The employee may have received bonuses before this month, and initially, the system assumes that he/she will work for the whole year; therefore, the additional wage ceiling was capped at 13,200 (year 2025). When the employee terminates, the system will rebalance and recompute the additional wage ceiling as follows:
Before termination
If a bonus of 50,000 was received in January:
Access EasyPay will only cap at 13, 200 and the employee earns more than 7400 monthly (assuming the employee is under age 55)
13,200 X 20% EE
13,200 X 17% ER
Based on the CPF formula
102,000 - ( Total ordinary wage the employee earns in the year)= Additional Wage Ceiling
102,000 - (6800 X12 months) =20,400
After the termination
When the employee resigns in May, the system rebalances as the employee only worked 5 months.
Example: Resign or terminate in May, system recomputes as 102,000 - (5 months X 7400)= 65,000
The ceiling has increased due to the short work months; therefore, the employee need to contribute CPF for the remaining Additional wage of the prior month into this current month.
The remaining wage from the 50,000 bonus received in January will need to be contributed to CPF as follows before the employee leaves:
36,800 X 20% EE
36,800 X 17% ER