The following are 3 frequently asked questions that we often encounter:
How do I calculate the AW Ceiling manually for an employee who joined mid-year?
What happens if the total bonuses paid exceed the AW Ceiling?
How should I handle CPF calculations for employees with fluctuating monthly wages?
If you're on the FREE plan in Talenox, you won't have access to the automated AW Ceiling Report available on the SUITE plan. This means you'll need to manually check the CPF calculation especially in more complex scenarios like:
Employees who resigned mid-year
Employees who joined mid-year
Employees with variable monthly wages (non-fixed OW)
Here’s a simple guide to help you calculate it correctly.
Step-by-Step Guide to Manual CPF Check
1) Identify the Employment Period
Employee Type | OW to Use in CPF Calculation |
New Joiner | Project OW from join month to December |
Resigned | Use actual OW paid from Jan to resignation |
Variable OW | Use actual OW paid YTD or average for projection |
2) Apply the CPF AW Ceiling Formula
AW Ceiling = $102,000 – Total OW subject to CPF
(OW is capped monthly: $6,800 in 2024, $7,400 in 2025)
Examples:
New Joiner (Joined July 2025)
Projected OW = $7,400 × 6 months = $44,400
AW Ceiling = $102,000 – $44,400 = $57,600
Resigned (Left in May 2025)
Actual OW = $7,400 × 5 months = $37,000
AW Ceiling = $102,000 – $37,000 = $65,000
Variable OW
Add up actual OW paid YTD (apply monthly cap if needed)
Subtract from $102,000 to find remaining AW ceiling
3) Add Up All Bonuses (AW) Paid So Far
Compare total AW paid to date (commissions, bonuses, incentives, etc.) against the calculated AW Ceiling.
If total AW ≤ AW Ceiling → Full bonus is CPF-deductible
If total AW > AW Ceiling → CPF applies only to the ceiling. Excess is not CPF-deductible
Which CPF PDF Pages to Refer?
Scenario | CPF PDF Page(s) | What It Shows |
New Joiner | Page 3 | Projected OW from join month to Dec; calculates AW Ceiling |
Resigned Employee | Pages 5–6 | Uses actual OW paid up to resignation month |
Variable Monthly OW | Page 7 onward | Tracks actual OW YTD or variable OW handling with examples |
Notes
If you're using the FREE plan, manual CPF checks are required in special cases.
Use the CPF formula and reference examples above to calculate CPF-deductible AW accurately.
If you’d like to avoid manual checking and gain access to the AW Ceiling Report, consider upgrading to the SUITE plan, which automates all these calculations in Talenox.