Employer taxes and social security contributions in Singapore

Most Singapore headcount requests include a gross salary figure. However, that figure alone doesn’t tell the full story of the actual employer cost of employing someone in Singapore. You also need to consider all statutory charges, which in Singapore depend on the worker’s citizenship and residency status. Singapore has no general employer payroll tax applied across every employee’s pay. Instead, the charges include the Central Provident Fund (CPF), Skills Development Levy (SDL) and, where relevant, the Foreign Worker Levy (FWL).

For 2026, employers need to account for the relevant rates and ceilings, as well as 2027 changes and reporting requirements.

Each recurring charge covers a different population. CPF applies to Singapore citizens and permanent residents. The Skills Development Levy (SDL) applies to almost everyone rendering services in Singapore, including foreign pass holders. The Foreign Worker Levy (FWL) applies to S Pass and Work Permit holders, and not to Employment Pass holders.

Six facts about the employee determine every figure above: residency status and the date permanent residence was granted, date of birth, pass type, sector and quota use, race and religion as recorded on the National Registration Identity Card (NRIC), and whether the work is manual. Those factors, rather than the job description, determine the cost of hiring in Singapore and make it predictable.

The employer CPF rate for a private-sector employee aged 55 and below is 17%, applied to Ordinary Wages (regular monthly pay such as salary) up to the monthly ceiling. The rates in the table below took effect on 1 January 2026 and apply when all three of these are true:

• The employee is a Singapore citizen, or a permanent resident in the third year of permanent residence or later. Newer permanent residents pay lower rates, set out further down.
• The employee works in the private sector and is not in a pensionable role.
• The employee’s total monthly wages exceed SGD 750.

For example, an illustrative 40-year-old citizen earning SGD 6,000 a month meets all three conditions. The employer pays 17% of SGD 6,000, which is SGD 1,020, and the employee’s 20% share, SGD 1,200, is deducted from wages.

For total monthly wages below SGD 750, CPF is calculated differently: nothing is payable on total wages of SGD 50 or less, and between SGD 50 and SGD 500, there is no employee share, while the employer share remains payable. The CPF Board, which collects contributions, states that contributions are not allowed for Employment Pass, S Pass, Miscellaneous Work Pass, and Work Permit holders, so employees who are neither citizens nor permanent residents are not subject to CPF at all. CPF applies from the day a foreign employee obtains permanent-resident status.

SDL is a charge payroll teams can easily miss because it is small enough to look like a rounding item but broad enough to affect nearly everyone on payroll. It covers local and foreign employees rendering services in Singapore, including part-time and temporary staff, and applies to Employment Pass, S Pass and Work Permit holders even though none of them pays CPF.

To calculate it, take the greater of SGD 2 or 0.25% of monthly wages, counting wages only up to SGD 4,500, so everyone earning above that cap contributes SGD 11.25. Employers calculate it per employee, total it across the organisation, then round the total down to the nearest dollar. Rounding each employee’s amount separately gives a figure that does not match the amount due. A few exclusions apply: employees who render no services in Singapore in the given month, certain privately employed domestic staff, and specified exempt student trainees.

FWL is a monthly charge from the Ministry of Manpower (MOM) on each S Pass and Work Permit holder. It is a workforce-policy charge, not a social-security contribution, and it does not apply to Employment Pass holders. From 1 September 2025, the S Pass levy is harmonised at SGD 650 monthly across all sectors and tiers.

The levy is billed by calendar month. When the pass holder is employed for only part of a month, for example because the pass starts or ends mid-month, MOM charges a daily rate for the days covered instead of the monthly amount. For an S Pass, that daily rate is SGD 21.37. Work Permit rates change with the dependency ratio ceiling, which is the maximum foreign-worker share of an employer’s total workforce.

Each tier covers a band of the employer’s workforce. Work Permit holders fill the lowest tier first, and once it is full, further hires fall into the next tier at a higher rate. In services, foreign workers can make up at most 35% of the workforce. S Pass holders count towards that 35%, and their own 10% limit sits inside it rather than being added to it. Pass application and issuance fees are separate one-off charges, not a levy.

Self-help group (SHG) funds are community funds for Singapore’s Chinese, Eurasian, Muslim, and Indian communities, paid through small, fixed monthly deductions from covered employees’ wages. The employer deducts the amount from wages and remits it to the CPF Board with the CPF submission, but it is not an employer charge and does not belong in the cost model. An employee wanting to stop or vary the deduction has to approach the fund; the employer cannot waive it.

For example, a Chinese Singapore citizen earning SGD 6,000 a month falls in the CDAC band for wages above SGD 5,000 up to SGD 7,500, so SGD 2 is deducted from the employee’s pay each month and sent to the CPF Board with that month’s CPF. The employer cost stays the same. MBMF is determined by religion, while the others use the race recorded on the NRIC. This means a Muslim Indian employee may contribute to both SINDA and MBMF.

Work injury compensation insurance is compulsory for all employees doing manual work regardless of pay, and for non-manual employees earning SGD 2,600 or less a month. Work Permit and S Pass holders also need medical insurance with at least SGD 60,000 in annual coverage. For claims above SGD 15,000, the insurer pays 75% and the employer 25%, up to the annual claim limit. Neither premium has a prescribed percentage, and both must be quoted before the cost model is signed off.

Each month, the employer pays both its own CPF share and the employee’s share to the CPF Board in a single payment, and recovers the employee’s share from that month’s wages. Self-help group deductions go on the same submission. That is why the payroll mechanics in Singapore matter as much as the rates. Determining the employer figure takes eight steps.

1. Confirm the employee’s citizenship or permanent-resident status, and the grant date where applicable
2. Based on the employee’s age, select the matching CPF age band
3. Cap the wages subject to CPF at SGD 8,000 before applying any percentage
4. Apply the employer CPF rate for that band, using graduated rates for a newer permanent resident
5. Calculate SDL as the greater of SGD 2 or 0.25% of wages, disregarding wages above SGD 4,500
6. Add FWL only for an S Pass or Work Permit holder, from the current levy bill.
7. Add quoted insurance premiums where in scope
8. Exclude the employee CPF share and any SHG deduction as both come out of wages

Two employees on the same SGD 10,000 salary can have different employer costs because age and residency status affect that number. The example below assumes a 2026 calendar month, a citizen or a permanent resident in the third year or later, no Additional Wage, and no pass-based levy.

For an employee who is 40 years of age or more, CPF applies to the first SGD 8,000 of the salary, and the employer’s 17% of SGD 8,000 is SGD 1,360. SDL is the SGD 11.25 maximum because the salary is above SGD 4,500. The employer cost is SGD 10,000 in salary, plus SGD 1,360 in CPF, plus SGD 11.25 in SDL, for a total of SGD 11,371.25. The employee’s own 20% share, SGD 1,600, comes out of the SGD 10,000 and adds nothing to the employer cost.

An Employment Pass holder on the same SGD 10,000 salary pays no CPF and attracts no levy. SDL still applies because it covers almost everyone working in Singapore and remains at SGD 11.25. The monthly employer cost is therefore SGD 10,000 plus SGD 11.25, or SGD 10,011.25, before benefits, insurance and one-off pass fees.

Two CPF age bands will change on 1 January 2027, while the rest will remain the same. Employees aged 55 and below, and those aged 65 to 70 and above 70, see no change.

The employer increase is half a percentage point in each affected band. On the levy side, MOM has announced that from 2028 the first two tiers in services and manufacturing will merge, at SGD 400 and SGD 600 for services and SGD 300 and SGD 470 for manufacturing, higher-skilled and basic-skilled respectively. MOM’s sector pages state that further implementation-timeline details are still to be released.

For income earned in 2026, electronic submission is mandatory for employers with five or more covered individuals.

The Form IR21 duty covers work-pass holders and can extend to permanent residents. An employer may exclude a permanent resident who is not leaving Singapore permanently if they hold the prescribed letter of undertaking.

Four errors in a cost model lead to an employer cost that is too low:

1. Applying one CPF percentage to the whole salary: You can spot this when the employer CPF line exceeds SGD 1,360 a month for an employee aged 55 or below, which the SGD 8,000 ceiling makes impossible.
2. Treating the Additional Wage ceiling as a flat SGD 6,000: This would be true only for a full-year employee whose Ordinary Wages subject to CPF reach SGD 96,000 in 2026.
3. Grouping all non-citizens together: Permanent residents attract CPF, and foreign pass holders do not; newer permanent residents pay graduated rates, and levy exposure differs by pass type.
4. Assigning one levy rate to every Work Permit holder: Because tiers fill up as the foreign-worker share rises, the next hire can fall into a higher-rate tier than the previous one. Check the employer’s current quota balance, not only the pass type, before pricing the hire.

A well-executed Singapore employment cost simulation should show which charges apply to each employee and why. Age, residency status and pass type can change the employer cost even when the salary is the same, which is why Singapore employer taxes should be modelled charge by charge.

Whether the cost is calculated in-house or provided by a payroll or EOR provider, the breakdown should show CPF, SDL, FWL and applicable insurance premiums separately, with the relevant age band and residency status.