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Making Voluntary Contributions

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Is overtime (OT) pay classified as Ordinary Wages (OW) or Additional Wages (AW)?

For wages to be classified as Ordinary Wages (OW) 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 14th of the following month.

Wages which are not classified as OW will be Additional Wages (AW) for the month.

The overtime (OT) pay has to be apportioned to OT performed in each calendar month before classification. Please see examples below.

Example 1: OT performed in a calendar month

S/N

OT performed

Payable date for OT pay

Classification

CPF payable by

a

1 to 30 Apr

10 May

OW for Apr

14 May

b

1 to 30 Apr

30 May

AW for May

14 Jun

*Please note that the payable date refers to the date where company is contractually obligated to pay employee the wages. Do note that the Employment Act (EA) also imposes certain requirements on the timing for salary payment if employee is covered under EA. If there are circumstances that resulted in administrative delays in payment e.g. new employee joins after payroll cut-off date, you should use the payable date to determine the classification of wages.

Example 2: OT performed across two calendar months, e.g. 25 Mar to 24 Apr

S/N

OT performed

Payable date for OT pay

Classification

CPF payable by

a

25 Mar to 24 Apr

30 Apr

OT pay from 25 Mar to 30 Mar

= AW for Apr*

OT pay from 1 Apr to 24 Apr

= OW for Apr

14 May

*As CPF contribution is computed based on calendar month, the OT component from 25 Mar to 30 Mar can only be classified as OW if it is payable by 14th of the month following Mar i.e. 14 Apr. Since the OT pay is only payable on 30 Apr, it does not fulfil the second condition for it to be classified as OW.