Skip Ribbon Commands
Skip to main content

CPF Contributions for your Employees

QAre CPF contributions payable for cash reimbursements of employee/flexible benefits, e.g. medical treatment, car purchase, meal, child care fees, elderly care fees given etc, given to employee?

The nature of payment will determine if a cash (monetary) payment falls under the definition of wages. If the nature of the cash payments is a reward for services or work done by the employee, then these cash payments are considered as wages and consequently, CPF contributions are payable on these cash payments.

Similarly, CPF contributions are payable where the cash payments increase the employee's wages. For example, CPF contributions are payable for cash payments on items that are not incurred for official purposes, regardless of whether the cash payments were paid in advance or reimbursed to the employee (e.g. festive allowance paid in cash, reimbursement for gym membership fees and child care fees and elderly care fees, car purchase etc.).

CPF contributions are not payable on cash payments that are not wages, e.g., reimbursement of expenses incurred for official purposes and retrenchment benefits. In case of a reimbursement, the cash payment is not subject to CPF contributions if it is to pay for expenses that are necessarily incurred on behalf of the employer for official purposes. Please note that the amount reimbursed must not exceed the expenditure incurred. An example of a genuine reimbursement is the travelling expenses incurred by the employee for attending a business meeting in the course of his/her work for the employer.
The CPF treatment of employee benefits given via cash reimbursement is as follows. These changes (indicated in orange) are appended in the table below which will take effect from 1 January 2020:
For local and overseas medical and dental treatments [including Traditional Chinese Medicine (TCM)], the expenses incurred must be deemed necessary by the registered doctors, dentists and TCM practitioners.
There is no change in the CPF treatment for other employee benefits, i.e. CPF contributions are payable on reimbursement of other personal expenses e.g. medical insurance payments, gym membership fees etc., incurred by employees and their family members.
Reimbursement of medical and dental treatment expenses include expenses on tests (blood test, x-ray etc.) ordered by the registered doctors/dentists/TCM practitioners as part of treating medical/dental illnesses. If the tests are packaged as part of health screenings (that is, they are not part of treatment), then CPF contributions are payable.
For more details on the Definition of Wages, you can refer to the following FAQ:

Your session will be terminated soon. Click 'OK' to continue or 'Cancel' to Logout.


Your screen width is too small to display

Please adjust the width of your browser or use a desktop machine for a better web experience.

Thank you.