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Find out if CPF contributions are payable
 

Which allowances and payments attract CPF contributions

Besides the monthly salary, an employee may receive other types of payments when carrying out his work. Two common types of payments are allowance and reimbursement. An allowance is typically given to the employee for a particular purpose (e.g. grooming) and he does not need to return the unspent amount. On the other hand, a reimbursement is given to pay back money to the employee which he has spent (e.g. actual mobile phone expenses incurred for official purposes). For any reimbursement, it must be an expense incurred while performing official duties and the amounts to be claimed are to be supported by relevant documents e.g. official receipts, claim forms, etc.

Attendance allowance Is CPF payable?
Payment to employees for good work and attendance. YES

Anniversary cash award Is CPF payable?
Payment to employees on company’s anniversary. YES

Annual wage supplement / bonus Is CPF payable?
Payment to employees at the end of the financial year. YES

Commission Is CPF payable?
Payment to employees based on percentage of sales achieved. YES

Cost of living allowance Is CPF payable?
Payment to employees as part of employee’s wages. YES

Dirt allowance Is CPF payable?
Payment to employees for performing field duties. YES

Education allowance Is CPF payable?
Contractual payment for education of employee’s children. YES
Payment to employees for employee’s self-improvement programme. NO

Education / training reimbursement Is CPF payable?
Reimbursement for course and examination fees as part of employee’s training programme. NO

Entertainment expenses Is CPF payable?
Reimbursement for entertaining company’s clients. NO

Extra duty allowance Is CPF payable?
Payment to employees for extra work done; e.g. night duty, overtime, public holiday, acting allowance etc. YES

Festive allowance Is CPF payable?
Cash gift (e.g. hongbao) given to employees during festive season. YES

Flexi-benefit expenses Is CPF payable?
Payments for expenses not necessarily incurred by employer, e.g. employee’s groceries, home renovations. YES
Reimbursement for expenses necessarily incurred for on behalf of the employer, e.g. holiday facilities, professional publications. NO

Finders introduction fees Is CPF payable?
Payment to employees for introducing workers to company. NO

Gifts in kind Is CPF payable?
Award in kind e.g. token gifts. NO

Gratuity Is CPF payable?
Payment to employees for good service while still in employment. YES
Payment to employees upon termination of employment, i.e. compensation in nature. NO

Grooming and hair cut allowance Is CPF payable?
Payment to employees for enhancement of appearance. YES

Handphone and pager expenses Is CPF payable?
Payment of handphone and pager allowances to employees. YES
Payment of handphone and pager charges directly to third party e.g. service provider. NO
Reimbursement for actual handphone and pager expenses incurred for official purposes. NO

Holiday expenses Is CPF payable?
Fixed payment to employees for vacation. YES
Variable sum given as reimbursement for holiday expenses incurred by employees. NO

Housing / rental expenses Is CPF payable?
Payment to employees for housing rent. YES
Payment of rent directly to third party e.g. landlord. NO

Incentive allowance

Is CPF payable?
Cash payment incentive. YES
Incentive in kind e.g. token gifts. NO

Laundry expenses Is CPF payable?
Payment to employees for laundry expenses on personal clothing. YES
Reimbursement for laundry expenses to uniformed employees. NO

Leave pay Is CPF payable?
Payment in lieu of leave. YES

Long service award Is CPF payable?
1.  Cash award given to employees with less than 5 years' service and every subsequent period of less than 5 years' service.
2.  Cash award given to employees with at least 5 years' service and every subsequent period of not less than 5 years' service (i.e. 5, 10, 15 and so on), and the cash award exceeds the employee's Ordinary Wages for the month in which it is given. CPF is payable on the amount in excess of the Ordinary Wages.
YES

Cash award given to employees with at least 5 years' service and every subsequent period of not less than 5 years' service (i.e. 5, 10, 15 and so on), and the cash award does not exceed the employee’s Ordinary Wages for the month in which it is given.

Example:

(a)  The company gives a long service award on the completion of every 5 years’ service. The years in which the long service award attract CPF contributions are as follows:

Long service award 5th year 10th year 15th year 20th year 25th year
CPF payable No* No* No* No* No*

(b)   The company gives a long service award on the completion of every 2 years’ service. The years in which the long service award attract CPF contributions are as follows:

Long service award 2nd year 4th year 6th year 8th year 10th year
CPF payable Yes Yes No* Yes No*

(c)   The company gives a long service award on the completion of every 3 years’ service. The years in which the long service award attract CPF contributions are as follows:

Long service award 3rd year 6th year 9th year 12th year 15th year
CPF payable Yes No* Yes No* No*

NO

Maternity allowance Is CPF payable?
Payment to female employees during confinement and in addition to monthly salaries. YES

Maternity subsidy Is CPF payable?
Reimbursement paid under company's maternity expenses scheme. NO

Meal expenses Is CPF payable?
Monthly lump sum payment for meals to employees. YES
Meal reimbursement for staying beyond working hours, i.e. overtime. NO

National Service (NS) Make-up Pay given by MINDEF/SCDF/SPF for Operationally Ready NSmen on NS Training Is CPF payable?
Make-up pay given by MINDEF/SCDF/SPF for NSmen employees during their NS training period.

Under the Enlistment Act, CPF contributions are payable for Operationally Ready NSmen employees on NS training. The employer has to pay CPF contributions based on the wages given by the employer, together with the make-up pay (i.e. loss in civilian income inclusive of variable wage components like overtime pay and commission) from the MINDEF/SCDF/SPF, as though the employee has not been away from work. The employer has to bear the full employer’s share of CPF contribution but can recover the full employee’s share from the employee’s wages.

Tip: Employers can register for the DIRECT scheme at
NS Portal
. The employer continues to pay the employees as per their normal pay schedule, and MINDEF/SCDF/SPF will reimburse the make-up pay to the employer.
YES

Per diem allowance Is CPF payable?
Daily allowance given as reimbursement for defraying the cost of an overseas (i.e. out of Singapore) assignment. NO

Personal clothing allowance Is CPF payable?
Payment to employees to enhance appearance. YES

Probation period pay Is CPF payable?
Wages for employees on probation. YES

Productivity award Is CPF payable?
Cash award for staff productivity. YES

Sales performance award Is CPF payable?
Payment to employees for attaining sales target. YES

Service charge Is CPF payable?
Collection by hotels/restaurants and distributed as part of wages to employees.  YES

Share option Is CPF payable?
Cash proceeds for the share options given to the employee. YES

Sales proceeds if the shares options have been exercised and the shares are held in the employee’s name.

Payments granted in kind to employees where no cash payments are payable to employees.

NO

Staff welfare benefits Is CPF payable?
Gifts in kind to employees on their marriage or birth of their children. NO

Stand-by duty allowance Is CPF payable?
Payment to employees for stand-by duties. YES

Termination benefits Is CPF payable?
Retirement gratuity, retrenchment pay, ex-gratia payment, salary in lieu of notice, severance pay, compensation for loss of employment. NO
Temporary lay-off benefits.
YES

Tips Is CPF payable?
Cash collected from customers to augment wages of hotel and restaurant employees. YES

Transport expenses Is CPF payable?
Payment to employees for transport subsidies. YES

Reimbursement for travel in the line of official duty.

Reimbursement for travel between home and workplace beyond normal working hours e.g. rest days and public holidays.

Reimbursement for travel from home/office to the place of assignment (not the normal place of work).

Reimbursement for actual transport expenses where the employer is obliged to provide transport for employees and where the transport is not available.

NO

Work Injury Compensation Act Is CPF payable?
Payment to employees for injuries under the Work Injury Compensation Act. NO

 Last Updated on: Wednesday, August 27, 2014 at 5:56 PM
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