Using CPF Calculation Fundamentals

All payments to employees are classified as either ordinary wages, additional wages or NP (non-pensionable) wages (for the public sector) and the following segment accumulators are provided for these:

• CPF ORD WAGES SEG — Accumulates the ordinary wages in the segment.

• CPF ADD WAGES SEG — Accumulates the additional wages in the segment.

• CPF NP WAGES SEG — Accumulates the non-pensionable wages in the segment.

All earnings for Singapore add to either the ordinary wages or the additional wages accumulator. Non-pensionable wages (NPVP and NPC) are a sub-set of ordinary wages and the NVP/NPC accumulators also add to the ordinary wages earnings elements and to the ordinary wages and NP wages accumulators.

As the NP (non-pensionable) wages is really a sub-set of ordinary wages, the element member list for the ordinary wages accumulator includes the NP wages accumulator.

All accumulators are keyed by EmplID, with user keys of variable CPF VR EMPLR REF (employer CPF Reference Number) and variable IRS VR BAL GRP and you should ensure that all earnings add to the appropriate accumulators. The month-to-date accumulators are based on calendar years—The financial year for Singapore is the same as the calendar year, so calendar accumulators are used. You can use the fiscal accumulators if required for your financial year.

Year-to-date accumulators are also used for ordinary wages and additional wages for use in calculating additional CPF limits. You can access these accumulators for both the current year and the previous year, so they must be maintained for 12 months after their end date, and based on a specified date. The specified date is a variable CPF VR ACC REF DT (CPF accumulator reference date) which must be initialized to the period end date. The variable stores the reference date by the month-to-date and year-to-date ordinary wages and month-to-date and year-to-date additional wages accumulators.

The decision as to whether or not employees should be enrolled in specific benefit plans for CPF is based on the employee's citizenship status, ethnic group and religion. Generation control elements in Global Payroll automatically determine the deductions applicable to each employee. In all cases, there are also rare instances where employees can apply to the various bodies to either contribute at a different rate or stop altogether. These cases are handled by manual payee deduction overrides.

The table below indicates when the various CPF deductions are calculated using generation control elements.

The CPF contribution rates required for CPF calculations are specified by CPF legislation and are PeopleSoft maintained. The data is accessed via the CPF AR RATES array, using formula CPF FM RATE LOOKUP, which retrieves the appropriate calculation rates (appropriate row in the array) for each employee.

To find the correct row in the CPF AR RATES array for the current employee (payee), formula CPF FM RATE LOOKUP determines the sector, the gradual CPF status, the employee's age and total wages for the month. These are determined using the following elements, as referenced in the CPF FM RATE LOOKUP formula:

• Formula CPF FM GRADUAL YR returns a value indicating whether gradual CPF rates should be applied for the payee. The formula returns the number of years in which the payee becomes the permanent resident (PR). The value is used to indicate whether gradual CPF rates should be applied for the payee. Variable CPF VR PR GRADUAL enables you to select which set of rates will be used for Permanent Residents. If set to blank, Full CPF rates will be used for PR's in the first 2 years.  If set to 'P', Full Employer CPF and Gradual Employee CPF rates will be used for the first 2 years. The formula that determines the number of years of PR (CPF FM GRADUAL YR) takes this variable into consideration. You can set/override the value of the variable on the Pay Entity, Pay Group and/or Payee Element Overrides pages.

• If the employee status is not permanent resident, the formula doesn't resolve. However, if the employee is a permanent resident, the formula finds the number of complete years, using duration CPF DR PAYEE AGE, between the first day of the month following the permanent residency date and the first of the current month (based on the month from the period end date). While CPF originally starts from the actual permanent residency date, the second and third year rates are not accessed until the beginning of the month following the anniversary.

• Duration CPF DR PAYEE AGE retrieves the correct CPF rates for a payee, their age as at the first day of the current month is needed. (From birth date to first day of current month, using the month from the period end date.

  Note: You can override the formula at payee level. Employees may elect to pay the full CPF from the beginning and not have gradual CPF applied. To do this, you can enter an override to this formula, by setting the value to 'F', on the Payee Supporting Element Overrides page.

Data is retrieved from the database every time the CPF AR RATES is resolved. This is useful for retrospective Pay Rate Changes as the new rates (as of the new calendar) will have to be used. For example, if there is a change in CPF rates (October 1, 2007), and there is a retrospective Pay Rate Change (effective 1 September 2007), the CPF calculation for October pay calendar must use the new rates effective 1 October 2007.

All of the CPF contribution rates are specified as monthly amounts and must be reported and paid to the CPF Board monthly, regardless of the pay frequency. To accommodate this, all of the calculations are based on month-to-date (MTD) amounts. In each case, they are calculated using the employees MTD wages and at the end, any existing MTD contributions already calculated are subtracted. Our rules are designed to have the deductions calculated in every pay. Wages are attributed only to a single month (determined by the period end date) and are not pro rated. For example, if you want to have some deductions calculated in the last pay of the month, you will need to create your own generation control elements to do that.

CPF is only calculated on payments that are in Singapore Dollars (SGD).

A conditional formula, CPF FM CUR SGD is attached to the CPF section in the process list to prevent it from being processed for any currency other than Singapore dollars. This means that CPF reports also only report on Singapore Dollar payments. Any payments made in other currencies are ignored by the reports.

CPF is calculated for ordinary earnings based on the period in which it was earned. However, for additional earnings, CPF is calculated based on the period in which it is paid. Since the retro method for Singapore is Forwarding, the ordinary CPF deductions are also specified as Forwarded in the Retro Process definition. This means that where retro is concerned, ordinary CPF is re-calculated for the original pay period, and the difference forwarded to the current pay.

To ensure CPF is not also calculated on the retro earnings in the current period, all ordinary earnings are forwarded to earning codes that are not included in the CPF ordinary wages accumulator. For additional earnings, the CPF deductions from the original period are not forwarded into the current period, so the additional CPF deductions are not included in the retro process definition.

Additional earnings elements are included in the retro process definition, and do not need to be forwarded to a different element. Other deductions such as MBMF, SINDA and CDAC are all forwarded and calculated based on when they were earned.