ADDITIONAL WAGE (AW) CEILING

The AW Ceiling determines the maximum amount of AW subject to CPF contributions for the year. An employee’s AW Ceiling is computed on a
per employer, per year basis. The Ceiling applies to all Singapore Citizens and Singapore Permanent Residents (SPR).

AW Ceiling Calculation

The AW Ceiling is computed using the following formula:

$102,000* - Total Ordinary Wages (OW) subject to CPF for the year

*Calculated based on prevailing OW Ceiling of $6,000 x 17 months

Step 1: At the start of the year, employers should first estimate the AW ceiling by using the current year’s estimated monthly OW.

Step 2: At the end of the year, upon an employee’s resignation or if there are changes in the employee’s salary, employers are to re-calculate
the AW ceiling of the year based on the OW paid.

Any shortfall in contributions should be paid together with the CPF contributions at the end of the year in December or in the employee’s last
month of employment.

If excess CPF contributions were paid, employers should apply for a refund via CPF Board's digital services.

The applicable AW Ceiling depends on the due and payable date of the AW. For example, if the 2020 bonus is due and payable to the employee
in 2021, then the employer should contribute according to the 2021 AW Ceiling.

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1. Employee earns more than $6,000 of Ordinary Wage (OW)

My employee who is below 55 years old, earned a monthly salary of $7,000. He will be receiving a total Additional Wage (AW) of $100,000 in
2021.

Estimated Additional Wage (AW) Ceiling:

$102,000 – ($6,000 x 12) = $30,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200 12,000 12,000 2,040 2,400
Feb 7,000 6,000 1,020 1,200
Mar 7,000 6,000 1,020 1,200
Apr 7,000 6,000 1,020 1,200
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200 10,000 10,000 1,700 2,000
Jul 7,000 6,000 1,020 1,200
Aug 7,000 6,000 1,020 1,200
Sep 7,000 6,000 1,020 1,200
Oct 7,000 6,000 1,020 1,200
Nov 7,000 6,000 1,020 1,200
Dec 7,000 6,000 1,020 1,200 78,000 8,000 1,360 1,600
Total 84,000 72,000 12,240 14,400 100,000 30,000 5,100 6,000

In this case, the maximum AW that is subject to CPF in 2021 would be $30,000. The remaining AW of $70,000 would not be subject to CPF, if
your employee works till the end of the year.

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2. Employee earns less than $6,000 of Ordinary Wage (OW)

My employee who is below 55 years old, earned a monthly salary of $4,500. He will be receiving a total Additional Wage (AW) of $100,000 in
2021.

Estimated Additional Wage (AW) Ceiling:

$102,000 – ($4,500 x 12) = $48,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 4,500 4,500 765 900
Feb 4,500 4,500 765 900 5,000 5,000 850 1,000
Mar 4,500 4,500 765 900 40,000 40,000 6,800 8,000
Apr 4,500 4,500 765 900
May 4,500 4,500 765 900
Jun 4,500 4,500 765 900
Jul 4,500 4,500 765 900
Aug 4,500 4,500 765 900
Sep 4,500 4,500 765 900
Oct 4,500 4,500 765 900
Nov 4,500 4,500 765 900
Dec 4,500 4,500 765 900 55,000 3,000 510 600
Total 54,000 54,000 9,180 10,800 100,000 48,000 8,160 9,600

In this case, the maximum AW that is subject to CPF in 2021 would be $48,000. The remaining AW of $52,000 would not be subject to CPF, if
your employee works till the end of the year.

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3. Employee’s Ordinary Wage (OW) increased during the year

My employee who is below 55 years old, earned a monthly salary of $4,500 from Jan to Mar 2021. His salary then increased to $6,000 from
Apr to Dec 2021. He will be receiving a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($4,500 x 12) = $48,000

Re-calculation of AW Ceiling as at Apr 2021*:

$102,000 – [($4,500 x 3) + ($6,000 x 9)] = $34,500

* Re-calculation to be done as there were adjustments to the salary in Apr

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 4,500 4,500 765 900 20,000 20,000 3,400 4,000
Feb 4,500 4,500 765 900
Mar 4,500 4,500 765 900
Apr 6,000 6,000 1,020 1,200 30,000 14,500 2,465 2,900
May 6,000 6,000 1,020 1,200
Jun 6,000 6,000 1,020 1,200
Jul 6,000 6,000 1,020 1,200
Aug 6,000 6,000 1,020 1,200
Sep 6,000 6,000 1,020 1,200
Oct 6,000 6,000 1,020 1,200
Nov 6,000 6,000 1,020 1,200
Dec 6,000 6,000 1,020 1,200 50,000 0 0 0
Total 67,500 67,500 11,475 13,500 100,000 34,500 5,865 6,900

With the increment of your employee’s OW in Apr 2021, his AW subject to CPF in 2021 would be $34,500 instead of $48,000. The remaining
AW paid of $65,500 would not be subject to CPF, if your employee works till the end of the year.
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4. Employee’s Ordinary Wage (OW) decreased during the year

My employee who is below 55 years old, earned a monthly salary of $7,000 from Jan to Jun 2021. His salary decreased to $5,000 from Jul to
Dec 2021. He will be receiving a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling before OW changed:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling at end of the year:

$102,000 – [($6,000 x 6) + ($5,000 x 6)] = $36,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200
Feb 7,000 6,000 1,020 1,200 20,000 20,000 3,400 4,000
Mar 7,000 6,000 1,020 1,200
Apr 7,000 6,000 1,020 1,200 20,000 10,000 1,700 2,000
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200 20,000 0 0 0
Jul 5,000 5,000 850 1,000
Aug 5,000 5,000 850 1,000 20,000 0 0 0
Sep 5,000 5,000 850 1,000
Oct 5,000 5,000 850 1,000 20,000 0 0 0
Nov 5,000 5,000 850 1,000
Dec 5,000 5,000 850 1,000 6,000 1,020 1,200
Total 72,000 66,000 11,220 13,200 100,000 36,000 6,120 7,200

With the decrease in your employee’s OW in Jul 2021, his AW subject to CPF in 2021 would be $36,000 instead of $30,000. The employer is
required to re-calculate the AW Ceiling at the end of the year and pay the CPF shortfall on AW of $6,000 in Dec 2021.

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5. Employee joined the company during the year

My employee who is below 55 years old, earned a monthly salary of $7,000 starting from Jun 2021. He will be receiving a total Additional Wage
(AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling:

$102,000 – ($6,000 x 7) = $60,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jun 7,000 6,000 1,020 1,200 50,000 50,000 8,500 10,000
Jul 7,000 6,000 1,020 1,200
Aug 7,000 6,000 1,020 1,200 50,000 10,000 1,700 2,000
Sep 7,000 6,000 1,020 1,200
Oct 7,000 6,000 1,020 1,200
Nov 7,000 6,000 1,020 1,200
Dec 7,000 6,000 1,020 1,200
Total 49,000 42,000 7,140 8,400 100,000 60,000 10,200 12,000

Your employee’s AW subject to CPF in 2021 would be $60,000. The remaining AW paid of $40,000 would not be subjected to CPF, if your
employee works till the end of the year.

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6. Employee left employment during the year

My employee who is below 55 years old, earned a monthly salary of $7,000. He subsequently resigned in Aug 2021. He will be receiving a total
Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling in the last month of employment (Aug 2021):

$102,000 – ($6,000 x 8) = $54,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200 70,000 30,000 5,100 6,000
Feb 7,000 6,000 1,020 1,200
Mar 7,000 6,000 1,020 1,200 30,000 0 0 0
Apr 7,000 6,000 1,020 1,200
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200
Jul 7,000 6,000 1,020 1,200
Aug 7,000 6,000 1,020 1,200 24,000 4,080 4,800
Total 56,000 48,000 8,160 9,600 100,000 54,000 9,180 10,800

The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on AW of
$24,000 in Aug 2021.

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7. Employee left employment during the year

My employee who is below 55 years old, earned a monthly salary of $7,000. He resigned in early Jun 2021 and his salary was prorated at
$1,500. The company then paid him a bonus of $54,000 in Jul 2021. He received a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling in the last month of employment (Jun 2021):

$102,000 – [($6,000 x 5) + $1,500] = $70,500

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200 3,000 3,000 510 600
Feb 7,000 6,000 1,020 1,200 12,000 12,000 2,040 2,400
Mar 7,000 6,000 1,020 1,200 4,000 4,000 680 800
Apr 7,000 6,000 1,020 1,200 12,000 11,000 1,870 2,200
May 7,000 6,000 1,020 1,200 15,000 0 0 0
Jun 1,500 1,500 255 300 16,000 2,720 3,200
Jul 0 0 0 0 54,000 24,500 4,165 4,900
Total 36,500 31,500 5,355 6,300 100,000 70,500 11,985 14,100

Jun 2021: The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on
AW of $16,000. This is because the AW given to the employee up to Jun 2021 was only $46,000, which is below the AW Ceiling.

Jul 2021: The employee was given another AW of $54,000 (after his resignation). Hence, the employer needs to re-calculate the AW Ceiling
and pay another CPF shortfall on AW of $24,500.

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8. Employee left employment during the year

My employee who is below 55 years old, earned a monthly salary of $4,000. He resigned in May 2021 and the company paid a bonus of
$18,500 in Jun 2021. He received a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($4,000 x 12) = $54,000

Re-calculation of AW Ceiling in the last month of employment (May 2021):

$102,000 – ($4,000 x 5) = $82,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 4,000 4,000 680 800 2,500 2,500 425 500
Feb 4,000 4,000 680 800 33,500 33,500 5,695 6,700
Mar 4,000 4,000 680 800 3,500 3,500 595 700
Apr 4,000 4,000 680 800 18,500 14,500 2,465 2,900
May 4,000 4,000 680 800 23,500 27,500 4,675 5,500
Jun 0 0 0 0 18,500 500 85 100
Total 20,000 20,000 3,400 4,000 100,000 82,000 13,940 16,400

May 2021: The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay CPF on the AW
shortfall of $27,500. This is because the AW given to the employee up to May 2021 was only $81,500, which is below the AW Ceiling.

Jun 2021: The employee was given another AW of $18,500 (after his resignation). The employer would therefore need to re-calculate the AW
Ceiling and pay another CPF shortfall on AW of $500.

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9. Employee left employment during the year
My employee who is below 55 years old, earned a monthly salary of $7,000. He resigned in Jun 2021 and the company paid a bonus of
$62,372.64 in Jul 2021. He received a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling in the last month of employment (Jun 2021):

$102,000 – ($6,000 x 6) = $66,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200 2,850.60 2,850.60 485 570
Feb 7,000 6,000 1,020 1,200 3,753.82 3,753.82 639 750
Mar 7,000 6,000 1,020 1,200 24,000.50 23,395.58 3,977 4,679
Apr 7,000 6,000 1,020 1,200 7,022.44 0 0 0
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200 7,627.36 1,297 1,525
Jul 0 0 0 0 62,372.64 28,372.64 4,824 5,674
Total 42,000 36,000 6,120 7,200 100,000 66,000 11,222 13,198

Jun 2021: The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on
AW of $7,627.36 ($604.92 + $7,022.44). This is because the AW given to the employee up to Jun 2021 was only $37,627.36, which is below
the AW Ceiling.

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Total CPF payable in Jun 2021 should be calculated as follows:

AW Subject to Month in which CPF is Total CPF payable Employer Share Employee Share
CPF payable of CPF payable of CPF payable
24,000.50 Refer to (i) & (ii) 8,880 4,080 4,800
(i) (23,395.58) Mar 2021 (capped at $30,000) (8,656) (3,977) (4,679)
(ii) 604.92 Jun 2021 (re-calculation) 224 103 121
7,022.44 Jun 2021 (re-calculation) 2,598 1,194 1,404
Total Contributions Payable on AW in Jun 2021 2,822 1,297 1,525

Jul 2021: Although the employer had paid the CPF shortfall on AW in Jun 2021, there was another AW of $62,372.64 paid to the employee
after his resignation. The employer would therefore need to pay another CPF shortfall on AW of $28,372.64.

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10. Employee change of age group during the year

My employee who turned 55 years old in Jun 2021 earned a monthly salary of $10,000. He will be receiving a total Additional Wage (AW) of
$100,000 in 2021.

Estimated Additional Wage (AW) Ceiling:

$102,000 – ($6,000 x 12) = $30,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 10,000 6,000 1,020 1,200
Feb 10,000 6,000 1,020 1,200 5,000 5,000 850 1,000
Mar 10,000 6,000 1,020 1,200
Apr 10,000 6,000 1,020 1,200 5,000 5,000 850 1,000
May 10,000 6,000 1,020 1,200
Jun 10,000 6,000 1,020 1,200 5,000 5,000 850 1,000
Jul 10,000 6,000 780 780
Aug 10,000 6,000 780 780 20,000 15,000 1,950 1,950
Sep 10,000 6,000 780 780
Oct 10,000 6,000 780 780 65,000 0 0 0
Nov 10,000 6,000 780 780
Dec 10,000 6,000 780 780
Total 120,000 72,000 10,020 11,100 100,000 30,000 4,500 4,950

Your employee’s AW subject to CPF in 2021 would be $30,000. The remaining AW paid of $70,000 would not be subject to CPF, if your
employee works till the end of the year.

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11. Employee change of Original Wage (OW) and age group during the year

My employee who turned 55 years old in Jun 2021, earned a monthly salary of $7,000 from Jan to Jun 2021 and $5,000 from Jul to Dec 2021.
He will be receiving a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling before OW changed:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling at end of the year:

$102,000 – [($6,000 x 6) + ($5,000 x 6)] = $36,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200
Feb 7,000 6,000 1,020 1,200 20,000 20,000 3,400 4,000
Mar 7,000 6,000 1,020 1,200
Apr 7,000 6,000 1,020 1,200 20,000 10,000 1,700 2,000
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200 20,000 0 0 0
Jul 5,000 5,000 650 650
Aug 5,000 5,000 650 650 20,000 0 0 0
Sep 5,000 5,000 650 650
Oct 5,000 5,000 650 650 20,000 0 0 0
Nov 5,000 5,000 650 650
Dec 5,000 5,000 650 650 0 6,000 1,020 1,200
Total 72,000 66,000 10,020 11,100 100,000 36,000 6,120 7,200

The employer is required to re-calculate the AW Ceiling and pay the CPF shortfall on AW of $6,000 in Dec 2021. The CPF shortfall on AW
should be paid using the contribution rate as at Apr 2021 (37%) instead of Dec 2021 (26%), as the CPF shortfall arises from the AW paid in Apr
2021 (before change of age group).
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12. Employee change of Ordinary Wage (OW) and age group during the year

My employee who turned 55 years old in Jun 2021, earned a monthly salary of $10,000 from Jan to Jun 2021 and $5,000 from Jul to Dec 2021.
He will be receiving a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling before OW changed:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling at end of the year:

$102,000 – [($6,000 x 6) + ($5,000 x 6)] = $36,000

OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month / OW Paid
to CPF Employer Employee to CPF Employer Employee
Year 2021 ($)
($) ($) ($) ($) ($) ($) ($)
Jan 10,000 6,000 1,020 1,200
Feb 10,000 6,000 1,020 1,200
Mar 10,000 6,000 1,020 1,200
Apr 10,000 6,000 1,020 1,200 10,000 10,000 1,700 2,000
May 10,000 6,000 1,020 1,200
Jun 10,000 6,000 1,020 1,200 22,000 20,000 3,400 4,000
Jul 5,000 5,000 650 650
Aug 5,000 5,000 650 650
Sep 5,000 5,000 650 650
Oct 5,000 5,000 650 650 68,000 0 0 0
Nov 5,000 5,000 650 650
Dec 5,000 5,000 650 650 6,000 860 920
Total 90,000 66,000 10,020 11,100 100,000 36,000 5,960 6,920

The employer is required to re-calculate the AW Ceiling and pay the CPF shortfall on AW of $6,000 in Dec 2021.

Do note that the CPF shortfall on AW should be paid based on the following:
a) Balance of $2,000 paid in Jun 2021 should use the contribution rate as at Jun 2021 (37%)
b) Balance of $4,000 paid in Oct 2021 should use the contribution rate as at Oct 2021 (26%)
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13. Employee change of age group and left employment during the year

My employee who turned 55 years old in Jun 2021 earned a monthly salary of $7,000. He resigned in Aug 2021. He received a total Additional
Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 12) = $30,000

Re-calculation of AW Ceiling in the last month of employment (Aug 2021):

$102,000 – ($6,000 x 8) = $54,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200 40,000 30,000 5,100 6,000
Feb 7,000 6,000 1,020 1,200
Mar 7,000 6,000 1,020 1,200
Apr 7,000 6,000 1,020 1,200
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200
Jul 7,000 6,000 780 780
Aug 7,000 6,000 780 780 60,000 24,000 3,520 3,820
Total 56,000 48,000 7,680 8,760 100,000 54,000 8,620 9,820

The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on AW of
$24,000 in Aug 2021.

Do note that the CPF shortfall on AW should be paid based on the following:
a) Balance of $10,000 paid in Jan 2021 should use the contribution rate as at Jan 2021 (37%)
b) Balance of $14,000 ($54,000 - $40,000) should use the contribution rate as at Aug 2021 (26%)

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14. Employee change of age group and left employment during the year

My employee who turned 55 years old in Jun 2021 earned a monthly salary of $7,000 from Feb 2021. He resigned in early Nov 2021 and his
salary was prorated to $2,000. The company paid an AW of $60,000 in Dec 2021. He received a total Additional Wage (AW) of $100,000 in
2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 11) = $36,000

Re-calculation of AW Ceiling in the last month of employment (Nov 2021):

$102,000 – [($6,000 x 9) + $2,000] = $46,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan
Feb 7,000 6,000 1,020 1,200 40,000 36,000 6,120 7,200
Mar 7,000 6,000 1,020 1,200
Apr 7,000 6,000 1,020 1,200
May 7,000 6,000 1,020 1,200
Jun 7,000 6,000 1,020 1,200
Jul 7,000 6,000 780 780
Aug 7,000 6,000 780 780
Sep 7,000 6,000 780 780
Oct 7,000 6,000 780 780
Nov 2,000 2,000 260 260 4,000 680 800
Dec 60,000 6,000 780 780
Total 65,000 56,000 8,480 9,380 100,000 46,000 7,580 8,780

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Nov 2021: The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on
AW of $4,000. This is because the AW given to the employee up to Nov 2021 was only $40,000.

Dec 2021: The employee was given another AW of $60,000 (after his resignation). The employer would therefore need to re-calculate the AW
Ceiling and pay another CPF shortfall on AW of $6,000.

Please note that the CPF shortfall on AW should be paid based on the following:
a) Balance of $4,000 paid in Feb 2021 should use the contribution rate as at Feb 2021 (37%)
b) Balance of $6,000 ($46,000 - $40,000) should use the contribution rate as at Dec 2021 (26%)

17
15. Employee change of age group and left employment during the year

My employee who turned 55 years old in Mar 2021 earned a monthly salary of $7,000. He resigned in Jun 2021 and the company paid an AW of
$62,372.64 in Jul 2021. He received a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 12) = $30,000

AW Ceiling as at last month of employment (Jun 2021):

$102,000 – ($6,000 x 6) = $66,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 7,000 6,000 1,020 1,200 2,850.60 2,850.60 485 570
Feb 7,000 6,000 1,020 1,200 3,753.82 3,753.82 639 750
Mar 7,000 6,000 1,020 1,200 24,000.50 23,395.58 3,977 4,679
Apr 7,000 6,000 780 780 7,022.44 0 0 0
May 7,000 6,000 780 780
Jun 7,000 6,000 780 780 7,627.36 1,017 1,033
Jul 62,372.64 28,372.64 3,689 3,688
Total 42,000 36,000 5,400 5,940 100,000 66,000 9,807 10,720

Jun 2021: The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on AW
of $7,627.36. This is because the AW given to the employee up to Jun 2021 was only $37,627.36, which is below the AW Ceiling.
The total CPF payable in Jun 2021 should be calculated as follows:

AW Subject to Month in which CPF is Total CPF payable Employer Share Employee Share
CPF payable of CPF payable of CPF payable
24,000.50 Refer to (i) & (ii) 8,880 4,080 4,800
(i) (23,395.58) Mar 2021 (capped at $30,000) (8,656) (3,977) (4,679)
(ii) 604.92 Jun 2021 (re-calculation) 224 103 121
7,022.44 Jun 2021 (re-calculation) 1,826 914 912
Total Contributions Payable on AW in Jun 2021 2,050 1,017 1,033
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Please note that the CPF shortfall on AW should be paid based on the following:
a) Balance of $604.92 paid in Mar 2021 should use the contribution rate as at Mar 2021 (37%)
b) Balance of $7022.44 paid in Apr 2021 should use the contribution rate as at Apr 2021 (26%)

Jul 2021: There was another AW of $62,372.64 paid to the employee after his resignation. The employer would therefore need to pay the CPF
shortfall on AW of $28,372.64.

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16. Employee left and re-joined the company

My employee who is below 55 years old earned a monthly salary of $10,000 from Jan to Apr 2021. He received Additional Wages (AW) of
$50,000 in Feb 2021. He then resigned in Apr 2021.

Subsequently, he re-joined the company in Sep 2021 with a monthly salary of $11,000. He also received another AW of $50,000 in Dec 2021.
He received a total Additional Wage (AW) of $100,000 in 2021.

Estimated Additional Wage (AW) Ceiling at the start of the year:

$102,000 – ($6,000 x 12) = $30,000

AW Ceiling as at last month of employment (Apr 2021):

$102,000 – ($6,000 x 4) = $78,000

Re-calculation of AW Ceiling at end of the year after re-joined:

$102,000 – ($6,000 x 8) = $54,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 10,000 6,000 1,020 1,200
Feb 10,000 6,000 1,020 1,200 50,000 30,000 5,100 6,000
Mar 10,000 6,000 1,020 1,200
Apr 10,000 6,000 1,020 1,200 20,000 3,400 4,000
May
Jun
Jul
Aug
Sep 11,000 6,000 1,020 1,200
Oct 11,000 6,000 1,020 1,200
Nov 11,000 6,000 1,020 1,200
Dec 11,000 6,000 1,020 1,200 50,000 4,000 680 800

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 Total 84,000 48,000 8,160 9,600 100,000 54,000 9,180 10,800

Apr 2021: The employer is required to re-calculate the AW Ceiling in the employee’s last month of employment and pay the CPF shortfall on
AW of $20,000.

Dec 2021: As the employee re-joined the company in Sep 2021, the employer is required to re-calculate the AW Ceiling and pay the CPF on
the balance AW of $4,000.

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17. Employee earns less than $750 of Ordinary Wage (OW) with fluctuating Additional Wage (AW)
My employee who is below 55 years old, earned a monthly salary of $500. He will be receiving a total Additional Wage (AW) of $162,000 in
2021.

Estimated Additional Wage (AW) Ceiling:

$102,000 – ($500 x 12) = $96,000

OW Paid OW Subject CPF Payable on OW AW Paid AW Subject CPF Payable on AW

Month /
to CPF Employer Employee to CPF Employer Employee
Year 2021
($) ($) ($) ($) ($) ($) ($) ($)
Jan 500 500 85 100 22,000 22,000 3,740 4,400
Feb 500 500 85 100 10,000 10,000 1,700 2,000
Mar 500 500 85 100 3,000 3,000 510 600
Apr 500 500 85 100 25,800 25,800 4,386 5,160
May 500 500 85 100 15,000 15,000 2,550 3,000
Jun 500 500 85 100 20,100 20,100 3,417 4,020
Jul 500 500 85 100 30,000 100.00 17 20
Aug 500 500 85 100 2,000
Sep 500 500 85 100 5,000
Oct 500 500 85 100 10,000
Nov 500 500 85 100 15,000
Dec 500 500 85 100 4,100
Total 6,000 6,000 1,020 1,200 162,000 96,000 16,320 19,200

Do note that the applicable CPF contribution is based on the employee’s total wages for the calendar month, prior to capping on AW. For Jul
2021, the employee’s total wages prior to capping on AW is $30,500, i.e. > $750. Hence, the contribution rate of 37% should be applied on the
wages subject to CPF.

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