To determine the CPF contributions on Additional Wage (AW) payable, the AW ceiling has to be first calculated. The AW ceiling sets the maximum amount of AW on which CPF contributions are payable per year.

 

You should use current year's Ordinary Wages (OW) to estimate the AW ceiling whenever AW are payable for the current year. 

 

Once the employee’s total OW for the year are known, usually at the end of the year or in the last month of employment, you should re-calculate the AW ceiling based on the total OW subject to CPF contributions. You can refer to these examples (PDF, 0.5MB) on the computation of the AW ceiling.

 

Any shortfall in the CPF contributions after the re-computation should be paid together with December's contributions or contributions for your employee's last month of employment, whichever is applicable. If you have overpaid the CPF contributions, you can apply for a refund by selecting ‘Refund of payments made for 1 employee/platform worker’.