CPF Adjustment

If you make an error when capturing information on SimplePay, CPF might be calculated incorrectly. If you correct the information on the system, SimplePay will take the changes into account when calculating CPF for December, the final month of the tax year.

Example

An employee started working on 1 January, but they were incorrectly marked as CPF Exempt. The payroll administrator discovered and corrected the error on 1 March only and, therefore, CPF was not calculated in January or February. The CPF figure for December will be higher than expected as the system uses the year-to-date figures to calculate December’s CPF. Therefore, it will include an amount for January and February due to the correction of the CPF Exempt status for those months.

In the example above, a change in the employee's information allowed the system to correct the calculation. However, in some cases, it might not be possible to change the information that would result in an automatic correction of the CPF calculation error. In such cases, a CPF adjustment is needed to correct the CPF figures.

Example

A company uses SimplePay to pay both employees and independent contractors. An employee was captured on SimplePay with an appointment date of 1 January. However, they worked as an independent contractor from 1 January — 28 February, and they were then hired as an employee on 1 March. CPF was incorrectly added to their January and February payslips. It will not be possible to change their appointment date as their payslips for January and February have been finalised.

To add the adjustment:

  • Go to the employee’s profile.
  • Click on Add next to Payslip Inputs.
  • Select CPF Adjustment under Other.
  • Enter the amount of the adjustment for both the employee and employer CPF contributions.

Tip

Add the amount as a negative value to reduce the CPF figure for the year, or as a positive to increase it.

  • Click Save.

CPF Adjustment vs CPF at Higher Rates and Voluntary CPF Contributions

  1. CPF Adjustment: This is a once-off item that should be used only to correct the CPF calculation errors resulting from incorrect employee information being captured. Therefore, it should not be used for either of 2. or 3. below.

  2. CPF at Higher Rates: Employers and employees can apply to the CPF Board to contribute CPF for first- and second-year Permanent Residents at the same rate as citizens and other permanent residents. Please refer to this article for more information:

  3. Voluntary CPF Contributions: If you would like to add voluntary CPF contributions to payroll, please contact our Support team to enable this free opt-in feature. Once enabled, the Voluntary CPF Contributions system item will be available after you click Add next to Regular Inputs.

To read more about CPF, visit the following help page: