How to Calculate Employer CPF & Hiring Cost in Singapore: A Step-by-Step Guide
Estimates the full monthly cost of employing a local worker: salary, employer CPF and the Skills Development Levy.
In Singapore, payslip maths decides how much you can save, invest and spend, and CPF takes a sizeable share before the money reaches your bank account. Knowing the numbers in advance makes salary negotiations, job switches and budgeting far less of a guess.
What you need
- Monthly salary (S$)
- Age (years)
Step by step
- Enter the monthly salary (S$).
- Enter the age (years).
- The results update as you type, or press Calculate.
- Read the employer cpf first, then the supporting figures below it.
The formula
Cost = salary + employer CPF + SDL. SDL is 0.25% of monthly remuneration with a S$2 minimum and a S$11.25 maximum.
Worked example
For example, with these inputs:
- Monthly salary (S$): 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$70,335.00
A second example
Now change the inputs to:
- Monthly salary (S$): 6,250
- Age (years): 30
the calculator returns:
- Employer CPF: S$1,063.00
- Skills Development Levy: S$11.25
- Total monthly cost to employer: S$7,324.25
- Annual cost (12 months): S$87,891.00
Practical tips
- Employer CPF is not part of your take-home pay, but it is part of your total compensation, so count it when comparing offers.
- Keep a copy of your payslips: MOM requires employers to issue itemised payslips, which makes checking deductions easy.
- If you change jobs mid-year, the Additional Wage ceiling is calculated across all employers for the calendar year.
- Use your basic salary plus fixed allowances as the ordinary wage; bonuses are additional wages with their own ceiling.
Background
The Employment Act sets out how hourly and daily rates are calculated for overtime, public holiday work and salary deductions. These formulas use the monthly basic rate of pay rather than gross salary, which is why the numbers can look lower than a simple division of your salary by hours worked.
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.
Contribution rates fall as workers get older, to keep older workers employable while their retirement savings continue to grow. The Government has been raising rates for workers above 55 in stages since 2022, with the latest change in January 2026 and another planned for 2027, so figures for senior workers change more often than for younger employees.
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.
Want to skip the arithmetic? The free Employer CPF & Hiring Cost Calculator does all of this instantly and updates as you type.
Run your own numbers: Employer CPF & Hiring Cost Calculator