A bonus does not always attract CPF in full. First establish the Ordinary Wages already subject to CPF for the year; only then can the remaining Additional Wage ceiling be known.
Why might only part of a bonus attract CPF?
For 2026, the general formula is AW ceiling = SGD 102,000 minus annual OW subject to CPF. The bonus amount attracting CPF is the lower of the payment and the remaining AW ceiling.
SGD 102,000 is the combined annual salary ceiling for OW and AW, not the maximum annual OW in 2026. With a SGD 8,000 monthly OW ceiling, twelve capped months produce at most SGD 96,000 of OW subject to CPF and normally leave SGD 6,000 for AW.
The annual AW allowance in one table
| Annual OW subject to CPF | Annual AW ceiling | CPF-bearing amount of a SGD 20,000 bonus |
|---|---|---|
| SGD 60,000 | SGD 42,000 | SGD 20,000 |
| SGD 80,000 | SGD 22,000 | SGD 20,000 |
| SGD 96,000 | SGD 6,000 | SGD 6,000 |
Annual OW of SGD 60,000: the bonus can fit in full
With no earlier AW, a SGD 20,000 bonus is below the SGD 42,000 ceiling. The full payment becomes the CPF basis before applying the employee's age and status rates.
Annual OW of SGD 80,000: include earlier AW
The annual ceiling is SGD 22,000. If SGD 8,000 of commission has already attracted CPF, only SGD 14,000 remains for the year-end bonus; the ceiling does not restart with every payment.
Annual OW of SGD 96,000: SGD 6,000 still remains
This scenario is often misstated as “no CPF on any bonus”. The SGD 6,000 difference between the annual salary ceiling and annual OW must remain.
Which year applies to a year-end bonus?
Use the year in which the bonus becomes due and payable, not just the performance year printed on it. Employers estimate annual OW when paying AW and reconcile against actual OW at year-end, which can create a shortfall or refund.
Termination bonuses and the final payslip
- Identify which termination items are wages or AW.
- Include AW already paid by the same employer in the year.
- Recalculate the ceiling from actual OW in the final month.
- Refer cross-year payments, retrospective adjustments and multiple-employer situations to payroll and CPF Board.
Bonus calculation questions
Can a bonus attract CPF when monthly pay exceeds SGD 8,000?
Yes. At the 2026 maximum annual OW of SGD 96,000, there can still be SGD 6,000 of AW room.
Do bonuses from two employers share one ceiling?
The ceiling is generally calculated per employer, per employee and per year.
Why is bonus CPF below the amount from a simple percentage?
The usual reason is that only part of the bonus falls within the remaining AW ceiling.
Calculate and check official examples
Use the Bonus CPF calculator · CPF Board AW examples · Official AW calculator
Written and reviewed by the QuickCalc editorial team. Last reviewed: 8 Sep 2026. Report a rule or calculation issue at w56975828@gmail.com.