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 only be 1 row of Basic Salary. The CPF and SHG will be ticked accordingly.
We will prorate the statutory amount based on the statutory effective date. For example:
Basic Pay: S$2,000
PR Effective date: 20 Sep 2024
Number of working days after PR / Statutory working days: 7 days
Prorated Amount: S$2,000 (Normal proration will only kick in with new joiner or resign in the month)
CPF Ordinary Wage: S$2000 * 7/21 = S$666.67 (subject to contribution)
SHG (CDAC, ECF): S$2000 * 7/21 = S$666.67 (subject to contribution)
SDL payable: S$2000 (SDL won’t be affected by statutory proration)
NOTE: The above CPF contributions, SHG contributions, and SDL contributions reflect the amounts subject to statutory contributions, not the exact amounts to be contributed.
CPF amounts are based on Ordinary Wages (OW) and Additional Wages (AW). It must go through CPF calculations to determine the exact employee and employer contributions. The same applies to SHG and SDL contributions.
What if the employee’s SHG is MBMF or SINDA where they are contributing before statutory effective date?
With the same calculation as above, the SHG contribution will change to:
SHG (MBMF, SINDA) contributed: S$2000
4) You can now process payroll as per normal until you reach the Month Total page in Talenox (fully processed payroll batch).
Happy processing!