CPF Contributions for PR Holders
By Sarah Lim, Senior Immigration Consultant
When you become a Singapore Permanent Resident, both you and your employer start making CPF (Central Provident Fund) contributions. CPF is Singapore's mandatory savings scheme covering retirement, healthcare, and housing. Here is what PRs need to know.
Graduated CPF Contribution Rates for New PRs
New PRs don't immediately pay full CPF rates. Instead, contributions are graduated over 2 years to ease the transition:
| Period | Employee | Employer | Total |
|---|---|---|---|
| Year 1 (SPR1) | 5% | 4% | 9% |
| Year 2 (SPR2) | 15% | 9% | 24% |
| Year 3+ (Full Rate) | 20% | 17% | 37% |
Rates shown are for employees aged 55 and below, earning above $750/month. Rates reduce progressively for older age groups. Employers and employees can jointly opt for full rates from Year 1.
CPF Account Structure
Your CPF contributions are split into three accounts:
Ordinary Account (OA)
Housing, insurance, investment, education. Can be used to buy an HDB flat or pay mortgage.
Allocation: ~23% of wages (at full rate)
Special Account (SA)
Retirement and investment. Cannot be withdrawn until retirement age (currently 55 for lump sum, 65 for monthly payouts).
Allocation: ~6% of wages
MediSave Account (MA)
Hospitalisation insurance and approved medical expenses. Can be used to pay for MediShield Life premiums.
Allocation: ~8% of wages
Key CPF Benefits for PRs
- Use OA savings to purchase HDB resale flat (after 3-year PR waiting period)
- MediSave covers hospitalisation costs and MediShield Life premiums
- Earn risk-free interest: 2.5% on OA, 4% on SA and MA (higher than most savings accounts)
- CPF savings are protected from creditors in the event of bankruptcy
- CPF provides a foundation for retirement income through CPF LIFE scheme
- Employer contributions are not taxable income (reduces your tax burden)
Impact on Take-Home Pay
The most immediate impact of CPF is a reduction in take-home pay. For a PR earning $6,000/month:
| Period | Employee Deduction | Take-Home |
|---|---|---|
| Before PR | $0 | $6,000 |
| Year 1 (SPR1) | $300 (5%) | $5,700 |
| Year 2 (SPR2) | $900 (15%) | $5,100 |
| Year 3+ (Full) | $1,200 (20%) | $4,800 |
While the take-home reduction is significant, remember that CPF is your money \u2014 it goes into your personal CPF accounts. Plus, your employer contributes an additional 4\u201317% on top of your salary, increasing your total compensation.
Can I Withdraw CPF If I Leave Singapore?
If you renounce your PR status and leave Singapore permanently, you can withdraw your full CPF balance. The process requires closing your CPF account, which typically takes 2\u20133 months. You must have cancelled your PR status and have no outstanding CPF-related obligations (such as an outstanding housing loan). Note: once withdrawn, the funds cannot be put back if you return to Singapore.
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