You will be able to explain each deduction on your payslip and say which ones you can change.
In April, Priya (an invented example) got her first proper payslip. The deductions section showed "Employee CPF" with a figure in the hundreds, then "CDAC" with a couple of dollars, then nothing else.
Deductions cause more payslip questions than any other section, because they are lines you did not choose. They come in three kinds. Some are set by law, so you can check them but you cannot change them. One is set by default, and you can change it through the fund that receives it. The rest should only be there because you agreed to them, and you can ask about any of them. It was correct that Priya had nothing below CDAC, but she couldn't be sure of that until she knew what could have been there.
For Singapore citizens and permanent residents, the employee CPF contribution is almost always the biggest deduction. It is your own money, taken from your pay and moved into your CPF accounts. Your employer pays its own separate share on top. Lesson 2.1 of "The Singapore personal finance system", "From gross pay to take-home pay: where CPF fits", explains how the two shares work.
Your employee rate depends on two things: your age and how much you earn. The CPF Board publishes a rate table with bands for age and for earnings, and it revises the rates from time to time. Older workers have lower rates, and very low earners pay less or nothing. Don't rely on a rate someone quoted to you years ago. Use the current table on the CPF Board website and find your age band.
To check the deduction, multiply the wages that attract CPF that month by your employee rate. In most months those wages are your ordinary wages, meaning your regular monthly pay, such as salary and fixed allowances. The full check goes like this:
Open the current rate table on the CPF Board website. Find your age band and the matching employee rate. Add up the wages that attract CPF that month, which is your salary plus fixed allowances. Apply the monthly ceiling on ordinary wages. In a bonus month, also check the separate yearly limit on additional wages. Multiply those wages by your employee rate. Compare the result with your payslip and confirm it with the CPF Board's contribution calculator.
Priya's basic salary is S$3,400 and she gets a fixed monthly allowance of S$200 (example figures). Her ordinary wages for April are S$3,400 + S$200 = S$3,600. Suppose her employee rate is 18% (an example rate, not a current CPF rate). Her employee CPF should then be S$3,600 x 18% = S$648. Now suppose her slip showed S$612. That is exactly S$3,400 x 18%, so the likely cause is that CPF was calculated on her salary alone and the allowance was left out. If your own figure is lower than you expected, check first whether a fixed allowance is missing from the wages CPF was worked out on.
CPF also has rounding rules. A difference of a few cents, or under a dollar, is usually rounding and not an error. The CPF Board's contribution calculator applies the official rounding, so you can use it to confirm the figure.
CPF is only payable on wages up to a limit. There is a monthly ceiling on ordinary wages, and anything you earn above it in that month attracts no CPF. For example, if the ceiling were S$7,000 and you earned S$9,000 in a month, CPF would be worked out on S$7,000. The real ceiling is published on the CPF Board website and has changed in recent years, so check the current figure there.
Bonuses count as additional wages, which are bonuses and similar payments kept separate from ordinary wages. Additional wages have their own yearly limit, and that limit depends partly on how much ordinary wage you earned that year. Lesson 1.4 shows how a bonus appears on the payslip. In a big bonus month the CPF figure can look odd until you know which limit applies, so look up both limits on the CPF website before you decide anything is wrong.
You cannot opt out of CPF or change your CPF rate, because it is required by law. What you can do is check that the right wage and the right rate were used.
The small line under CPF is usually a self-help group contribution. This is a default payroll deduction paid to one of four funds: CDAC for Chinese employees, ECF for Eurasians, MBMF for Muslims and SINDA for Indians. Your employer deducts it based on the race or religion recorded with them and passes it to the fund. The amount depends on your wages, and each fund publishes its own table.
This is the deduction you can change. You can keep it, change it or opt out by applying to the fund, and each fund's website explains how. If the fund on your payslip is the wrong one for you, for example because your race was recorded wrongly when you joined, tell HR. It is a records error and quick to fix.
Priya chose to keep her CDAC contribution as it was. She made that decision herself, knowing what the line was for, rather than accepting it without understanding it.
Apart from CPF and the self-help group fund, a payslip should not have many deductions. For every other line, ask what it is and what you agreed to. A staff loan repayment should match a signed loan agreement. A deduction for staff accommodation or meals should match something in writing. MOM's website has a page on salary deductions. It lists what an employer may deduct, for example for unpaid leave, and explains which deductions need your written consent.
If you cannot trace a deduction to any document, email HR about it, even if it is small, because small unexplained deductions tend to repeat every month.
Income tax is usually missing from the payslip. Singapore does not deduct tax from salary each month. IRAS assesses it once a year, and Module 4 covers it.
Before the activity, find your latest payslip and open the CPF Board's current rate table, then work out which age band you're in and which of your pay lines count as ordinary wages.
Work out your employee CPF deduction again using the current rate table on the CPF website, and check that it matches your payslip.
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