Do Singapore EP and Other Work Passes Need to Contribute to CPF?

In Singapore, the Central Provident Fund (CPF) is an important social security system designed to provide retirement, healthcare, and housing security for Singapore citizens and permanent residents. However, for foreign employees holding work passes such as Employment Pass (EP), S Pass (SP), and Work Permit (WP), whether they need to contribute to CPF is a concern for many. This article will explain in detail the regulations regarding these work passes and CPF contributions.

As a preface, CPF is a comprehensive social security system aimed at supporting Singapore citizens and permanent residents. Since January 1, 2003, foreign employees are not required to contribute to CPF, as they may not retire in Singapore. Therefore, CPF contributions only apply to Singapore citizens and permanent residents.

1. Who is Eligible for CPF Contributions

The CPF system primarily applies to Singapore citizens and permanent residents (PR). Singapore employers are obligated to contribute CPF for their Singapore citizen and PR employees, deducting a certain percentage from the employee's salary, with the employer matching a certain percentage of contributions. Funds in CPF accounts can be used for retirement, healthcare, and housing purposes.

2. Do EP, SP, and WP Holders Need to Contribute to CPF?

According to Singapore's Central Provident Fund Board regulations, foreign employees holding EP (Employment Pass), SP (S Pass), or WP (Work Permit) do not need to contribute to CPF. Here are the detailed explanations for each type of work pass:

1. Employment Pass (EP) Holders: EP is for highly skilled foreign employees who typically have professional skills or management experience in specific fields. EP holders do not need to contribute to CPF, and employers are not required to make any CPF contributions for them.
2. S Pass (SP) Holders: SP is for mid-skilled foreign employees, such as technical workers or assistant staff. Although SP holders have lower salary requirements than EP holders, they similarly do not need to contribute to CPF.
3. Work Permit (WP) Holders: WP is mainly for low-skilled or general foreign workers, such as construction workers and domestic helpers. These employees also do not need to contribute to CPF, and employers are not required to make any CPF contributions for them.

3. Do Foreign Employees Have Other Alternative Social Security?

Although EP, SP, and WP holders do not need to contribute to CPF, the Singapore government has other relevant regulations for employers and foreign employees. For example:

• Medical Insurance: Employers must purchase medical insurance for S Pass and Work Permit WP holders to ensure foreign employees can receive basic medical coverage when sick or injured. Medical insurance is not mandatory for EP pass holders and is voluntary for companies.
• Supplementary Retirement Scheme: For foreigners who wish to voluntarily save for retirement, they can consider the Supplementary Retirement Scheme (SRS), which is an alternative option. SRS is a voluntary scheme that allows individuals to save for retirement through voluntary contributions and enjoy tax benefits.

4. CPF Obligations After Foreign Employees Obtain Permanent Residency

If foreign employees successfully apply for Singapore Permanent Residence (PR), their CPF contribution obligations will come into effect. Permanent residents need to have a certain percentage of CPF deducted from their salary according to the Central Provident Fund Board's requirements, and employers also need to match corresponding contribution amounts. This transition period typically spans three years, with CPF contribution rates gradually increasing to help new permanent residents adapt to the CPF system.

5. Summary

In summary, foreign employees holding work passes such as Singapore EP, SP, or WP do not need to contribute to CPF. However, if foreign employees plan to work in Singapore long-term and apply to become permanent residents, they will begin contributing to CPF after successfully obtaining PR status. For foreign employees, understanding these regulations can help them better plan their work and life in Singapore. For employers, familiarity with these policies helps ensure proper compliance with legal responsibilities and provision of appropriate welfare benefits for foreign employees.