Do you know that at 4% per annum interest rate, your CPF Special Account (SA) current balance will double every 18 years thereabouts?

Do you also know that there’s a CPF Contribution Cap? That’s right. Only the “first” $6,000 of your monthly salary is subject to CPF contributions. Even if you earn a basic salary of $200,000 per month, your CPF contributions are calculated based on just $6,000. Try using the official CPF Calculator to see for yourself.

What about bonuses? Good question. Bonuses are considered “additional wages” and are subject to CPF contributions. However, there is also a cap called the Additional Wage Ceiling. The details are available here, but generally the combined Ordinary Wage and Additional Wage that are subject to CPF cannot exceed $102k per year. If you make $6k basic monthly and receive a $100k bonus at year end, only $30k of the bonus will be subject to CPF contributions (because 102 – 6×12 = 30).