Understanding Deductions for Singapore
This section provides an overview of deductions for Singapore and discusses how to calculate:
Social club deductions.
Employee stock purchase plan deductions.
Loan payback deductions.
Loan repayment on termination deductions.
Leave without pay deductions.
Parking deductions.
Insurance deductions.
CPF funds and levies deductions.
Normal CPF deductions.
Voluntary CPF deductions.
Additional CPF deductions.
Adjustment CPF deductions.
Festive advance payback deductions.
Understanding Deductions for Singapore
Global Payroll for Singapore is delivered with deductions to enable you take advantage of the flexibility of the Global Payroll rules to meet common processing requirements. For example, you can use the Leave Without Pay deduction element for an approved unpaid absence event occurring in the period.
Note. The User Key 2 on the Earnings Accumulators page and Deduction Accumulators page for all earnings and deductions is IRS VR BAL GRP (Balance Group ID). Use balance group IDs to maintain separate employee balances. Set an employee's balance group on JOB_DATA2.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
In the following table, the first column combines the deductions name and description. A (gc) in the row indicates that the deduction has a generation control. A (po) indicates a post processing formula, (pr) indicates a pre processing formula. The other four columns indicate the deduction calculation rule of Unit × Rate, Unit × Rate × Percent, Amount.
Note. Two deductions—ESPP and LOAN PBCK—have a calculation rule of Base × % and the base is shown in the Unit column. The processing of some of the deductions codes are discussed in further detail in this section.
|
Name and Description |
Unit (or Base) |
Rate |
% |
Amount |
|
Social Club (gc) |
5.00 |
|||
|
Employee Stock Purchase Plan (pr) |
ESPP BASE AMOUNT |
Payee Level |
||
|
Loan Payback (po) (gc) |
SGP GROSS |
10.00 |
||
|
Loan Repayment on Termination (gc) |
LOAN BALANCE |
|||
|
Leave Without Pay |
Payee Level |
DAILY RT |
||
|
Parking |
20 |
|||
|
Insurance |
50 |
|||
|
Festive Advances Payback Deductions |
||||
|
Chinese New Year Payback (po) (gc) |
FAD AC ADV AMT |
100 |
||
|
Deepavali Advance Payback (po) (gc) |
FAD AC ADV AMT |
100 |
||
|
Christmas Advance Payback (po) (gc) |
FAD AC ADV AMT |
100 |
||
|
Hari Raya Advance Payback (po) (gc) |
FAD AC ADV AMT |
100 |
||
|
CPF Deductions |
||||
|
Foreign Worker Levy (gc) |
CPF FM FWL CALC |
|||
|
Mosque Building Mendaki Fund (gc) |
CPF FM MBMF CALC |
|||
|
Mosque Building Fund (gc) |
CPF FM MBF CALC |
|||
|
Yayasan Mendaki Fund (gc) |
CPF FM YMF CALC |
|||
|
Singapore Indian Development Association (gc) |
CPF FM SINDA CALC |
|||
|
Chinese Development Assistance Council (gc) |
CPF FM CDAC CALC |
|||
|
Eurasian Community Fund (gc) |
CPF FM ECF CALC |
|||
|
SHARE Programme Donations |
Payee Level |
|||
|
Skills Development Levy |
CPF FM SDL CALC |
|||
|
Employer Ordinary CPF (gc) (pr) |
CPF FM ORD ER |
|||
|
Employee Ordinary CPF (gc) (pr) |
CPF FM ORD PAYEE |
|||
|
Employer Additional CPF (pr) (gc) |
CPF FM ADD ER |
|||
|
Employee Additional CPF (gc) (pr) |
CPF FM ADD PAYEE |
|||
|
Employer Voluntary CPF (pr) |
CPF FM VOL ER |
|||
|
Employee Voluntary CPF (pr) |
CPF FM VOL PAYEE |
|||
|
Employer CPF Adjustment (pr) (gc) |
CPF VR EMPLR ADJ |
|||
|
Employee CPF Adjustment (pr) (gc) |
CPF VR PAYEE ADJ |
Calculating Social Club Deductions
The SOCIAL CLUB deduction reduces the employee's after-tax income by a nominated amount (when they gain membership to the company social club). This deduction element uses an Amount calculation rule. The amount is a numeric value of frequency (5)–per month. This value is annualized (× 12) and de-annualized (/pay frequency) in order to resolve correctly for the various pay calendars.
Generation control DED GC SOCIAL CLUB (using formula DED FM SOCIAL CLUB) is assigned to this element to ensure that the deduction is applied only once in a period and only in the larger of the segments within the period. There is no proration.
This deduction element subtracts from the SGP NET accumulator and adds to the SOCIAL CLUB_CMTDA and SOCIAL CLUB_CYTDA accumulators.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Employee Stock Purchase Plan Deductions
You use the ESPP (Employee Stock Purchase Plan) deduction to purchase company stock options. The deduction is limited to a certain percentage of the employee's pay. This deduction element uses a Base × Percent calculation rule. The Base is based on accumulator ESPP BASE AMOUNT (that houses the earning upon which the ESPP might be based). You enter the percent is entered via positive input (or generated at the payee level). A post processing control formula DED FM ESPP LIMIT is assigned to this element to ensure that the percent entered by the employee is not greater than the maximum allowed. There is no proration.
This deduction element subtracts from the SGP NET accumulator and adds to the ESPP_CMTDA and ESPP_CYTDA accumulators.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Loan Payback Deductions
You use the Loan Payback (LOAN PBCK) deduction to recover the amount paid for loans. The deduction is taken when there is amount in the loan balance accumulator. This deduction element uses a Base × Percent calculation rule, where the Base is the gross amount (SGP GROSS) for the period, and the percent is set as per your business requirement. Generation control DED GC LOAN PBCK is used to only resolve the deduction where the full recovery has not yet been made. A post processing formula DED FM CHCK LOAN is also used to ensure only the advanced amount is recovered.
This deduction element subtracts from the SGP NET and LOAN BALANCE accumulators and adds to the LOAN PBCK_CMTDA and LOAN PBCK_CYTDA accumulators.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Loan Repayment on Termination Deductions
The Loan Repayment on Termination (LOAN REPAY) deduction pays any outstanding loan balances upon termination. This deduction element uses an Amount calculation rule. The amount is derived from the LOAN BALANCE accumulator. Generation control CMN GC TERM STAT is used to check for terminated employees only.
This deduction element subtracts from the SGP NET and LOAN BALANCE accumulators and adds to the LOAN REPAY_CMTDA and LOAN REPAY_CYTDA accumulators.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Absence Entitlements on Termination
Calculating Leave Without Pay Deductions
The Calculating Leave Without Pay (LWOP) deduction is entered or generated as a result of an approved unpaid absence event occurring in the period. This amount is then taken from the gross amount. This deduction uses a Unit × Rate calculation rule. You enter the number of units to be paid via positive input (or generated at the payee level). The rate (DAILY RT) is derived from the payee's standard daily rate, which is stored as a system element. You use this deduction to pay the absence take LWOP.
This deduction element subtracts from the SGP GROSS accumulator and CPF ORD WAGES SEG accumulator and adds to the LWOP_CMTDA and LWOP_CYTDA accumulators.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Parking Deductions
You use the Parking (PARK) deduction for contributions for employee car parking. The deduction uses an Amount calculation rule, where the amount is 20.
This deduction element subtracts from the SGP NET accumulator and adds to the PARK_FYTDA accumulator.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Insurance Deductions
You use the INSURANCE deduction for employee insurance contributions. The deduction uses an Amount calculation rule, where the amount is 50.
This deduction element subtracts from the SGP NET accumulator and adds to the INSURANCE_FYTDA accumulator.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating CPF Funds and Levies Deductions
The CPF Board acts as an agent collecting contributions to a number of community funds and levies. Global Payroll deductions and the required supporting elements are provided for each of them. Deductions are included for the contributions by employees to the following community funds:
Foreign Worker Levy (FWL).
Mosque Building Mendaki Fund (MBMF).
Singapore Indian Development Association (SINDA).
Chinese Development Assistance Council (CDAC).
Share Programme Donations (SHARE).
Eurasian Community Fund (ECF).
Skills Development Levy (SDL).
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating the Foreign Worker Levy
The FWL deduction is a levy paid by the employer for all foreign workers. It uses a calculation rule of Amount, where the amount is derived from formula CPF FM FWL CALC. The generation control CPF GC FWL uses formula CPF FM FWL GC to determine if the employee is either a foreign worker, or was a foreign worker and became a permanent resident during the current month. It is set to Include the employee if the formula is true.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating the Mosque Building Mendaki Fund
The Mosque Building Mendaki Fund (MBMF) deduction must be paid by all Muslim employees who are Singaporeans or permanent residents each month. The deduction uses a calculation rule of Amount, where the amount is derived from formula CPF FM MBMF CALC. The MBMF deduction is determined by the employees wages for the month. Generation control CPF GC MBMF, using formula CPF FM MBMF CALC calculates MBMF using bracket CPF BR MBMF. Since this is a monthly contribution, the formula looks up the bracket and subtracts any MTD amount.
The MBMF calculates the payments of the Mosque Building Fund (MBF) and the Yayasan Mendaki Fund (YMF) separately.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating the Singapore Indian Development Association
The Singapore Indian Development Association (SINDA) deduction must be paid by all Indian employees (except foreign workers) each month. The deduction uses a calculation rule of Amount, where the amount is derived from formula CPF FM SINDA CALC. The SINDA deduction is determined by the employees wages for the month. Generation control CPF GC SINDA, using formula CPF FM SINDA CALC calculates SINDA using bracket CPF BR SINDA. Because this is a monthly contribution, the formula looks up the bracket and subtracts any MTD amount.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating the Chinese Development Assistance Council
The Chinese Development Assistance Council (CDAC) deductions are made by all working Chinese Singaporeans and permanent residents. The deduction uses a calculation rule of Amount, where the amount is derived from formula CPF FM CDAC CALC. The CDAC deduction is determined by the employees wages for the month. The generation control CPF GC CDAC, using formula CPF FM CDAC CALC calculates CDAC using bracket CPF BR CDAC. Since this is a monthly contribution, the formula looks up the bracket and subtracts any MTD amount.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating the Share Programme Donations
The Share Programme Donations (CPF) Board collects SHARE Programme donations on behalf of the Community Chest, National Council of Social Service. The SHARE deduction uses a calculation rule of Amount. SHARE contributions are voluntary and deducted from the employees' wages. The amount of any contribution is entirely at the employee's discretion and is entered at the payee level. The deduction subtracts from the SGP NET net pay accumulator.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Eurasian Community Fund
The Eurasian Community Fund (ECF) deduction is used for all working Eurasian Singapore citizens and permanent residents so that they may contribute to the Eurasian Community Fund. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ECF CALC. Contributions vary based on the monthly income of the employee.
ECF contributions are mandatory for all Eurasian employees (Singapore Citizens and Permanent Residents). The employees ethnic category and citizenship status are returned from the personal data array CPF AR PERS DATA. The generation control CPF GC ECF uses them to determine whether ECF is applicable. If the employee's ethnic category is Eurasian, and their citizenship status is Citizen or Permanent Resident, the deduction is made.
Formula CPF FM ECF CALC uses bracket CPF BR ECF. Since this is a monthly contribution, the formula looks up the bracket and subtracts any MTD amount.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating the Skills Development Levy
The Skills Development Levy (SDL) deduction is a levy on the employer charged for all employees who earn less than 2000 SGD (effective 1st September 2005) in a month. The rate of contribution is 1% of the employees earnings, or at least 2 SGD. The deduction uses a calculation rule of Amount, where the amount is derived from formula CPF FM SDL CALC. The limit (2000), rate (1%) and minimum amount (2) are stored in PeopleSoft maintained variables.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Working with Regulatory Regions
Calculating Normal CPF Deductions
CPF contributions must be paid for all employees who are Singapore Citizens or Permanent Residents (PR). Contributions are made by employees and by employers. For reporting purposes, it is necessary to record the CPF paid on ordinary wages and additional wages separately. There are therefore four normal CPF deductions:
CPF ORD EE — Employee Ordinary CPF.
CPF ADD EE — Employee Additional CPF.
CPF ORD ER — Employer Ordinary CPF.
CPF ADD ER — Employer Additional CPF.
These deductions will apply to most of the workforce, so the deduction assignments are by eligibility group. A generation control CPF GC NORMAL which uses formula CPF FM NORMAL GC is attached to all of the deductions to include Singapore Citizens and Permanent Residents and to determine whether the payee is eligible for CPF contribution. (Only Singaporean citizens and permanent resident are eligible). For the rare exceptions, payee level overrides are allowed.)
Since the calculation of the four parts of the CPF contributions are related, a single pre-processing formula CPF FM CALCULATION, also attached to all the deductions, calculates the amounts. The formula is only required once, but is attached to all CPF deductions in case there are overrides.
Calculating Employee Ordinary CPF
The CPF ORD EE deduction is used for employee ordinary CPF contributions. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ORD PAYEE.
Calculating Employee Additional CPF
The CPF ADD EE deduction is used for the employee's (payee's) share of contributions made for Additional Wages. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ADD PAYEE.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Employer Ordinary CPF
The CPF ORD ER deduction is used for the employer's share of contributions made for ordinary wages. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ORD ER.
Calculating Employer Additional CPF
The CPF ADD ER deduction is used for the employer's share of contributions made for Additional Wages. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ADD ER.
Calculating Voluntary CPF Deductions
Voluntary CPF deductions are set up without pre processing formula. They use an amount element for EE and ER deductions using formulas for each calculation. CPF FM VOL PAYEE and CPF FM VOL ER formula, there is a post processing formula for each calculation CPF FM VOL EMPY and EE CPF FM VOL EMPYER. However, as eligibility will be by individual assignments, they have no generation control.
There are two voluntary CPF deductions:
CPF VOL ER — Employer Voluntary CPF.
CPF VOL EE — Employee Voluntary CPF.
Calculating Employer Voluntary CPF
The CPF VOL ER deduction is used for Voluntary CPF contributions made by the employer. The deduction uses an Amount calculation rule, where the amount is calculated through a formula CPF FM VOL ER.
Calculating Employee Voluntary CPF
The CPF VOL EE deduction is used for Voluntary CPF contributions made by the employee. The deduction uses an Amount calculation rule, where the amount is calculated through a formula CPF FM VOL PAYEE.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Additional CPF Deductions
With the final pay for each year, the limit on additional CPF needs to be recalculated based on actual wages for the year. If the limit is higher than that of the previous year, extra CPF contributions may need to be made. If the limit is lower, some contributions may need to be reclaimed from the CPF Board. This reconciliation needs to be carried out in December for all employees who received additional wages during the year. It also needs to be done in the final pay for employees who are terminating.
Two deductions are used for the adjustment— One for the employer's share and one for the employee's (payee's) share.
CPF ADD ER — Employer Additional CPF.
CPF ADD EE — Employee Additional CPF.
The generation control CPF GC NORMAL, using the formula CPF FM NORM GC, determines whether the payee is eligible for CPF adjustment. The pre-processing formula CPF FM CALCULATION calculates the normal CPF to be contributed by the employer as well as the payee (employee).
Calculating Employer Additional CPF
The deduction CPF ADD ER is used for the employer's share of contributions made for additional wages. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ADD ER.
Calculating Employee Additional CPF
The deduction CPF ADD EE is used for the employee's (payee's) share of contributions made for additional wages. The deduction uses an Amount calculation rule, where the amount is derived from formula CPF FM ADD PAYEE.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Adjustment CPF Deductions
If the employee's current year additional wages exceeded the old limit and the old limit was less than the new limit, additional CPF needs to be calculated.
Two deductions are used for the adjustment—one for the year-end adjustment to employer's share and one to employee's share of additional wages contributions:
CPF ADJ ER — Employer CPF Adjustment.
CPF ADJ EE — Employee CPF Adjustment.
Generation control CPF GC ADD ADJUST, using formula CPF FM ADD ADJ GC, determines whether the payee is eligible for CPF adjustment. Pre-processing formula CPF FM ADD ADJUST calculates the additional CPF adjustment for the current year.
Calculating Employer CPF Adjustment
The deduction CPF ADJ ER is used for the year-end adjustment to employer's share of additional wages contributions. The deduction uses an Amount calculation rule, where the amount is derived from variable CPF VR EMPLR ADJ.
Calculating Employee CPF Adjustment
The deduction CPF ADJ EE is used for the year-end adjustment to payee's share of additional wages contributions. The deduction uses an Amount calculation rule , where the amount is derived from variable CPF VR PAYEE ADJ.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Calculating Festive Advance Payback Deductions
Global Payroll enables you to pay festive advances through the Global Payroll system. However, as the payments are advances, they must then be recovered through deductions in the payroll system in subsequent pay periods. Separate customary deductions corresponding to each of the festive advance types and their supporting elements enable you to deduct festive advance amounts in subsequent pays. This enables you to recover the entire outstanding festive advance payments when an employee terminates.
You specify the deduction elements to be used for the recovery of the festive advances on the Festive Advance Pay Program page in Human Resources. To ensure you select appropriate deductions on this page, the system enables you to select only deductions with a category of FA (Festive Advance). All the elements created use this category. Separate deductions are provided for recovering advances for each of the festive advance types and they are all set up identically.
The deduction elements all use a calculation rule of Base × Percent where the Base is derived from accumulator FAD AC ADV AMT and the percent is 100.
The following festive advance deductions enable you to recover festive advance payments (subtract from the FAD AC ADV AMT accumulator):
CNY PBK — Chinese New Year Payback.
DEEPAVALI PB — Deepavali Advance Payback.
XMAS PBK — Christmas Advance Payback.
HARI RAYA PB — Hari Raya Advance Payback.
See Also
Defining Earning and Deduction Elements
Understanding Delivered Deduction Elements
Posting Festive Advances to Global Payroll
PeopleSoft Enterprise Human Resources 9.1 PeopleBook: Administer Festive Advance