CPF Changes 2026: What HR Managers Need to Know About the New $8,000 Salary Ceiling

Reading Time: 6 minutes

Hey fam, if you’re doing payroll this month, heads up — CPF just changed again on 1 January 2026. This isn’t new though, as the $600 rise in the ceiling (from $7,400) marks the last round of increases based on a schedule that started since Sept 1, 2023. Now, the Ordinary Wage ceiling finally hit $8,000 (yes, this is the last increase for now, thank goodness), and if you’ve got senior workers, their contribution rates went up too.

Let me walk you through what all this means for your January payroll and beyond. No fancy jargon, just the stuff you actually need to know.

The Big Picture: What’s Changed from 1 January 2026

Okay, so here’s what happened on New Year’s Day while you were still recovering from countdown:

1. CPF Monthly Salary Ceiling Increases to $8,000

Remember when the ceiling was $6,000 back in 2016? Then it jumped to $6,500 on 1 January 2023, followed by $7,000 on 1 September 2023, and $7,400 on 1 January 2025? Well, it’s finally stopped at $8,000 as of 1 January 2026.

This is the final step in a series of increases that the government announced back in 2022 to keep up with rising wages. And here’s the good news — this $8,000 ceiling is expected to stay put for the foreseeable future. No more annual adjustments to stress about.

Here’s the thing: If you’ve got people earning between $7,400 and $8,000, that extra $600 now attracts CPF contributions. And for those earning $8,000 and above, you’ll calculate CPF on the full $8,000 instead of last year’s $7,400.

2. Higher Contribution Rates for Senior Workers

Your senior colleagues aged 55-65? Their CPF rates went up by 1.5 percentage points total (from 32.5 per cent to 34 percent). Employer side increased by 0.5%, employee side by 1%.

Meanwhile, the CPF contribution rates for workers over 60 years old to 65 years old was also raised by 1.5 percentage points (from 23.5 per cent to 25 per cent) of the total wage. For the employee’s contribution, the increase will be from 11.5 per cent to 12.5 per cent in 2026. Employer side’s increase is 0.5 per cent.

For the cohort that turns 55 in 2026, the full retirement sum – or FRS – was also increased by about 3.5 per cent. It was $213,000 in 2025, but will be $220,400 in 2026.

In a nutshell, this move is all about beefing up seniors’ retirement savings (my retired mother was quite FOMO about this, but oh well).

3. Annual Limits Remain Unchanged

Finally, some good news — nothing changed for the annual salary ceiling ($102,000) and the CPF Annual Limit ($37,740). So your year-end calculations? Same as before.

How This Affects Your Payroll Processing

For Employees Earning $7,400-$8,000

Let me show you how this works with a real example. Say you have Sarah who earns $7,800 a month and she’s 40 years old.

Last year:

• CPF only calculated on $7,400 (the rest was cash)
• She contributed 20%: $1,480
• Company contributed 17%: $1,258
• Total CPF: $2,738

This year:

• CPF calculated on the full $7,800 now
• She contributes 20%: $1,560
• Company contributes 17%: $1,326
• Total CPF: $2,886

So Sarah’s putting in an extra $80, and you’re chipping in $68 more. That’s $148 extra into her CPF every month.

For Employees Earning Above $8,000

If someone’s making $10,000, you still only calculate CPF on $8,000. The remaining $2,000? That’s just cash, no CPF deductions.

The wallet impact: Anyone earning above $7,400 will see their take-home shrink by up to $120 a month. Yeah, I know — not the best start to the new year. Better prep your team for the “why is my salary less” questions.

For Senior Workers (Ages 55-65)

Okay, this one’s a bit trickier. These folks got a rate increase, and the extra money goes straight to their Retirement Account until they hit the Full Retirement Sum. After that, it flows to the Ordinary Account instead.

Heads up for payroll: Make sure your system’s updated with the new age-tier rates. Check your January payslips properly — you don’t want to face an audit because of incorrect rates.

Understanding the Annual Ceiling (Still Important, Don’t Sleep On This!)

Even though the monthly ceiling went up, the annual salary ceiling of $102,000 didn’t budge. This matters big time when you’re doing bonus calculations.

Let me show you what I mean:

Your employee:

• Monthly salary: $8,000
• Annual bonus: $15,000

How to calculate:

• Total Ordinary Wages with CPF: $8,000 × 12 = $96,000
• Space left for bonus: $102,000 – $96,000 = $6,000
• Only $6,000 of that $15,000 bonus gets CPF

Here’s the kicker — this is actually less bonus coverage than last year, when the monthly ceiling was lower but you had more room for bonus contributions. Funny how that works out, right?

Action Items for HR Teams (Your To-Do List This Week)

Update Your Payroll System ASAP

Most payroll software should auto-update (like Talenox), but still check properly:

• Monthly OW ceiling now $8,000 (not $7,400 anymore!)
• Ages 55-65 got new contribution rates
• Year-end reports using the $102,000 annual ceiling

Don’t assume everything updated correctly. Click through and verify. Trust me on this. If not, trust Talenox lah (it’s been around for 11 years).

Talk to Your People

Your colleagues earning $7,400-$8,000 are going to see their take-home drop. Better you tell them first before they come knocking on your door asking why their January pay is short. You can either send a company-wide email, or do this during your team sharing sessions. Explain the changes, but focus on the benefits (more retirement money, compound interest working for them).

Check Your Budget (Finance Team Will Thank You)

More employees hitting the higher CPF bracket means more money out from the company. Make sure your finance team knows about this.

Quick calculation:

• Got 10 people earning $7,800?
• Extra employer CPF: $68 × 10 × 12 months = $8,160 a year
• Plus whatever extra for senior worker rate increases
• Not exactly small changes here!

Review Your Job Offers

When you’re hiring now, remember that total comp includes employer CPF. An $8,000 salary actually costs your company $9,360 ($8,000 + $1,360 employer CPF). Last year, with the lower ceiling, it was less. Keep this in mind when your boss asks why hiring costs went up.

Plan for Bonus Season

More monthly salary eating up the annual ceiling means less of the year-end bonus will have CPF. Your people might see more cash in their bonus, which sounds good… but some might prefer the CPF contribution. Be sure to manage expectations early.

What About Platform Workers and Special Cases?

Platform workers (like Grab or Foodpanda drivers/riders) born 1995 or later, or those who opted in? They follow the increased rates too.

Got part-timers or lower-income staff earning $500-$750? Their employee contribution rates are still phasing in slowly. For peace of mind, it’s worth checking the specific rates for this group if you’ve got them on your payroll.

The Silver Lining: It’s Not All Bad News

Okay, we all know nobody likes seeing their take-home pay shrink. But let’s look at the bright side for a moment.

Someone making $8,000 will get an extra $120 in employee CPF and $102 in employer CPF each month in 2026 versus last year. That’s $2,664 more going into retirement savings per year.

And here’s the thing — CPF interest rates are actually pretty solid. 2.5% for OA, 4% for SA and MA. It’s pretty tough to get sort of guaranteed returns like that these days. Over 20-30 years, this compounds to become quite substantial.

So yeah, short-term pain, long-term gain. That’s the pitch you can use when your colleagues complain. 

Support Available for Employers (Yes, There’s Help!)

The government knows this hurts the company wallet. So there’s a CPF Transition Offset to help out — basically they give you back half of the 2026 increase in employer CPF contributions for senior workers.

If you’re employing senior workers and the increased rates are affecting your bottom line, make sure you claim this offset. Don’t leave free money on the table.

As for Talenox, we’ve got the Startup Plan (or Startup Program) for promising startups that need just a little but more support financially. If you want to automate your payroll via Talenox instead of using Excel all the time (very manual, very time-consuming), but need to save on costs, this is where we’re here to help. We know times are tough, and we’re still committed to helping you guys (we’ve been there). 

To qualify, your company needs to meet both of these criteria: 

• Be less than 3 years old based on your official registration date, and
• Have fewer than 5 employees

We’ve been where you are, and we’re still committed to supporting early-stage companies – even if it means taking a hit on our margins. To access the Startup Plan, simply talk to us through any of your preferred channels.  

Common Questions from Payroll Teams (You’re Probably Wondering…)

Q: Do I need to change anything for people earning below $7,400? Nope, if they’re earning $7,400 or less, nothing changes for them in 2026. Unless they’re 55-65 years old, then the rate increase applies.

Q: What if we overpaid CPF by accident? You can get a refund. If the total CPF goes over the annual limit, you can apply to CPF Board for a refund. But better to get it right the first time than go through the refund hassle.

Q: How about foreigners on work passes? These changes only apply to Singapore Citizens and PRs. Your foreign staff aren’t affected.

Q: Can employees opt out if they don’t want the higher contributions? Unfortunately no. CPF is mandatory, the rates and ceilings are set by law. No opt-out option here.

Looking Ahead: What’s Coming Next?

Good news — this is the FINAL scheduled increase to the CPF OW ceiling. The government announced back in 2022 that $8,000 would be the target, and we’re here. So you can breathe easy on this front for the foreseeable future. But still need to watch out for:

• FRS adjustments every year (affects your senior colleagues)
• Whatever Budget 2026 brings (there are always surprises) – keep a lookout for our article (subscribe to our newsletter on our blog)
• Updates to schemes like Senior Employment Credit

At least we’re done with the ceiling increases for now. 

Got questions about all this? Drop a comment below or ping our support team. We’re all in this together, navigating the wonderful world of Singapore payroll regulations.

Now go check your payroll system before you forget!

Related Resources:

• Guide to CPF for Employers
• Talenox Payroll Guide – CPF, FWL, and SDL Made Easy