Can CPF be paid as cash? New PRs, EP holders and “CPF-inclusive” offers
Short answer: for Singapore citizens and PRs, no. Your employer has to pay its share of CPF into your CPF account. The CPF Board says an employer cannot deduct its own share from your wages, even if the contract says so.
What people usually mean by “CPF as cash” is one of three situations below.
1. You are on an Employment Pass or S Pass
Foreigners on a work pass don’t pay CPF, and neither does the employer. Your whole salary is paid to you (income tax still applies). There is nothing to convert.
2. You just became a PR
From the date you get PR, CPF starts. In the first two years the rates are lower (graduated), so take-home pay drops in steps rather than all at once.
Example: $6,000 a month, age 55 or younger.
| Status | You pay | Employer pays | Take-home | Into CPF a month |
|---|---|---|---|---|
| EP / S Pass | $0 | $0 | $6,000 | $0 |
| PR, 1st year | $300 | $240 | $5,700 | $540 |
| PR, 2nd year | $900 | $540 | $5,100 | $1,440 |
| PR from 3rd year, or citizen | $1,200 | $1,020 | $4,800 | $2,220 |
You and your employer can jointly apply to the CPF Board for full employer, graduated employee rates in the first two years. Your take-home stays the same, but the employer pays its full share: in the example, $1,020 instead of $240 or $540. Whether an employer agrees to this is up to them.
3. The offer says “including employer CPF”
Some offers quote a total package that already includes the employer’s CPF. Then the salary you are paid is lower than the headline number, and CPF comes on top of that salary.
For example, $7,020 a month “inclusive of employer CPF” is a $6,000 salary plus $1,020 employer CPF (17%). From that $6,000 you still pay your own 20%, so $4,800 reaches your bank.
This is a way of quoting pay, not a way around CPF: the employer still pays its share into your account.
What to check in an offer
- Whether the salary is before your own CPF (it usually is), and whether the employer’s CPF is on top or included.
- If you are on an EP and expect PR soon, what the salary will be after PR.
- If you are a new PR, which CPF rates the employer will use in your first two years.
Official sources: CPF Board – making CPF contributions correctly, CPF Board – recovering the employee’s share, CPF Board – contribution rate tables.