Short answer: From 1 January 2027, total CPF contribution rates rise for employees aged above 55 to 65 — up 1.5 percentage points (to 35.5%) for the 55-to-60 group and up 1 percentage point (to 26%) for the 60-to-65 group. The increase is split between employer and employee, and goes entirely into the employee’s Retirement Account (up to their Full Retirement Sum). Announced in Budget 2026, this doesn’t take effect for several months — but payroll budgets for FY2027 should account for it now.
What’s changing
- Above 55 to 60: total CPF rate rises 1.5 percentage points (0.5% employer + 1% employee) — new total: 35.5% (up from 34%)
- Above 60 to 65: total CPF rate rises 1 percentage point (0.5% employer + 0.5% employee) — new total: 26% (up from 25%)
- Senior workers earning $500–$750/month (on phased-in rates) see a proportional increase too
Where the extra contribution goes
Fully allocated to the employee’s Retirement Account, up to their Full Retirement Sum (FRS) — once FRS is reached, it flows to their Ordinary Account instead.
Why this matters for payroll planning now
The change is nearly a year out, but employer CPF costs for every staff member aged 55+ go up from January — worth building into FY2027 headcount budgets rather than a January surprise, especially for SMEs with several senior staff.
What employers should do before January 2027
- Identify staff aged 55–65 on payroll today (and any turning 55 before Jan 2027)
- Factor the 0.5% employer-side increase into FY2027 payroll budgets
- Confirm your payroll system will apply the new rates automatically from 1 Jan 2027
One thing you won’t need to do
If you’re running payroll on JustLogin, the new 2027 rates apply automatically from 1 January — no configuration, no manual updates, nothing to set up on your end. The only real work is the budgeting above; the calculation itself is already handled.
FAQ
- When do the new rates take effect? 1 January 2027.
- Does this affect all employees? No — only those aged above 55 to 65 (plus a smaller phased-in group earning $500–$750/month).
- Where does the extra CPF go? Into the employee’s Retirement Account, up to their Full Retirement Sum.
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