Singapore payroll and CPF for employers — Costs and fees breakdown

Singapore payroll and CPF for employers means running monthly wages while paying the correct Central Provident Fund contributions for local staff, plus the Skills Development Levy and any Foreign Worker Levy. Getting the rates and deadlines right is the core compliance task, and outsourcing typically costs S$15 to S$40 per employee each month in 2026.

What Singapore payroll and CPF for employers involves

Employers must compute gross pay, deduct the employee CPF share, add the employer CPF share, and remit the total to the CPF Board by the 14th of the following month. CPF applies to Singapore citizens and permanent residents, not to Employment Pass or S Pass holders. The Skills Development Levy is payable for all employees at a low percentage of wages subject to a cap.

Who must contribute and at what rates

For employees aged 55 and below earning above S$750 a month, the 2026 combined CPF rate is 37 percent (employer 17 percent, employee 20 percent) on ordinary wages up to the monthly ceiling, with a separate annual limit for additional wages. Rates step down for older age bands, and the senior-worker rates continued to rise on 1 January 2026. The Ordinary Wage ceiling has been raised in stages and is S$8,000 per month from 1 January 2026.

Costs and fees breakdown

Outsourced payroll bureaus in Singapore charge roughly S$15 to S$40 per payslip per month, often with a monthly minimum of S$150 to S$300 for small teams. One-off set-up is commonly S$200 to S$500. Software-only options run S$5 to S$15 per employee. Beyond fees, budget for the employer CPF cost itself, which is up to 17 percent of qualifying wages, plus the 0.25 percent Skills Development Levy capped at S$11.25 per employee each month.

Step-by-step monthly process

Collect variable inputs (overtime, bonuses, unpaid leave); compute gross and net pay; calculate employer and employee CPF using the correct age and residency rates; generate payslips as required under the Employment Act; pay staff; remit CPF and SDL by the 14th; and file the annual IR8A income information by 1 March. The Employment Act 1968 requires itemised payslips and sets out permissible deductions, and the CPF Act 1953 governs the contribution obligation.

Common mistakes and gotchas

Employers frequently misclassify PR staff in their first years (graduated rates may apply), forget the additional-wage ceiling on bonuses, or miss the 14th deadline and incur interest and penalties. Directors who are also employees need care on whether directors’ fees attract CPF. For pass-holder staff, review whether an Employment Pass holder can also be a director, and the payroll mechanics are set out in our sister guide, Singapore payroll and CPF step-by-step. Withholding on certain payments to non-residents is covered in withholding tax and treaty benefits.

FAQs

Do EP holders pay CPF? No. CPF applies only to citizens and permanent residents.

When is CPF due? By the 14th of the month following the wage month.

What is the 2026 CPF ceiling? The Ordinary Wage ceiling is S$8,000 per month from 1 January 2026.

What does outsourced payroll cost? Roughly S$15 to S$40 per employee monthly, with small-team minimums.

References: IRAS and the Ministry of Manpower.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.