Singapore - What is CPF?

The Central Provident Fund Board (CPFB), commonly known as the CPF Board or simply CPF, is a compulsory comprehensive savings and pension plan for working Singaporeans and permanent residents primarily to fund their retirement, healthcare, and housing needs in Singapore.
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Employers are required to pay CPF contributions on wages payable to employees. Employees are also mandated to contribute from their wages earned. Under the CPF Act, wages are defined as remuneration in currency, including any bonus that is due or granted to a person in respect of their employment.
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Wages are classified into ‘Ordinary’ or ‘Additional’ Wages.
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​Ordinary Wages (OW):

Additional Wages (AW):

Commissions may be classified as OW or AW. Examples of OW would include commissions for monthly sales or for exceeding sales targets during the month. There are other forms of commissions, such as quarterly, yearly, or others not payable during the month – these would be considered AW.
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​Total Wages (TW):

For wages to be classified as OW for the month, they must satisfy the conditions above. Wages that are not classified as OW will be AW for the month. For example, if an employee does overtime (OT) during the month but will only be paid for this the following month, this will be considered AW and not OW. If they are paid before the 14th, it will be considered OW.
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Example 1:

As the OT was paid prior to 14 May, it is classified as OW for April.

Example 2:

As this 6-week period of overtime was paid together on 30 June, different classifications apply. The OT from 25 April to 30 April and 1 May to 31 May can only be classified as OW for the month worked if it is paid by the 14th of the following month – 14 May and 14 June, respectively. As the payment date is 30 June, 25 April to 31 May was classified as AW for the month of June.

Different contribution rates apply to OW and AW according to the employee’s age and residency status, as well as how much wages they are paid in a calendar month. Access Definitiv supports contribution rates for Private Sector / Non-Pensionable Government Employees.

For a table of current contribution rates, please see the following on the CPF website;

Please note, Access Definitiv only supports the first three tables;

Example:

Different CPF contribution ceilings apply to OW and AW. When an employee’s wages reach these ceilings, no more contributions are required from both parties for that type of wage.

The OW ceiling limits the amount of OW that attracts CPF contributions in a calendar month. The OW ceiling is currently capped at the following:
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The AW ceiling limits the amount of AW that attracts CPF contributions in a calendar year. This ceiling is calculated as follows; $102,000 – Total Ordinary Wage subject to CPF for the year. This ceiling is applied at a per employer, per calendar year level.

To calculate an employee’s AW ceiling, their OW earnings for the calendar year must be known. As this can only occur when an employee is terminated or the calendar year has ended, Access Definitiv will automatically estimate the ceiling each month. For employees on salary or monthly salary pay policies, the estimation uses the pay policy rate to forecast future earnings. For employees on daily or hourly pay policies, earnings are forecasted by averaging prior earnings. The ceiling no longer needs to be estimated when processing a termination pay or a pay run in December.
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Access Definitiv also automatically considers increases in the OW ceiling and any increases or decreases to an employee’s salary throughout the calendar year to adjust the AW ceiling.
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For examples of how the AW ceiling is calculated from 1 January 2024 in Access Definitiv, please click here.

When processing a termination pay or a pay run in December, any CPF overpayments on AW from within that calendar year will appear in the employee’s calculated pay. It will also be displayed in the CPF Contributions report in the Additional Wages Refund – Employer and Additional Wages Refund – Employee columns.
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The RFM/Form CAPVC should then be completed and submitted along with a copy of the CPF Contributions report from Access Definitiv. If approved by the Board, the refund amount will be sent to you and your employee separately.

If excess CPF contributions have been made, you may apply to the Board to adjust the excess CPF contributions paid to a later month. Application for the adjustment must be made immediately and no later than one year from the date of payment. Otherwise, it will be deemed properly paid and cannot be adjusted.
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Please note the following: