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Any excess leave will reduce the wages in the month where the excess leave was taken. CPF contributions must be computed on the wages after deduction of the excess leave taken in that month.

If CPF contributions have already been paid, you should apply for an adjustment or refund of the excess CPF contributions instead of offsetting it from the CPF contributions in the current month.

John earns $1,000 per month and is entitled to 12 days of annual leave a year (equivalent to one day per month). He left employment on 30 June, and his pro-rated leave entitlement is six days.

He has taken nine days of annual leave in May.

Month	Wages	Leave taken in that month	Excess Leave	Deduction for excess leave	Wages after deduction for excess leave
May	$1,000	9	3	$150	$850
June	$1,000	0	0	$0	$1,000

To find out more on the definition and calculation of daily wages, please refer to the Ministry of Manpower website.

As shown above, the employer should re-compute CPF contributions for May based on wages of $850. Since his employer would have already paid CPF contributions for May, his employer should apply for a refund/adjustment of CPF contributions for May. His employer should not offset the excess CPF contributions paid from the month of June.