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Prorate CPF for PR Year 1 (PR1)

Do we need to prorate CPF during the month when an employee just received PR status?

Nicholas avatar
Written by Nicholas
Updated over a week ago

The correct practice is to prorate CPF during the month when employee just received Permanent Resident (PR) status and it is based on the CPF rate for PR year 1 (PR1).
To determine the year of Singapore Permanent Resident (SPR) status for your employee, you can refer to this link here. An example can be found here.

For the relevant CPF rates of a first and second year SPR, you can refer to this link here:

  • You and your employee both contribute at full rates (Table 1 (PDF, 0.2MB))

  • You contribute at full rates while your employee continues to contribute at graduated rates (Tables 4 and 5 (PDF, 0.2MB))

Proration process for a new SPR is automated in Talenox, here's how what you can do if this employee obtains SPR status mid-way through the month:

1) Head to Profiles > Manage my database > Employee Listing > Edit (New SPR's employee profile) > Identification Documents > Immigration Status.

2) Edit the new SPR's status to reflect "Singapore PR" and key in the PR Effective Date.

3) When you process payroll for the month for this new SPR, there'll be 2 rows of Basic Salary due to the automated salary proration feature based on the employee's job details.ย 

NOTE: Each row will correspond to the employee's prorated salary both before and after they have received their SPR status:

  • Before SPR status is received: CPF checkbox is un-ticked since the employee does not have any CPF contributions required.

  • After SPR status is received: CPF checkbox is ticked since employe now has CPF contributions calculated as of the date of SPR status approval (even if this is halfway through a payroll month).

4) You can now process payroll as per normal until you reach the Month Total page in Talenox (fully processed payroll batch).

Happy processing!

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