Are CPF contributions payable on Annual Wage Supplement (AWS)?
CPF contributions are payable on Annual Wage Supplement (AWS) given to your employee.
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CPF contributions are payable on Annual Wage Supplement (AWS) given to your employee.
CPF contributions are payable on bonus given to your employee, e.g. retention Bonus, 13th month bonus, sign-on bonus, discretionary bonus.
CPF contributions are payable on mobile phone subscription allowance. CPF contributions are not payable on mobile phone subscription reimbursement if your employee incurred the expenses solely for official purposes. Otherwise, CPF contributions are still payable.
CPF contributions are payable on housing or rental subsidy given to your employee.
CPF contributions are payable on payments given to your employee for meeting the Key Performance Indicators.
CPF contributions are payable on meal allowance given to your employee.
CPF contributions are not payable on meal reimbursement given to your employee for working beyond normal working hours, e.g. overtime and on non-working days. Otherwise, CPF contributions are still payable.
CPF contributions are payable on probation period pay.
CPF contributions are payable on tips that you have collected and distributed to your employees.
CPF contributions are payable on bonus given to your employee by a third party, e.g. your service partner, if the bonus is a reward for work done in respect of your employee’s employment.
Example
Company A is a marketing company partnering various banks to help increase its sales for personal loans and credit cards. Upon achieving specific monthly targets, the banks will give bonuses to the employees of Company A as a reward. Company A receives these bonuses from the banks and disburses to its employees.
Company A is required to pay CPF contributions on the bonuses given to its employees as the cash payments are wages given in respect of their employment.
CPF contributions are not payable on benefit given to your employee in kind, e.g. a commemorative watch or payment made directly by you to a service provider.
Such benefit in kind where no cash payment to your employee is involved would not be considered as wages because only remuneration in money granted in respect of employment attracts CPF contributions.
CPF contributions are payable on gratuity and ex-gratia payments that are given in respect of your employee’s employment. For example, if the payment is to:
CPF contributions are not payable on the gratuity and ex-gratia payments if they are compensations given for termination or loss of employment.
Retirement gratuity given to retired employee who is subsequently re-employed
CPF contributions are not payable on retirement gratuity if it is given to your employee without any condition, i.e. it is given regardless of whether he is subsequently re-employed by you under a new employment contract.
However, CPF contributions are payable if it is given on the condition that he takes up the new employment with you. This cash payment will be considered as wages as it is given in respect of his new employment.
CPF contributions are not payable on monetary donations given to your employee for bereavement.
CPF contributions are not payable on reimbursements incurred for official purposes. The reimbursement amount must not exceed the expenditure incurred.
Some examples are:
CPF contributions are payable on monetary wedding gift given to your employee.
CPF contributions are not payable for your employees posted to work overseas.
As such, CPF contributions are not required on bonuses paid when your employee is posted overseas. It does not matter if the bonus is granted on account of his employment in Singapore prior to the overseas posting.
Similarly, if your employee is currently working in Singapore, any bonuses that becomes payable during this period would attract CPF contributions.
The above CPF treatments apply only if there is no change in employer, i.e. you are still the employer, despite the change in country of employment for your employee.
Where the Singapore employer and the overseas employer are different legal entities
CPF contributions are payable if:
a. Your employee has terminated the employment contract with you in Singapore and started a new employment with an overseas employer; and
b. The bonus is payable by you for your employee’s employment in Singapore.
CPF contributions are not payable if:
a. The employee has terminated the employment contract with the overseas employer and started a new employment with you in Singapore; and
b. The bonus is payable by the overseas company for employment overseas.