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).