Employer CPF & Hiring Cost in Singapore: Your Questions Answered
These are the questions people ask most often about employer cpf & hiring cost. Each answer is short; follow the links for the full detail.
What does a employer cpf & hiring cost calculation tell me?
Estimates the full monthly cost of employing a local worker: salary, employer CPF and the Skills Development Levy.
What is the formula?
Cost = salary + employer CPF + SDL. SDL is 0.25% of monthly remuneration with a S$2 minimum and a S$11.25 maximum.
What do I need to enter?
Monthly salary (S$), Age (years).
Is SDL payable for foreign employees?
Yes. SDL applies to all employees working in Singapore, including foreigners, while CPF applies only to citizens and PRs.
Are these figures exact?
They follow the published CPF and MOM formulas, but your employer's payroll may round slightly differently or include allowances in a different way. Your payslip is the final reference.
Can you show an example?
For example, with these inputs:
- Monthly salary (S$): 5,000
- Age (years): 30
the calculator returns:
- Employer CPF: S$850.00
- Skills Development Levy: S$11.25
- Total monthly cost to employer: S$5,861.25
- Annual cost (12 months): S$70,335.00
Any tips?
- If you change jobs mid-year, the Additional Wage ceiling is calculated across all employers for the calendar year.
- First- and second-year PRs contribute at graduated rates unless they opt in to full rates, so their figures will be lower.
- Use your basic salary plus fixed allowances as the ordinary wage; bonuses are additional wages with their own ceiling.
Background
Payslips must be itemised, showing basic pay, allowances, overtime, deductions and CPF. Comparing a payslip against an independent calculation is the easiest way to catch mistakes, especially in the first month of a new job, after a pay rise, or when you cross an age band.
Total compensation in Singapore is more than the number on your offer letter. Employer CPF, variable bonuses, the Annual Wage Supplement (often called the 13th month) and benefits all add value, and comparing offers on take-home pay alone can hide meaningful differences.
The Central Provident Fund is Singapore's mandatory savings scheme for citizens and permanent residents. Contributions are shared between employee and employer and flow into the Ordinary Account for housing, education and investment, the Special Account for retirement, and MediSave for healthcare. Because the money is locked up for specific purposes, many people underestimate how much of their total pay it represents.
Related calculations
- CPF OA Interest Calculator: Projects your CPF Ordinary Account balance with the 2.5% floor rate and regular contributions.
- CPF Special Account Interest Calculator: Projects Special Account growth at the 4% floor rate.
- CPF Contribution Calculator: Works out the monthly CPF contribution for Singapore Citizens and third-year-onwards PRs, split into employee and employer shares, using the 2026 rates and the S$8,000 Ordinary Wage ceiling.
- Take-Home Pay Calculator: Shows what lands in your bank account each month after the employee CPF deduction, for Singapore Citizens and full-rate PRs.
Try it yourself with the Employer CPF & Hiring Cost Calculator.
Run your own numbers: Employer CPF & Hiring Cost Calculator