When an employee resigns in Singapore, the Additional Wage (AW) CPF ceiling is recalculated based on the number of months worked in the year. This may lead to CPF shortfalls from previous months. The system will automatically compute this shortfall and include it in the employee’s final payroll.
Below is an example showing how CPF is recalculated and how the shortfall is derived and paid in the resignation month.
Scenario Overview
| Detail | Value |
|---|---|
| Employee DOB | 21 January 1969 |
| Age in 2025 | 56 years old |
| Resignation Month | July 2025 |
| Ordinary Wage (OW) | $10,000/month |
| CPF Rates (Age 55–60) | EE: 17%, ER: 15.5%, Total: 32.5% |
AW CPF Ceiling Comparison
| Scenario | Formula | AW Ceiling |
|---|---|---|
| Before Resignation (12 mos) | 102,000 − (7,400 × 12) | 13,200 |
| After Resignation (7 mos) | 102,000 − (7,400 × 7) | 50,200 |
Since the employee resigned in July, the system recalculates CPF based on 7 months of service, resulting in a higher AW ceiling and CPF shortfalls for prior months. These shortfalls are automatically added to the final (July) payroll.
CPF Contribution Table (Jan–Jul 2025)
Based on $10,000 OW/month and actual AW values.
| Month | OW | AW | EE CPF (Original) | ER CPF (Original) | EE CPF (Recalculated) | ER CPF (Recalculated) | EE Shortfall | ER Shortfall |
|---|---|---|---|---|---|---|---|---|
| Jan | 10,000 | 13,400 | 3,502 | 3,193 | 3,536 | 3,224 | 34 | 31 |
| Feb | 10,000 | 0 | 1,258 | 1,147 | 1,258 | 1,147 | 0 | 0 |
| Mar | 10,000 | 15,000 | 1,258 | 1,147 | 3,808 | 3,472 | 2,550 | 2,325 |
| Apr | 10,000 | 0 | 1,258 | 1,147 | 1,258 | 1,147 | 0 | 0 |
| May | 10,000 | 0 | 1,258 | 1,147 | 1,258 | 1,147 | 0 | 0 |
| Jun | 10,000 | 5,000 | 1,258 | 1,147 | 2,108 | 1,922 | 850 | 775 |
| Jul | 10,000 | 9,000 | – | – | 2,788 | 2,542 | – | – |
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