How do I derive the share of excess contributions to be refunded to my employee?
For example, if your employee is a Singaporean Citizen who is below 55 years old and has received a total of $40,000 of CPF contributions for 2023, the excess contributions to be refunded to your employee can be estimated based on the calculation below:
Step 1: Total excess CPF contributions refunded to the employer
= Total CPF contributions paid – CPF Annual Limit
= $40,000 – $37,740
= $2,260
Step 2: Employee’s share to be refunded
= (Total excess CPF contributions refunded ÷ applicable CPF contribution rate) x applicable employee CPF contribution rate
= ($2,260 ÷ 37%1) x 20%1
= $1,221* (cents should be dropped)
* You can also verify the above estimated employee’s share of refund by computing the difference between the total employee’s share of contributions paid and employee’s share of contributions payable. The employee’s share of contributions payable can be computed using the Additional Wage ceiling Calculator.
1 This rate is applicable for an employee who is a Singapore Citizen or Singapore Permanent Resident (3rd year onwards) and is 55 or below.
