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.