There are 3 AW ceiling options in the system that you can choose from. Refer to the steps and learn more of the details below.
Step 1: Log in to the account.
Step 2: Click on .
Step 3: Go to .
Step 4: In the tab, look for the sub-tab.
Step 5: Scroll down and look for this section:
- Use Year-To-Date total OW subject-to-CPF (cap at 6000 per month) or use previous year's total OW if available (System Default)
We recommend using this option if most of your Employees are getting below $6000 OW per month. This will compute the AW accordingly. Please note that if there’s a previous year’s total OW data, the system will base the computation on last year’s total OW. If there is any CPF over/underpayment, the system will re-compute and adjust the amount when the staff resigns within the year, or at the end of the year.
The employee started January 2018 – The computation for 2019 will be based on 2018’s total OW, while the 2019’s total OW will be for the year 2020.
- Use max total OW projected for the year ($102000 - $72000 = $30000)
This option is recommended if most of your Employees are getting more than $6000 OW per month, as this will avoid the CPF over-contribution. If there is any CPF underpayment, the system will re-compute and adjust the amount when the staff resigns within the year, or at the end of the year.
The initial computation is based on the formula:
Maximum Wage subject to CPF - Total OW = AW Ceiling
$102000 - $72000 = $30000
AW ceiling in this case is 30k, given that the total OW(6000 * 12) is hit. However, if total OW has not reached 72k by the end of the year, the system will do a recalculation of the new AW ceiling on the December payrun.
- Average OW subject-to-CPF in the year * 12
The system will help you compute the AW ceiling more approximately. The computation will be the Year-to-date total Average OW subject to CPF.
*For more examples and further explanation on how these options work, you can check the link below: