If you have two or more payroll run with the "same month" need to check your contribution on both payroll run.

Here's the given scenario:

  1. Given a scenario where an employee is given salary twice a month and the total income exceeds the CPF deductible cap of $6,000:

First Payroll

  • Basic Salary: $4000

  • CPF Contribution: 20% of $4000 = $800

The basic salary the employee receives is $4000, and given that CPF is contributed on the first payroll. The CPF contribution would be $800. Moving on to the second payroll,

Second Payroll

  • Commission under Additional Wages: $4000

At this moment, do not calculate the CPF contribution for the commission under Additional wages, but rather, we should combine the total earnings for the employee in this month. This is because there is a cap amount of $6000 that is applicable for CPF deduction. Since basic salary + commission = $8000 which is more than $6000, we would only need to deduct CPF based on the $2000 ($6k-$4k from first payroll) received on the second payroll. Based on this total month earnings, let us now calculate the total amount of CPF to be contributed by this employee. 20% of $6000 = $1200. Since some CPF was already contributed during the first payroll, the remaining of the CPF to be contributed during the second payroll would be $1200 - $800= $400

Second Payroll

  • Commission under Additional Wages: $800

  • CPF contribution: $400

Therefore, the CPF contribution for the second payroll should be $400 instead of $800.

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