands, cost uplift, budgeting).

  • Payroll system updates & testing (rate tables, AW handling, mid-year birthdays).

  • Monthly payroll processing with CPF e-submission and amendments support.

  • Change communications: employee memos and payslip annotations.

  • Integrated services: payroll + accounting + compliance so finance stays in sync.

Conclusion: Lock in compliance before the 2026 switch

The CPF rate increase for the 55–65 group is confirmed and time-bound. Updating systems, budgets and documents now means a smooth January run—and fewer headaches later.

Contact us to run a fast CPF readiness check and update your payroll for 2026.

Why this matters now

On 11 August 2025, MOM announced the next round of Retail Progressive Wage Model (PWM) increases. From 1 September 2025, retail workers must earn at least the new PWM wage levels, with a multi-year schedule of sustained increases. Employers must adjust payroll, CPF, and budgeting to stay compliant.

Who is affected

  • Retail sector employers covered under PWM (full-time and part-time; part-time wages pro-rated).

  • Outsourced roles performing retail functions in PWM-covered establishments.

  • Businesses benefiting from Progressive Wage Credit Scheme (PWCS) co-funding through 2026 should plan how wage moves interact with PWCS claims.

What’s changing from 1 September 2025

  • Entry-level retail wage floor increases (MOM’s schedule sets new minima for each retail job level).

  • Part-time workers: wage floors are pro-rated based on a 44-hour week equivalent.

  • A three-year schedule continues to push wages upward, so plan beyond just FY2025/26

Action checklist for employers

  1. Map roles to PWM levels

    • Confirm each employee’s PWM job level matches actual duties and skills progression.

    • Keep written role descriptions to support audits. 

  2. Update payroll & CPF calculations

    • Adjust basic pay to the new monthly gross wage requirements before September payroll cut-off.

    • Recalculate CPF contributions after the wage update. (Refer to current CPF tables separately.)

  3. Review part-time arrangements

    • Pro-rate wages for part-timers correctly (44-hour basis).

    • Ensure itemised payslips reflect PWM level, hours, and components.

  4. Budget for multi-year increases

    • Build a 12–24 month forecast incorporating scheduled PWM steps and potential PWCS co-funding. 

  5. Update employment documents & SOPs

    • Issue variation letters/contracts reflecting new pay.

    • Refresh HR policies on progression, training, and performance criteria linked to PWM.

  6. Train managers & finance

    • Brief store managers on PWM job ladders and progression criteria.

    • Align finance on month-end checks so payroll files match PWM rules.

Common pitfalls to avoid

  • Using allowances to meet wage floors: PWM looks at gross wage definitions and pro-rating rules; ensure structure meets the letter of MOM’s guidance. 

  • Mismatched job titles vs duties: titles alone don’t determine PWM level—actual work performed does.

  • Late payroll adjustments: backpay errors can cascade into CPF corrections and vendor chargebacks.

How Excellence Singapore can help

  • PWM role mapping & compliance review for your retail workforce.

  • Payroll updates (salary files, CPF calculations, itemised payslips) and ongoing monthly processing.

  • Budget modelling that blends PWM increases with PWCS co-funding opportunities. 

  • Documentation pack: updated contracts/letters, SOPs, and audit-ready records.

Conclusion: Update now to stay compliant and control costs

The September 2025 PWM changes are firm—and more increases are already scheduled. Updating payroll, contracts and budgets before month-end keeps you compliant and minimises rework.

Contact us to run a fast PWM compliance check and get your payroll ready for the new wage floors.