Please refer CPF board's additional wage ceiling reference on how to get the capping. The formula is as follows:
102,000 - (Total Ordinary Wage earned in the year based on the maximum cap)
Year 2025
Assuming the employee earns 8000 monthly and works for the whole year. $7400 is the latest Ordinary Wage cap (please check the CPF Board website for the latest Ordinary Wage cap)
Formula: 102,000 -(7400 X 12 months)
Additional Wage (AW) ceiling for the year is 13,200
If the employee earns a bonus of $50,000 in the year, he only needs to contribute AW CPF of $13,200 in the year; the balance AW does not need to contribute to CPF.
In Access EasyPay, under Payroll module, Modules, CPF Progression, please use Ordinary Wage projection for the MAW method.
In this method, the system will calculate the ceiling automatically, and CPF updates will be applied and change automatically whenever there are changes in the year.
Below is an explanation of the three methods available in the CPF Progression:
No MAW Limit will be used for employees who are not likely to hit the Additional Wage ceiling. Example employees with low income and not likely will have high Additional Wages, such as Bonuses and Commissions. This method will ensure that the system will automatically update to the latest CPF policy when you perform the software updates.
MAW Limit is not recommended as this is a manual calculation, and usually, this option is applicable for employees who need to use past year income as an estimation (irregular income). For employees who have irregular income, the CPF Board suggests using the past year's income as an estimation. CPF updates and policy will not be automated using this option; you will need to change it manually yourself.
Ordinary Wage Projection will be the most preferred to be used for employees who will likely have high Additional Wage (Bonuses, Backpay, and Commissions). This method will ensure that the system will automatically update to the latest CPF policy when you perform the software updates. The system will use the actual income to compute the Additional Wage ceiling and the balance of the months; the system will project using the current basic salary and fixed allowance. This method will ensure that if there is a salary increment or adjustment, the ceiling will be adjusted accordingly. Example as follows:
Current month: April
Current basic salary: $7000
Year-to-date actual Income $28,000 + overtime of the current month $1200
= $29,200
Projection of the balance of the month: $7000 X 8 =$56,000
Additional Wage ceiling for April: 102,000 -(29,200 +56,000) =16,800
Note: Celling will be adjusted monthly based on the actual payout.