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What are CPF Ordinary Wages & Additional Wages?
What are CPF Ordinary Wages & Additional Wages?
Ordinary Wage (OW) and Additional Wage (AW) definitions. Pay items classification in Talenox Payroll.
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Written by Nicholas. Updated over a week ago

Ordinary Wages

  • Wages that are due or granted to an employee (wholly and exclusively) with respect to that employee's employment for the month.

  • Wages that are payable before the due date for payment of CPF contributions for that month. (14th of every month).

  • Examples of this would be Monthly Basic Salary and Fixed Allowances.

The amount of Ordinary Wages that attract CPF contributions each month is capped at $6,000.

Additional Wages

  • Wages not granted wholly and exclusively for the month - made at intervals of more than a month.

  • Examples of AW would be Annual Bonus, Leave Pay, Commissions.

The amount of CPF contributions payable on AW is capped at $102,000 minus the total ordinary wages subject to CPF for the year. (Additional Wage Ceiling)

This Additional Wage ceiling is applied anew for each new employer in a year.

In Talenox, the pay items chosen and keyed into payroll are automatically categorised into Ordinary and Additional Wages accordingly. Generally, these are the classifications:

Monthly Payment/Deduction tab pay items

  • All pay items except 2 under this tab are grouped as Ordinary Wage.

  • Only "Bonus" and "Commission (AW)" pay items under this tab are grouped under Additional Wage.

Ad Hoc Payment/Deduction tab pay items

  • Pay items like "Allowance", "Deduction", "Housing/Rental Allowance", "Meal Allowance" and "Tips" are all considered Ordinary Wage.

  • Every other pay item under this tab are categorised under Additional Wage.

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