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13th Month AWS is subjected to CPF?

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Old 01-01-2021, 01:01 AM
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Default 13th Month AWS is subjected to CPF?

Hi all, asking a noob question.

I just received my December payslip.
I am grossing at 7K.

So monthly, I am taking home 5800.
For Dec I am getting 7K + 7K (AWS) = 14K. I notice my payslip is having 11400 instead of 11600.

My question is 7K AWS subject to Ordinary Wage (OW) Ceiling OR Additional Wage (AW) Ceiling?
If AWS is considered Additional Wage (AW) Ceiling, then the AWS will be reduced by 20%.
If AWS is considered OW, how is calculated?

many thanks

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Old 01-01-2021, 01:51 AM
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Quote:
Originally Posted by tpj2000 View Post
Hi all, asking a noob question.

I just received my December payslip.
I am grossing at 7K.

So monthly, I am taking home 5800.
For Dec I am getting 7K + 7K (AWS) = 14K. I notice my payslip is having 11400 instead of 11600.

My question is 7K AWS subject to Ordinary Wage (OW) Ceiling OR Additional Wage (AW) Ceiling?
If AWS is considered Additional Wage (AW) Ceiling, then the AWS will be reduced by 20%.
If AWS is considered OW, how is calculated?

many thanks
Your 13th month will be aw

Essentially ow max is 6k per month.
Aw max is 30k per annum
Aw cap is counted per annum basis

Now your dec pay is 6k ow + 7k bonus

Your ow is cap at 6k for dec.
But your 7k bonus will fully attracts cpf coz it is considered additional wage unless you hit the 30k bonus limit per year.
Your employer will also be forced to pay the employer contribution of 17% of the 7k.

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Old 01-01-2021, 01:54 AM
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Your 13th month will be aw

Essentially ow max is 6k per month.
Aw max is 30k per annum
Aw cap is counted per annum basis

Now your dec pay is 6k ow + 7k bonus

Your ow is cap at 6k for dec.
But your 7k bonus will fully attracts cpf coz it is considered additional wage unless you hit the 30k bonus limit per year.
Your employer will also be forced to pay the employer contribution of 17% of the 7k.
youve said a lot but never answer why discrepancy of 200

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Old 01-01-2021, 02:02 AM
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11400 is correct

After cpf, your bonus is
7k*0.8=5.6k

Plus your usual 5.8k
So 5.6k + 5.8k=11.4k


The 200 apparent loss in cash is good for you
Coz you got 200more in cpf and your employer lan lan must pay that 17% or $34
So end up your cpf got $234

Further more cpf has tax relief. So you end up paying lesser income tax than if you are paid that $200 in cash


Case study

Consider tom,
Tom pay is 8500 per month with zero bonus. Making a total of 102000
So each month his cpf
Is 6000 ow cap * 0.2 = 1200
His take home pay = 8500-1200= 7300
So one year 7300*12 =87,600 in cash


Consider mary
Mary pay is 6000 per month with 30k bonus, making a total of 102000
Mary take home pay 102000*0.8=81,600


So u can see 6k cash difference. But cpf is worth it coz employer kenna forced pay their 17%
You avoid tax
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Old 01-01-2021, 02:08 AM
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youve said a lot but never answer why discrepancy of 200
Can understand?
All your bonus go to the additional wage as long as your bonus dont hit 30k
Can count or nottttt...

Nowadays youngster quite cmi
Lack basic arithmetic skills
No wonder all kenna scammed
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Old 01-01-2021, 02:13 AM
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Quote:
Originally Posted by Unregistered View Post
youve said a lot but never answer why discrepancy of 200
Your original qn nv ask why there is a discrepancy of $200
You asked is your bonus considered additional wage and how is it calculated.

So i already answered

Anyway i also already answered your $200 discrepancy in the previous reply

U sure your pay 7k?
Coz 7k usually can count.


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Old 01-01-2021, 09:43 AM
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Thank you for the details - it is as per suspected. (btw I just saw this; I am the real TS)

Quote:
Originally Posted by Unregistered View Post
Your 13th month will be aw

Essentially ow max is 6k per month.
Aw max is 30k per annum
Aw cap is counted per annum basis

Now your dec pay is 6k ow + 7k bonus

Your ow is cap at 6k for dec.
But your 7k bonus will fully attracts cpf coz it is considered additional wage unless you hit the 30k bonus limit per year.
Your employer will also be forced to pay the employer contribution of 17% of the 7k.
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Old 01-01-2021, 11:05 AM
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Just ask additional question: the CDAC $3 per month is the same for December right, even with AWS, it is $3 right?
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Old 01-01-2021, 04:52 PM
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Quote:
Originally Posted by tpj2000 View Post
Just ask additional question: the CDAC $3 per month is the same for December right, even with AWS, it is $3 right?
CDAC depends on the gross wages of the month.
Refer to this: https://www.cdac.org.sg/contributor-information/

Gross wages for the month includes AWS or any other bonuses or one-off payment.
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