How is CPF shortfall calculated?
How is CPF shortfall calculated?
Shortfall CPF (X) = CPF on the total wage(X1) (employee eligible for including unpaid AW) – CPF already paid in that month (X2). calculated as below, CPF Excess = Total CPF paid in particular month – CPF on total wage (OW paid + AW to be paid after ceiling recalculation).
What is the maximum CPF contribution for additional wages?
The total ordinary wages (OW) will be capped at $72,000 (i.e. 12 months x $6,000) per year and the overall income cap on compulsory CPF contributions is $102,000 (i.e. 17 months x $6,000). Additional wages will be capped at an amount equal to the difference between $102,000 and the amount of ordinary wages.
What percentage is CPF?
What are the revised CPF contribution rates?
| Employee’s age (years) | CPF Contribution Rates changes from 1 Jan 2022 (monthly wages > $750) | |
|---|---|---|
| Total (% of wage) | By employee (% of wage) | |
| 55 & below | 37 | 20 |
| Above 55 to 60 | 28 | 14 |
| Above 60 to 65 | 18.5 | 8.5 |
Is CPF payable for bonus?
Under the CPF Act, wages are defined as remuneration in money, including any bonus that is due or granted to a person in respect of his employment. CPF contributions are computed based on an employee’s wages.
How do you calculate additional wages?
For example, if your employee earns $8,000 a month, and earns an annual bonus of $20,000. Only the first $6,000 of his/her monthly income will be subject to CPF contributions. As for his/her annual bonus, the Additional Wage Ceiling is $102,000 – $6,000 x 12 = $30,000.
Is Commission considered additional wages?
Monthly Commission is classified as Ordinary Wages (OW), whereas Non-Monthly Commission is classified as Additional Wages (AW).
What is the difference between ordinary wages and additional wages?
Examples are food allowance and overtime pay. Additional Wage refers to wages which are not granted wholly and exclusively for the month. Examples are the annual bonus, leave pay, incentive and other payments made at intervals of more than a month. Ordinary Wage has a monthly ceiling for CPF contribution of $6,000.
Is overtime considered additional wage?
Wages which are not classified as Ordinary Wages will be Additional Wages for the month. For example, if an employee does overtime (OT) during a month, but will only be paid for their overtime the following month, this will be considered AW, rather than OW.
What is the CPF contribution rate in 2021?
Note on CPF contributions for 55 & above: Over the next 10 years, CPF contributions for older workers will be gradually adjusted upwards to meet the full contribution rate of 37% (employee + employer).
What is the CPF rate for employee?
FAQs
| CPF contribution rate | |
|---|---|
| For wages earned in January 2022 (55 years and below) | For wages earned in February 2022 (Above 55 to 60 years) |
| 37% of total wages (>$750) (Employer’s share = 17%; Employee’s share = 20%) | 28% of total wages (>$750) (Employer’s share = 14%; Employee’s share = 14%) |
Is allowance subjected to CPF?
Are CPF contributions payable on allowances? Allowances, i.e. monetary payments that increase your employee’s wages, are also wages. Hence, they will attract CPF contributions. Some examples include meal and transport allowance, etc.
Is overtime subject to CPF?
CPF contributions are payable on overtime pay given to your employee..
