CPF-Payable Contributions in Singapore: A Guide for Employers

Last updated on September 19, 2022

payment reminder

As an employer in Singapore, you have a legal obligation to make Central Provident Fund (CPF) contributions to your employees’ CPF accounts. Generally, CPF contributions are payable for part-time, casual or temporary employees who are: 

  • Singapore Citizens or Permanent Residents;
  • Engaged under a contract of service; and
  • Earning total wages of more than $50 per month.

However, what most employers may be unaware of is that besides an employee’s salary, there are also other employee payments that are CPF-payable, such as allowances and cash gifts. This article will detail examples of such payments that are CPF-payable, including:

You may also wish to refer to our other article to get a general understanding of CPF contribution rates and more.

What are the Common Types of Employee Payments That are CPF-Payable? 


Allowances are generally any cash payment that increases the salary of an employee and hence forms part of the employee’s salary. Examples of allowances that are CPF-payable include:

  • Meal allowance – Payment to employees for them to use to purchase food. Meal reimbursements given to your employees for working overtime, on the other hand, are not CPF-payable.
  • Festive allowance – “Hongbao” or cash gifts given during festive seasons.
  • Attendance allowance – Payment to employees for good work and attendance.
  • Performance Incentive allowance – Cash given to employees for good performance.
  • Extra duty allowance – Payment to employees for working on public holidays, night duties, or overtime.
  • Maternity allowance – Payment to female employees during confinement (i.e., the postnatal recovery period for mothers). Note that any maternity expenses paid directly to a hospital or clinic, by an employer for the employee, are not CPF-payable. 

Commission and tips

CPF is payable on commission paid to employees. For example, a commission earned by employees for achieving a certain percentage of sales.

Tips are also CPF-payable. This may include tips collected from customers at a restaurant by the employer and distributed to employees as part of their salaries.

Cash gifts

Besides cash gifts given as part of festive allowances, cash given as a wedding gift to employees are also CPF-payable.

Non-cash gifts, on the other hand, are not CPF-payable. These include:

  • Token gifts given to employees as an incentive.
    • E.g. gift vouchers. This is unless the voucher can be redeemed as cash.  
  • Gifts in kind to employees on their marriage or birth of their children.
    • E.g. gift hampers. 

Cash awards

The following forms of cash awards are CPF-payable:

  • Productivity award – Cash awarded in recognition of staff productivity.
  • Sales performance award – Cash awarded to employees for achieving sales targets.
  • Anniversary cash award – Cash awarded to employees on the company’s anniversary.

Long service awards are also CPF-payable, depending on the following scenarios

Long Service Award
Scenario Example Is it CPF-payable?
An employee is awarded cash in recognition of their service for every 2 years of service for up to 5 years of service.  Employee A is given a long service award for the completion of his service every 2 years, such as the 2nd, 4th and 6th year.   Yes, CPF is payable on the cash awarded for the 2nd and 4th year.

However, CPF is not payable on the cash awarded for the 6th year (as this would exceed 5 years).

An employee is awarded cash in recognition of every 5-year period of service. Employee B is given a long service award for the completion of his service every 5 years, such as the 5th, 10th and 15th year.   Yes, if the cash award exceeds employee B’s salary for the month in which it is given. CPF is then payable on the amount in excess of the salary.

You may refer to this CPF webpage for a list of other cash awards that are CPF-payable. 

Note that cash awards are not CPF-payable if they do not relate to the employee’s employment. For example, a patent award given to an employee for winning a design competition is not CPF-payable if the competition is not related to his employment.


Bonuses, i.e. a sum of money paid to employees at the end of the year in addition to their salary, are CPF-payable. This can include the following types of bonuses

  • 13th-month bonus – An additional salary that is equivalent to the employee’s one-month salary. This is also known as the “Annual Wage Supplement”.
  • Retention – A lump sum of money paid in exchange for an existing employee to remain in the company.
  • Sign-on bonus – A financial incentive paid to a new employee for committing to an employment contract. 
  • Discretionary bonuses – A financial reward paid to an employee at the employer’s discretion. 
  • Third-party bonuses – Bonuses paid to employees by the employer company’s service partner. E.g. a Service Partner Company A may give bonuses to employees of Company B for helping them increase their sales. Here, Company A will have to pay CPF contributions on the bonuses.
  • Referral bonus (or referral fees) – A sum of money paid to employees for successfully recommending new employees to join the employer’s company. Note that referral bonuses or fees are not CPF-payable if such recommendation was not part of the employee’s job, i.e. the employee made such recommendation of their own accord. 

On the other hand, CPF contributions are not required on any type of bonuses paid to employees posted overseas. This is even if the bonus had been granted to the employee prior to his/her overseas posting.

However, should the employee who had been posted overseas later terminates his/her contract with you and starts a new employment contract with an overseas employer, then any type of outstanding bonuses to be paid by you to the employee will be CPF-payable.

National Service (NS) make-up pay

Make-up pay given to NS men employees, during their NS training, by the following government agencies is CPF-payable:

  • Ministry of Defence (MINDEF)
  • Singapore Civil Defence Force (SCDF)
  • Singapore Police Force (SPF)

Make-up pay refers to the difference between NS men employees’ loss in civilian income and their service pay (i.e. their NS allowance which is dependent on the NS men’s rank and vocation) for the duration of their NS training.

To illustrate, A is an employee who earns a civilian income of $2,100 per month. He has been called for NS training for a period of 7 days in July, during which his service pay is $200. Over these 7 days, A suffered a loss in his civilian income as his training hours overlapped with his working hours. This loss amounts to $500 ($2,100 civilian income x (5 working days / 21 working days in July)).

A, therefore, receives a make-up pay of $300 (loss in civilian income of $500 – service pay of $200). A’s employer will now have to pay CPF contributions (based on prevailing CPF rates) on A’s new total salary amount of $2,400, which is inclusive of the NS make-up pay ($2,100 civilian income + $300 make-up pay).

Share options or stocks

Any cash given to your employees for them to purchase share options or stocks in the company is CPF-payable.

However, CPF contributions are not payable if the employees:

  • Receive or sell the share options or stocks held in their names (e.g. any sale proceeds made from the sale of shares held in the employees’ name would not be CPF-payable as the shares belong to them and not the company)
  • Did not receive any cash payments to purchase the share options or stocks (e.g. they may have been given a discount to purchase the shares instead) 

Expenses and benefits

Any cash given or reimbursement made to your employees for certain forms of expenses and benefits may or may not be CPF-payable depending on the types of expenses

Expenses Are these CPF-payable? When are they not CPF-payable?
Mobile phone expenses Yes Mobile phone expenses incurred for official purposes on behalf of the employer, as well as phone usage charges paid to the service provider are not CPF-payable.
Transport expenses Yes Reimbursement for travel between the home and workplace or to another place of assignment in the line of official duty, as well as for transport expenses obliged to be paid for by the employer, are not CPF-payable.
Note: Generally, any reimbursements made for official purposes (i.e. in the line of work) are not CPF-payable. 
Flexible benefit expenses Are these CPF-payable? When are they not CPF-payable?
Holiday expenses, including any reimbursement for holiday expenses incurred by employees and any holiday benefits incurred by employees’ dependants, e.g. spouse. Yes Not applicable.
Reimbursements of medical and dental treatment expenses incurred by employees, their spouses and/or children (whether in Singapore or overseas). No CPF is not payable if the medical or dental treatment is considered necessary by registered doctors, TCM practitioners, and/or dentist for the treatment or diagnosis of any illness. However, if the employee is seeking such treatment of other own accord or to address aesthetic concerns, then CPF contributions are payable. 


Encashment refers to the process of converting an employee’s unutilised leave or benefits into cash. It is one way employers can allow their employees to consume their leave or benefits as opposed to having their employees forfeit them or take block leaves (i.e. a period of leave that can range from a week to a few months).

Cash paid to your employees for encashment of their leave and/or of flexible benefits is CPF-payable.

This article has provided employers with an overview of payments that are CPF-payable, ranging from allowances to encashment. As mentioned above, employers have a legal obligation to make CPF contributions, failing which they may face certain penalties.

Note that the above lists of examples are non-exhaustive. For a full list of all employee payments that are CPF-payable and non-CPF payable, click here.

If you are still in doubt, please get in touch with an employment lawyer. An employment lawyer can advise you on which payments are CPF-payable given your specific situation, and answer any legal questions you may have on the payment of CPF contributions.

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