AW ceiling options definition and how it works

There are 3 AW ceiling options on the system that you can choose from. To see these options, please follow the steps below as well as the explanation for each:

 

Step 1: Log in to the account

Step 2: Click on mceclip0.png

Step 3: Go to mceclip1.png

Step 4: At the mceclip2.pngtab, look for the mceclip3.pngsub-tab.

Step 5: Scroll down and look for this portion:

mceclip4.png

  • 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, the system will base the computation on last year’s total OW.  If there’s any CPF over/underpayment, the system will re-compute and adjust the amount when the staff resigns or at the end of the year.

Example:

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’s any CPF underpayment, the system will re-compute and adjust the amount when the staff resigns or at the end of the year. The sample computation that the system will get is ($102000 - $72000 = $30000, the limit will be $30000, however, if the AW of 102000 and OW of 72000 will not be reached by the end of the year, the system will recalculate it on December and will know whether there’ll be an additional AW or not.

  • Average OW subject-to-CPF in the year * 12

Once you select this option, 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:

https://www.cpf.gov.sg/Assets/employers/Documents/ExamplesonAdditionalWageCeilingComputation.pdf  

 

 

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