CPF on Bonus in Singapore: Working Out the Additional Wage Ceiling for December 2026 Payroll

Short answer: Year-end bonuses and the 13th month AWS are Additional Wages. CPF is payable on them only up to the Additional Wage ceiling, which for 2026 is S$102,000 minus the employee’s Ordinary Wages subject to CPF for the year. With the Ordinary Wage ceiling at S$8,000 a month, the ceiling can be as low as S$6,000.

Working out CPF on bonus in Singapore is where most December payroll errors happen, because a 13th month payment or performance bonus is tested against an annual cap that depends on everything the employee earned with you during the year. This guide explains the 2026 rules published by the CPF Board, works through three checked examples, and covers the December true-up and the 1 January 2027 rate changes.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

What is the difference between Ordinary Wages and Additional Wages?

Ordinary Wages are pay for work done in a given month that is payable by the 14th of the following month. Additional Wages are all other wages, such as an annual bonus. CPF contributions are worked out on Total Wages (OW plus AW) for each calendar month, and each type has its own ceiling.

Under section 2 of the Central Provident Fund Act 1953, “wages” means remuneration in money, including any bonus, due or granted to a person in respect of their employment. CPF contributions are payable for employees who are Singapore Citizens or Singapore Permanent Residents (SPRs). They are not payable for foreigners on work passes.

The CPF Board’s guidance on what counts as wages sets out the classification:

For a refresher on which other payments attract CPF, see our note on payments that attract CPF contributions.

Are the AWS and performance bonuses subject to CPF?

Yes. The CPF Board’s list of allowances and payments marks the annual wage supplement or bonus, paid to employees at the end of the financial year, as attracting CPF. Because these payments are not pay for a single month’s work, they are classed as Additional Wages.

The same applies to the 13th month AWS and to a discretionary year-end performance bonus. All of them share one annual AW ceiling per employer, and every AW payment during the year, including a mid-year bonus, uses up part of it.

How do you calculate the Additional Wage ceiling for 2026?

The CPF Board’s formula is: AW ceiling = S$102,000 minus the total Ordinary Wages subject to CPF for the year. Because OW subject to CPF is capped at S$8,000 a month, the lowest possible ceiling for a full year is S$102,000 minus S$96,000, which is S$6,000.

The CPF Board’s published examples follow a two-step method:

1. At every AW payment, estimate the AW ceiling using the employee’s expected OW for the whole year. Pay CPF on the AW up to the remaining ceiling.
2. In December, or in the employee’s last month of employment if earlier, recalculate the ceiling using the OW actually paid. Pay any shortfall with that month’s contributions, or apply online for a refund of any excess.

Three points catch employers out:

• The ceiling is per employer. A new hire’s OW from a previous employer does not reduce the ceiling with you.
• OW above S$8,000 a month does not count. Only OW subject to CPF goes into the formula.
• An increment during the year lowers the ceiling; a pay cut raises it.

The CPF Board’s Additional Wage Ceiling Calculator is a useful cross-check.

What does CPF on bonus in Singapore look like in practice? Three worked examples

The examples assume Singapore Citizens or SPRs from the third year onwards, aged 55 and below (17% employer, 20% employee). Following the CPF Board’s rounding rules, the total is rounded to the nearest dollar, the employee’s share is rounded down, and the employer pays the difference.

Example 1: salary of S$5,000, well under the ceiling

Aisha earns S$5,000 a month from January to December 2026. In December she receives a one-month AWS of S$5,000 and a performance bonus of S$10,000, a total of S$15,000 of AW.

• OW subject to CPF for 2026: S$5,000 x 12 = S$60,000.
• AW ceiling: S$102,000 minus S$60,000 = S$42,000.
• The full S$15,000 is within the ceiling, so all of it attracts CPF.
• December total (S$5,000 OW plus S$15,000 AW): S$7,400, of which the employee pays S$4,000 and the employer pays S$3,400.

Example 2: salary of S$7,500 with a mid-year bonus, hitting the ceiling

Ben earns S$7,500 a month all year. He received a S$4,000 mid-year bonus in June 2026. In December he receives a S$7,500 AWS and a S$15,000 performance bonus, a total of S$22,500.

• OW subject to CPF: S$7,500 x 12 = S$90,000.
• AW ceiling: S$102,000 minus S$90,000 = S$12,000.
• June bonus: S$4,000 subject to CPF, leaving S$8,000 of the ceiling.
• December: only S$8,000 of the S$22,500 attracts CPF. The remaining S$14,500 does not.
• December total (S$7,500 OW plus S$8,000 AW): S$5,735, of which the employee pays S$3,100 and the employer pays S$2,635.

Charging CPF on the full S$22,500 would create an excess that must be refunded.

Example 3: mid-year joiner earning S$10,000

Chen joins on 1 August 2026 at S$10,000 a month. His contract gives a pro-rated AWS, which is S$10,000 x 5/12 = S$4,166.67. He also receives a S$5,000 bonus, both paid in December.

• OW subject to CPF with this employer: S$8,000 x 5 months = S$40,000. His salary above S$8,000 is ignored.
• AW ceiling: S$102,000 minus S$40,000 = S$62,000. His OW at his previous employer is not counted.
• December total (S$8,000 OW plus S$9,166.67 AW): S$6,352, of which the employee pays S$3,433 and the employer pays S$2,919. Of this, S$2,960 relates to the OW.

The Example 2 row adds CPF on the June bonus (S$680 employer and S$800 employee) to CPF on the December AW (S$1,360 employer and S$1,600 employee).

How does the December true-up work, and what if you overpaid?

In December, recompute the AW ceiling using the OW actually paid during the year and compare it with the AW you have already subjected to CPF. Pay any shortfall with the December contributions. Apply for a refund of any excess.

In one CPF Board example, an employee on S$4,500 a month had an estimated ceiling of S$48,000, but after a raise to S$8,000 from April the recalculated ceiling fell to S$16,500.

On refunds, the CPF Board’s refund guidance says:

• There is a specific refund type for “payments made in excess of Additional Wage ceiling”, and employers should apply promptly once the excess is found.
• You must tell the affected employee before applying, and repay the employee’s share to the employee directly.
• Refunds are made from the funds available in the employee’s CPF accounts.

Underpayments are worse: section 9 of the CPF Act provides for interest on contributions in arrears.

What changes on 1 January 2027, and does it affect bonuses paid in January?

CPF contribution rates rise from 1 January 2027 for employees aged above 55 to 65. Rates for employees aged 55 and below stay at 37%, so for most staff a bonus paid in January 2027 costs the same percentage as one paid in December 2026.

Source: the CPF Board’s FAQ on the 1 January 2027 changes.

Two timing points matter if a bonus may be paid in January:

1. Which year’s ceiling applies. The CPF Board states that the applicable AW ceiling depends on when the AW is due and payable. A 2026 bonus that is due and payable in January 2027 is tested against the 2027 ceiling, which will be reduced by the employee’s 2027 OW.
2. Which year’s rate applies. The CPF Board says the new rates apply to “wages earned from 1 January 2027”. Its AW ceiling examples apply the rate in force in the month the AW is paid. For a senior employee, confirm the treatment of a 2026 bonus paid in January 2027 with the CPF Board before running payroll. As an illustration only, on a S$10,000 bonus for an employee aged above 55 to 60, the employer’s share is S$1,600 at the 2026 rate and S$1,650 at the 2027 rate.

Our guide to senior worker CPF contribution rates covers the age bands in more detail.

What should employers check before running December 2026 payroll?

Confirm each employee’s year-to-date OW subject to CPF, the AW already paid this year, and the classification of every year-end payment.

1. Pull a year-to-date report of OW subject to CPF (capped at S$8,000 a month) for each Singapore Citizen and SPR.
2. List every AW payment already made in 2026, including mid-year bonuses.
3. Compute the remaining ceiling and pay CPF only on AW within it.
4. Check age-band changes. New rates apply from the first day of the month after an employee’s 55th, 60th, 65th or 70th birthday.
5. Check first-year and second-year SPRs, who are on graduated rates unless a joint application for full rates has been approved.
6. For leavers, recompute the ceiling in the last month of employment, as the CPF Board’s examples require.
7. Book the bonus accrual and the employer CPF on it in the accounts, and make sure the same figures go into the IR8A for 2026.

Related reading: our Singapore payroll and CPF guide for employers, FRS 19 bonus accruals and IR8A and the Auto-Inclusion Scheme. To keep track of the filing dates that follow year-end payroll, try our free compliance tools.

Frequently asked questions

Is CPF payable on a bonus for foreign employees on an Employment Pass or S Pass?

No. CPF contributions apply to Singapore Citizens and Singapore Permanent Residents. Employers do not pay CPF for foreign employees on work passes. For work pass matters, our associated agency Little Big Employment Agency can help.

Does the AW ceiling reset if an employee changes jobs mid-year?

Yes, in effect. The ceiling is worked out per employee, per employer, per calendar year, so each employer computes it using only the OW it paid.

What happens to CPF paid in error on a bonus above the ceiling?

Mandatory CPF stops at the ceiling. Contributions paid above the ceiling should be refunded through the CPF Board’s excess AW refund application, not left in the account.

What if the employee earns S$8,000 or more every month?

Their OW subject to CPF for a full year is S$96,000, so the 2026 AW ceiling is S$6,000. Only the first S$6,000 of all their 2026 bonuses attracts CPF.

How much does RCS charge for payroll?

Our published payroll fees start from S$150 a month for fixed monthly salaries and from S$200 a month for variable salaries, covering the first five active employees. See our packages page for full pricing.

Last reviewed: 11 October 2026. The Editorial Team, Raffles Corporate Services.