In the recent FY2023 Budget, Deputy Prime Minister and Minister for Finance Lawrence Wong announced that the CPF monthly salary ceiling to increase from the current S$6,000 to S$8,000 by the year 2026.
If you are worry about the sudden increase, you will be glad to know that the increase will take place in four steps to allow you and your employer to adjust to the changes.
The first increase will take place from 1st September 2023, which is this year. There will be no change in the CPF annual salary ceiling of S$102,000.
CPF Salary Ceiling
Here are more details of the increase in CPF Salary Ceiling.
|1st September 2023||S$6,300|
|1st January 2024||S$6,800|
|1st January 2025||S$7,400|
|1st January 2026||S$8,000|
For those that are currently earning less than S$6,000 monthly, this change most likely will not be significant to you.
For those that are earning more than S$6,000, it means that you take home S$300 dollars less after 1st September 2023 because of the increase in CPF salary ceiling to S$6,300. Well, if you look on the bright side, you are benefiting from this change because employers also have to contribute more to your CPF.
With the increase in contribution, this will also help you reach your Full Retirement Sum (FRS) faster.
Here are some articles that I have found that can help you better understand how the increase affects you.
CPF Board, Budget Highlights 2023, 22 Feb 2023
DBS Bank, Budget 2023 – How the CPF changes impact you, 22 Feb 2023
The increase of ceiling cap of $300 doesn’t mean you take home $300 less. It’s $300 x 20%.