Need some help on cpf questions

[RoLanTo]

hello.
i have some questions regarding cpf.. hope some financial guru can help me understand how it works..

if one person hits the annual contribution limit (30600).. then the balance employer contribution will it comes to us as cash?

example.. 12 months contribution (5000/month, 1800 contribution, 1000 self + 800 emp) = 1800 * 12 = 21600

30600 - 21600 = 9000 balance..
CPF sa top up 9k means hit limit liao right??

then lets assume yr end company give u bonus 25k, the bonus by right is 5k self+ 4k emp... so effectively, u will be getting 29k. with the annual limit hit.. what will happen to the 4k??

 

[teerance85]

Assume a high income earner, earns $5000 per mth.

Formula is $85000 (Total OW + AW) - $60000 (Total OW ; $5000x12) = $25000

This means for the yr, only $25000 worth of bonuses WILL be CPF payable. Anything extra will be refunded back after the turn of the year.

CPF SA top up has NOTHING to do with the limit. Essentially just look at your SA, and whether it has the prevailing Min Sum ($155000), if no, difference is the top up limit.

Hope this answer ur qn

 

[RoLanTo]

ohh.. so CPF SA top up is not consider part of volunteer contribution (VC) ah?
Maximum amount of VC = $30,600 – Mandatory Contributions

can you clarify "refunded back after the turn of the year"? i dont quite understand.
if use an example of bonus 30,000.. 25000 will be CPF, what happen to the balance 5000? both myself and employer dont need pay cpf?

 

[MindMatrix]

ohh.. so CPF SA top up is not consider part of volunteer contribution (VC) ah?
Maximum amount of VC = $30,600 – Mandatory Contributions

can you clarify "refunded back after the turn of the year"? i dont quite understand.
if use an example of bonus 30,000.. 25000 will be CPF, what happen to the balance 5000? both myself and employer dont need pay cpf?

http://mycpf.cpf.gov.sg/Employers/E...Employer_Limits_CPF_cons_CPF_Annual_Limit.htm

Hi, bro

If our CPF con exceed $30,600 for the calendar year (they'll count both the mandatory contribution and voluntary contribution and top-up also), by the first quarter of the next year, they'll refund the excess to us without interest.

 

[MindMatrix]

http://mycpf.cpf.gov.sg/Employers/E...Employer_Limits_CPF_cons_CPF_Annual_Limit.htm

Hi, bro

If our CPF con exceed $30,600 for the calendar year (they'll count both the mandatory contribution and voluntary contribution and top-up also), by the first quarter of the next year, they'll refund the excess to us without interest.

SORRY - Pls ignore the "top-up" that we can make to Special Account or Retirement Account. Top-up is NOT counted for the purpose of determining whether we have reached our CPF Annual Limit for the year. I juz called CPF, and they told me it should be excluded. Sorry for the wrong info ...

 

[henrylbh]

ohh.. so CPF SA top up is not consider part of volunteer contribution (VC) ah?
Maximum amount of VC = $30,600 – Mandatory Contributions

can you clarify "refunded back after the turn of the year"? i dont quite understand.
if use an example of bonus 30,000.. 25000 will be CPF, what happen to the balance 5000? both myself and employer dont need pay cpf?

What I know is VC is separate from topping up.

As noted by you, annual contribution limit = 30,600 less mandatory contribution. Once your VC exceed the annual contribution limit, they will refund the excess within a short period (about a month) after discovering it.

Besides VC to hit the annual limit, you can still top up your SA or RA to the min sum and the top up does not count as VC.

There are ways to get round the annual contribution limit, but not many can exploit it or know how to.

 

[RoLanTo]

thank you v much for all the info.

 

[Yo2020]

then lets assume yr end company give u bonus 25k, the bonus by right is 5k self+ 4k emp... so effectively, u will be getting 29k. with the annual limit hit.. what will happen to the 4k??

in this example, there is no excess (of 4k) as u rightly pointed out that the balance cpf contribution is 9k. so all the 9k (5k self + 4k emp) goes to cpf.
ie. u get 20k (25k-5k) in cash n 9k (5k self + 4k emp) in cpf.

u get full cash only for the bonus that exceeds 25k.
eg. if the bonus is 28k, then u get 23k (28k-5k) in cash n 9k (5k self + 4k emp) in cpf.

note: this is assuming monthly pay is at least 5k.