Central Provident Fund (CPF) contributions in Singapore: Applicability, process, and deadline
May 8, 2024
Introduction to CPF Contributions
The Central Provident Fund (CPF) is a mandatory pension savings scheme in Singapore that both employers and employees contribute to.
It is designed to fund Singaporean and permanent resident employees' retirement, healthcare, and housing needs.
Who needs to make CPF contributions?
Employers: All employers in Singapore are required to make CPF contributions for their Singaporean and permanent resident employees.
Employees: Singaporean and permanent resident employees are also required to make contributions from their salaries.
What are the key components of CPF contributions?
Ordinary Wages (OW): Wages due and payable to an employee for the month but does not include Additional Wages (AW).
Additional Wages (AW): Wages which are not paid monthly, such as bonuses, annual leave encashment, incentives, etc.
Contribution Rates: Vary depending on the employee’s age, wages, and residency status. The total CPF contribution rate is up to 37%, with employers contributing up to 17% and employees up to 20%.
What is the CPF filing deadline?
CPF contributions are due at the end of the month for which wages are paid. The due date for CPF contribution payment is on the last day of the calendar month. Late payments are subject to penalties and interest charges.
What is the process for filing CPF?
Calculate CPF Contributions: Determine the CPF contribution amount based on the employee’s age, citizenship, and total wages (OW and AW).
Prepare CPF Submission Number (CSN): Ensure your company has a valid CSN, which is used for all CPF transactions.
Monthly Submission: Submit CPF contribution details and make payments monthly using the CPF e-Submit@web system, which is accessible through the CPF website.
Yearly Reconciliation: At the end of each year, reconcile the CPF amounts contributed with the actual salaries paid and adjust for any discrepancies in the following month’s submission.
What are the legal and financial implications of non-compliance?
Failure to make timely and correct CPF contributions can lead to fines, penalties, and legal action. Non-compliance may also result in a loss of reputation and trust among employees and the general public.
Frequently Asked Questions
What should I do if I accidentally overpaid CPF contributions for an employee?
You can apply for a refund of the overpaid CPF contributions through the CPF e-Submit@web system. The refund, if approved, will be credited to your bank account linked with the CPF Board.
Are foreign workers required to have CPF contributions made on their behalf?
No, CPF contributions are only mandatory for Singaporean citizens and permanent residents. Foreign workers on work passes are not required to contribute to the CPF.
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