# CPF graduated rates for new Permanent Residents

URL: https://skillsforce.com.sg/insights/cpf-graduated-rates-new-singapore-prs
Title: CPF graduated rates for new Singapore Permanent Residents | Skillsforce
Description: What CPF costs in a new PR's first two years: 9% in year one, 24% in year two, full rates from year three, when the clock starts, and where the rollover goes wrong.
Updated 21 August 2026. First published 21 August 2026. Author: Skillsforce (People-operations team)
Category: payroll-cpf

An employee who becomes a Singapore Permanent Resident does not step straight onto full CPF. The contribution phases in over two years, on a clock that belongs to the employee rather than to the company, and lands on the first of a month rather than on the anniversary itself. Here are the actual percentages, the two ways to pay more than the default, and the rollover error that shows up in almost every manual payroll.

## What CPF rate applies to a new Singapore Permanent Resident?

Graduated rates apply for the first two years. For an employee aged 55 and below, year one is 9% in total (4% employer, 5% employee), year two is 24% (9% employer, 15% employee), and full rates of 37% (17% employer, 20% employee) apply from year three. The clock runs from the employee's own PR start date.

## Key points

- For an employee aged 55 and below earning more than S$750 a month, the default graduated rates are 9% of wages in the first year of PR status (4% employer, 5% employee) and 24% in the second year (9% employer, 15% employee).
- Full rates apply from the third year: 37% in total, of which the employer pays 17% and the employee pays 20%. The 37% figure is the combined contribution, never the employee's own share.
- The clock starts on the date the employee obtained PR status, shown on the entry permit (Form 5/5A) issued by ICA. It has nothing to do with the hire date, the payroll cycle or any company milestone.
- The rate change lands on the first day of the month following the anniversary month, not on the anniversary date itself. That off-by-one is the most common error at rollover.
- There are three rate combinations, not two: the automatic graduated default, full employer with graduated employee, and full employer with full employee. The second and third both need a joint application by employer and employee, and CPF Board's approval.
- CPF Board states there have been no changes to the graduated employer and employee rates since 1 January 2016, even though the full-rate table itself has moved for 2026.

An employee tells you they have received Permanent Residence. It is good news for them and, for whoever runs the payroll, it is a new line of cost and a date to diarise. CPF now applies to that person where it did not before, and the [current contribution rates](/compliance/cpf-rates) do not apply in full straight away. The contribution phases in over two years on what CPF Board calls graduated rates, and the phase-in follows the employee's own conversion date rather than anything on the company's calendar. Most of what goes wrong here is not the percentages. It is the date.

## The three-step schedule

Take the main band first, an employee aged 55 and below earning more than S$750 a month, on the rates effective 1 January 2026.

In the first year of Permanent Resident status, the default total contribution is 9% of Ordinary Wages: 4% from the employer and 5% from the employee. In the second year, it is 24%: 9% from the employer and 15% from the employee. From the third year, full rates apply, which for that band is 37% in total, made up of 17% from the employer and 20% from the employee.

Say the last figure carefully, because it is the one that circulates in a mangled form. **The employee contributes 20%.** The 37% is the combined employer-plus-employee total. An employer quoting 37% as the employee's own deduction is overstating a payslip by nearly half, and an employee who has read it somewhere and arrives at your desk worried is usually reading exactly that mistake.

Two structural notes. The step from year one to year two, 9% to 24%, is the biggest single jump in the schedule, larger than the step from year two to full rates. And the rates step down by age in both schedules, though the graduated tables use fewer age bands than the full-rate table: an employee above 55 to 60 sits on the same first-year combination as one aged 55 and below, while above 60 the first-year combination drops to 3.5% employer and 5% employee. The band-by-band schedule across every age and both wage tiers is published by CPF Board and set out on our [CPF contribution rates page](/compliance/cpf-rates); the point of this article is the mechanism, not a transcription of the tables. If you want a figure for one specific employee, the [CPF calculator](/free-tools/cpf-calculator) will do the arithmetic.

## Why the graduated rates exist at all

The phase-in is not an administrative courtesy. A newly converted Permanent Resident who went straight onto a 20% employee contribution would see take-home pay fall sharply in a single month, on a change they chose but did not price. The graduated schedule spreads that drop across two years. It is worth explaining once to the employee, because the alternative is a question about a shrinking payslip twelve months from now, and because it makes the year-two step, which is the sharpest, something they were told about rather than something that happened to them.

Two things about the graduated figures are worth knowing before anyone assumes they have moved. CPF Board states on both graduated tables that there have been no changes to the graduated employer and employee rates since 1 January 2016. The full-rate table has moved for 2026, and moves again for older workers in 2027; the graduated percentages themselves have not.

## When the clock actually starts

This is the fact that decides everything else, and it is not the hire date.

The first-year rate applies from the day the employee obtained Permanent Resident status, being the date shown on the entry permit (Form 5/5A) issued by the Immigration and Checkpoints Authority. Not the day they told you. Not the first payroll run afterwards. Not the start of your financial year.

The year boundary then works on a rule that catches people out. The first year ends on the last day of the month containing the first anniversary of conversion, and the second and third year rates apply from the month following that anniversary. CPF Board's own worked example: an employee who obtained PR status on 15 January 2020 sits in year one from 15 January 2020 to 31 January 2021, in year two from 1 February 2021 to 31 January 2022, and on full rates from 1 February 2022.

So the rate always changes on the first of a month. It never changes mid-month, and it never changes on the anniversary date itself. The anniversary only tells you which month closes out the old year.

## The two ways to contribute more than the default

The graduated rates are the default and need no application. An employer and employee who want to contribute more have two options, and both are joint applications to CPF Board rather than something the employer switches on alone.

The first is that both sides move to full rates. The second is the one employers ask about more often: the employer contributes at the full rate while the employee stays on the graduated employee rate. For the main band that means, in year one, a total of 22% (employer 17%, employee 5%), and in year two, a total of 32% (employer 17%, employee 15%). The employee's own deduction is unchanged from the default in both years; only the employer's share rises.

The application is made jointly by employer and employee, online, through the form matching the employer's entity type, and CPF Board's own rate tables state that the higher rates apply after CPF Board approves the joint application. That approval is a real gate, not a formality to assume. CPF Board's page does not say whether an approval can be backdated to the PR start date, so do not plan a payroll around the assumption that it can; ask when you apply.

## Where the rollover goes wrong

Almost every error in this area is a timing error, and there are four shapes it takes.

- **The wrong start date, keyed once.** A PR start date entered from memory or from the wrong document is inherited silently by every month that follows, and nothing downstream will question it.
- **The off-by-one at the anniversary.** The new rate starts on the first of the month *after* the anniversary month. Changing it on the anniversary date, or a month later than that, are both common and both wrong.
- **The year-two step missed entirely.** Going from 9% to 24% is a visible change in payroll cost; going from 4% to 9% on the employer side is not always visible enough for anyone to notice it did not happen.
- **Assuming an application was approved.** Contributing at full or full-employer rates before CPF Board has approved the joint application is a decision somebody made on an assumption, not on a confirmation.

Ordinary payroll software tracks the PR year automatically once the start date is entered correctly, which reduces the problem to the first item on that list. [A spreadsheet has no equivalent](/insights/payroll-spreadsheet-risk-cpf-ir8a-singapore), and depends entirely on somebody remembering a date that lives in one person's head. When we take over a payroll, the PR start dates and rate combinations are among the first records we reconcile against source documents rather than against the previous file.

## What the employer has to know and record

At concept level the requirement is short. For each Permanent Resident employee, the employer needs the PR start date, and it needs to know which rate combination applies for the month being submitted: the graduated default for year one or year two, full rates from year three, or one of the two higher combinations where CPF Board has approved a joint application. [The monthly submission itself](/insights/how-to-submit-cpf-contributions-singapore) computes the contribution once those particulars are entered correctly, which is exactly why entering them incorrectly is so quiet a failure.

The due date does not change for a Permanent Resident employee. CPF contributions are due on the last day of the calendar month; the 14th of the following month is CPF Board's enforcement threshold rather than the deadline, and late-payment interest of 1.5% a month, subject to a S$5 minimum, runs from the first day after the due date on the contribution owed rather than on wages. Where that sits alongside every other recurring obligation is mapped in the [payroll compliance calendar](/insights/singapore-employer-payroll-compliance-calendar).

## The wider point for a local-first payroll

Employers who hire Singaporeans and Permanent Residents run a payroll that is, month to month, more predictable than most: CPF and the Skills Development Levy, itemised payslips, an annual filing, and few moving parts beyond that. The conversion of an existing employee to Permanent Resident status is one of the genuine moving parts, and it arrives without a form to file or a reminder from anyone. It just becomes true on a date somebody has to have written down. The broader picture of what a local hire obliges an employer to get right is set out in our [guide to hiring Singaporeans and Permanent Residents](/insights/hiring-singaporeans-and-prs-employer-guide).

We run [payroll processing](/services/payroll) for Singapore employers, including the PR year tracking and the rollover months that come with it. If you would rather run it yourself, the thing to put in place is not a rate table. It is a single reliable record of every Permanent Resident employee's conversion date, checked against the entry permit rather than against what somebody remembers being told, and a diary entry for the first of the month after each anniversary. The percentages are published and stable. The dates are the part only you hold.

## Frequently asked questions

### What is the CPF contribution rate for a first-year Singapore Permanent Resident?

For an employee aged 55 and below earning more than S$750 a month, the default first-year rate is 9% of Ordinary Wages in total: 4% from the employer and 5% from the employee, under CPF Board's graduated employer and graduated employee table effective 1 January 2026. The graduated table uses fewer age bands than the full-rate table, and employees above 60 sit on a lower combination.

### What is the CPF rate in the second year of PR status?

For an employee aged 55 and below earning more than S$750 a month, the default second-year rate is 24% in total: 9% from the employer and 15% from the employee. The step from year one to year two, 9% to 24%, is the single largest jump in the whole graduated schedule, larger than the step from year two to full rates.

### Is the employee's CPF contribution 20% or 37%?

Twenty per cent. For an employee aged 55 and below on full rates, the employee contributes 20% of Ordinary Wages and the employer contributes 17%. The 37% figure that circulates widely is the combined employer-plus-employee total, and quoting it as the employee's own deduction overstates a payslip by nearly half.

### When exactly does a new PR move from graduated to full CPF rates?

The first year runs from the date PR status was obtained, per the ICA entry permit (Form 5/5A), and ends on the last day of the month of the first anniversary. Second and third year rates apply from the month following the anniversary of conversion. CPF Board's own example: PR status obtained 15 January 2020 means full rates apply from 1 February 2022.

### Can an employer pay full CPF rates for a new PR employee?

Yes, but not unilaterally. CPF Board offers two higher combinations: employer and employee both at full rates, or the employer at full rates while the employee stays on graduated rates. Both require a joint application by the employer and the employee, submitted online through the form matching the employer's entity type, and both take effect only after CPF Board approves it.

### Does the graduated rate change if the employee is over 55?

Yes, though less than the full-rate table does. Under the graduated tables, employees above 55 to 60 sit on the same 4% and 5% first-year combination as those aged 55 and below, while employees above 60 step down to 3.5% employer and 5% employee, 8.5% in total. The graduated schedule uses fewer age bands than the full-rate schedule.

### When is the CPF contribution for a PR employee due?

The last day of the calendar month, the same as for any other employee. The 14th of the following month is CPF Board's enforcement threshold rather than the due date. Late-payment interest of 1.5% a month, subject to a S$5 minimum, runs from the first day after the due date and is charged on the contribution owed, not on wages.

## Sources

- [CPF Board: CPF contribution rates from 1 January 2026](https://www.cpf.gov.sg/content/dam/web/employer/employer-obligations/documents/CPFcontributionratesfrom1Jan2026.pdf) (Accessed 21 August 2026)
- [CPF Board: how to determine the year of Singapore Permanent Resident status for CPF contributions](https://www.cpf.gov.sg/service/article/how-do-i-determine-the-year-of-my-singapore-permanent-resident-status-for-the-purpose-of-cpf-contributions) (Accessed 21 August 2026)
- [CPF Board: how to contribute more CPF for an employee who just obtained Singapore Permanent Resident status](https://www.cpf.gov.sg/service/article/how-can-i-contribute-more-cpf-for-my-employee-who-just-obtained-his-singapore-permanent-resident-spr-status) (Accessed 21 August 2026)
- [CPF Board: how much CPF contributions to pay](https://www.cpf.gov.sg/employer/employer-obligations/how-much-cpf-contributions-to-pay) (Accessed 21 August 2026)
- [CPF Board: making CPF contributions](https://www.cpf.gov.sg/employer/making-cpf-contributions) (Accessed 21 August 2026)

## Related

- [CPF contribution rates](https://skillsforce.com.sg/compliance/cpf-rates)
- [How to submit CPF contributions](https://skillsforce.com.sg/insights/how-to-submit-cpf-contributions-singapore)
- [CPF calculator](https://skillsforce.com.sg/free-tools/cpf-calculator)
- [Payroll Processing](https://skillsforce.com.sg/services/payroll)