CPFB | What payments attract CPF contributions

Employer obligations

What payments attract CPF contributions

As an employer, you’ll need to pay CPF contributions on wages payable to your employees. Find out the definition of wages and how to classify them into Ordinary Wages and Additional Wages.

Definition

What are wages

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.

Quick tip

CPF contributions are computed based on an employee's wages.

Examples of wages

Here are some examples of what are considered wages.

Basic wage

Salary payable to an employee for work done.

Overtime pay

Payment to an employee for working beyond normal working hours.

Bonus

Payment such as performance bonus.

Allowance

For example, meal allowance and transport allowance.

Commission

For example, sales commission.

Cash incentive

For example, productivity incentive.

Examples of payments that are not considered wages

These payments are not considered wages and do not attract CPF contributions.

Termination benefit

Compensation that is not given for services or work done by the employee. For example, retrenchment benefit.

Reimbursement

Reimbursement incurred on behalf of the employer for official purposes. The reimbursement amount must not exceed the expenditure incurred. For example, purchase of office stationery.

Benefit in kind

Non-cash benefit or gift given to the employee. For example, a commemorative watch.

Need more examples?

View more examples of allowances and payments that attract CPF, as well as payments that are not considered wages.

See examples (PDF, 0.2MB)

Classification

Classifying wages as Ordinary Wages or Additional Wages

Total Wages (TW)

Wages can be classified into Ordinary Wages or Additional Wages. Total Wages is the sum of Ordinary Wages and Additional Wages.

CPF contributions are computed on Total Wages payable to the employee in a calendar month, with different ceilings applied to Ordinary Wages and Additional Wages.

Ordinary Wages (OW)

What are Ordinary Wages?

For wages to be classified as Ordinary Wages for the month, it must satisfy both conditions below:

The wages are due or granted wholly or exclusively in respect of an employee’s employment during that month; and
The wages for that month are payable by 14^th of the following month.

For example, monthly salary.

Ordinary Wage ceiling

The Ordinary Wage (OW) ceiling limits the amount of OW that attract CPF contributions in a calendar month for all employees. It will be gradually raised to $8,000 by 2026.

Information on past OW ceilings can be found in the CPF contribution rate tables.

View table

How the Ordinary Wage ceiling works

If the OW ceiling is $7,400 and the employee's OW for the calendar month is $8,000, his/her contribution would be computed based on $7,400. That means CPF contributions are not required on the remaining $600.

Additional Wages (AW)

What are Additional Wages?

Wages which are not classified as Ordinary Wages will be Additional Wages for the month.

For example, annual performance bonus.

Additional Wage ceiling

The Additional Wage ceiling limits the amount of Additional Wages that attract CPF contributions. The Additional Wage ceiling is applied on a per employer per calendar year basis.

The Additional Wage ceiling is computed as follows.

$102,000 - Total Ordinary Wage subject to CPF for the year

How the Additional Wage ceiling works

Learn how the Additional Wage ceiling is computed and applied.

See examples (PDF, 0.4MB)

Additional Wage ceiling calculator

This tool helps you compute the Additional Wage ceiling for your employees, in just minutes.

Use calculator

FAQs

Common questions

Are CPF contributions payable on reimbursements of employee/flexible benefits?

Are CPF contributions payable on "per diem" payments?

View all

Last login on {loginDate}