8 Lies Some Employers Tell You Regarding CPF

First up, here’s a quick test of how well you know what sort of allowances and payments attract CPF contributions:

1) Cash gift (e.g. hongbao) given to employees during festive seaon – Is CPF payable?

2) Grooming and haircut allowance for employees – Is CPF payable?

3) Fixed payment to employees for vacation expenses – Is CPF payable?

4) Payment to employees for laundry expenses on personal clothing – Is CPF payable?

5) Make-up pay given by MINDEF/SCDF/SPF for NSmen employees during their NS training period – Is CPF payable?

6) Wages for employees on probation – Is CPF payable?

7) Cash award for staff productivity – Is CPF payable?

8) Service charge collection by hotels/restaurants and distributed as part of wages to employees – Is CPF payable?

If you answered “YES” to ALL THE ABOVE, you are correct!😀

People often ask me why I quit my previous full-time job to become a blogger, and the conversation usually involves my experience of being wrongfully denied my CPF monies (a total of S$14,653). I’ll share more in a bit if you have not heard the story before. However, other people have also shared their own similar instances of being shortchanged when it comes to CPF contributions.

This blogpost post is for you, if you are an employee taking up a part time job, internship, full time employment, freelance job, etc, to help you understand your rights better and protect yourselves from the lies that employers spin when they want to evade paying the CPF monies due to you.

CPF Board

Source: AsiaOne

CPF non-payment with regard to freelance jobs or part time jobs Singapore citizens (and especially students) sign up for usually involve the lie that it is better to take home 100% of their pay and not have any CPF contributions. Very tempting too, if I may add, when I was earning just S$4 an hour more than 10 years ago as a retail assistant. 

~ The 8 Common Lies Employers Tell Jobseekers ~

LIE #1: It Is In Your Best Interest If You Take Home 100% Of Your Pay And Not Have Any CPF Contribution

One example shared with me is of a Mr Tan, who is an odd-job labourer in his late 50s. He left his ex-company to join another company. His new boss told him that this company doesn’t provide CPF contributions and mentioned that Mr Tan can take home the full S$1,900 he earns instead of contributing 13% of his wages to CPF.

What his boss did not say is that the company will also get away with not contributing the employers’ portion of 12% of Mr Tan’s wages, and that Mr Tan will not receive Workfare Income Supplement (WIS) too because there is no record of CPF contributions from either employer or employee!


After 3 months, Mr Tan realized he didn’t receive the WIS. His boss said since Mr Tan had agreed that there would be no CPF contribution, the company will not back pay the CPF. Thus, Mr Tan quit and found another job that pays CPF.

LIE #2: (Not Providing CPF Contributions And Keeping Silent About It)

This is especially crucial when it comes to part time jobs for students who probably have inadequate knowledge about CPF contributions. Even adults can sometimes be “conned” without knowing. 

Madam Lam Yook Chan worked as an outsourced factory line leader in a pharmaceutical company for five years, working long hours and drawing a monthly salary of S$1150.

She did not even realize that she had never received CPF contributions from her errant employer till her husband spotted a newspaper ad about the launch of NTUC’s U Care Centre and called in to inquire.

Madam Lam visited the U Care Centre at NTUC’s e2i (Employment and Employability Institute) where the consultants’ investigations revealed that she was owed CPF contributions of over five years!

NTUC U Care Centre

Source: The Straits Times

With the MOM and CPF Board’s help, Madam Lam managed to recover over S$10,000 worth of CPF contributions. Through further investigations, another 113 of Madam Lam’s colleagues’ CPF was also recovered. In addition, 45 workers also received higher Workfare Income Supplement (WIS) allotment totaling about $13,000.

During this ordeal, Madam Lam was even offered a private settlement of $9,000 in cash from the company to silence her but she refused it after consulting U Care Centre.
Madam Lam has since resigned from the company and found a new job. She is still a factory worker in the same industry but earns a higher pay. She has also decided to sign up as a union member with her new job.

There are many other workers like Madam Lam who are unaware of their rights and who are missing out on their rightful CPF contributions and their WIS payouts.

LIE #3: “You Decide: You Want CPF OR Your Job?”

Cleaner Auntie

I’ve shared about this earlier (read the full post here). A 65-year-old cleaning lady was told by the cleaning contractor she is working for that she could either choose to receive more take-home pay (S$800) without CPF, or get CPF but with less pay. On top of that, she was not offered a contract of service, thus she was not entitled to annual leave, medical leave and other Employment Act benefits.

Her son, aged over 40, suffers from schizophrenia and lives with her. He has trouble holding down a job but has medical bills of up to S$200 per month.

When she realized her friends were receiving Workfare but she wasn’t, she called the NTUC hotline 1800-255-2828 to enquire about how to sign up for Workfare, not realizing that it is an auto-inclusion scheme by the government as long as the employee gets CPF.

She was referred to the CPF Board, which helped her retrieve 3 years’ worth of employer CPF contributions, amounting to S$2940. Although she gets less take-home pay, the CPF contributions can go towards the rent for her rental flat and foot part of her son’s medical bills. She can now receive Workfare too.

Unfortunately, without a contract of service, the company will not be reimbursing her for the annual leave, medical leave, etc, that she should have gotten during the 3 years she worked for them.

LIE #4: “Don’t Worry! I’ve Put In The Correct CPF Amount!”
Mdm Lau is a part-time cleaner at a coffee shop, earning a few hundred dollars a month. She is a 79-year-old widow who works to keep active as she gets bored watching TV at home the whole day.

Her employer told her that he will contribute to her CPF account. She trusted him to contribute the “proper” percentage of 20% of her pay. She then received her yearly CPF statement but cannot read English so she asked her grandson to translate for her,  and he asked her why there is a monthly $2 CPF contribution from her employer. It prompted her to check with her employer regarding the low S$2 contribution.

CPF Contribution

LIE #5: “Our Company Does Not Pay CPF On Commissions And Bonuses”

Click here to read about my earlier post on my own (unfortunate) experience of this. In 2010, my income for the whole year was S$114,000. The bulk of it was from sales commissions. There was an unwritten company policy that employer CPF contributions on commissions would come from the employee. So employer AND employee CPF contributions were deducted from my salary – do the math and you’ll know it was quite a large sum.

I asked the CPF Board for help in retrieving my money, and the company even wanted to contest this by engaging a lawyer. Thankfully, the CPF Board told them that they have “no case” and to hand over the monies please.


LIE #6: “Only Full-timers Get CPF”

Your employer is required to pay both the employer’s and employee’s share of CPF contributions every month if you earn more than $50/month. He/she is entitled to recover the employee’s share from your wages.

CPF contributions are payable for Singapore Citizens (SC) and Singapore Permanent Residents (SPR) who are:

1) working in Singapore under a Contract of Service; and

Contract of Service

Source: Singapore Business Review

2) employed under a permanent, part-time or casual basis.

However, if you are a SC or SPR working overseas, CPF contributions are not mandatory.

LIE #7: “If You Earn Less Than $60 A Day, You Won’t Get CPF”

[As above] As long as you earn more than $50 per month, your employer should pay your CPF contributions.

LIE #8: “You Are Employed By More Than 1 Employer So You Won’t Get CPF”

If you are concurrently employed by more than one employer, all your employers must pay CPF contributions based on the wages paid.

However, if your total wages exceed the Ordinary Wage ceiling, you may apply to limit your share of contributions on Ordinary Wages by sending in your application to employer@cpf.gov.sg.

All your employers have to pay the usual employer’s share of CPF contributions on the full amount of wages, subject to the Ordinary Wage ceiling. The prevailing Ordinary Wage ceiling is $5,000 per month. Thus if you earn a monthly wage of $6,000, only $5,000 would attract CPF contributions; the remaining $1,000 would not.

From 1 Jan 2016, the Ordinary Wage ceiling will be raised to $6,000 a month.

This means if you’re below 50 years old and earn more than $6,000 a month, you will receive extra employer’s CPF contribution of 17% x $1,000 = $170 more every month!


Now that you’ve read this and know your rights when it comes to CPF contributions, please share this article with your family and friends, so NO ONE, especially the older folks and those who are less educated, has to fall prey to these 8 lies ever again.🙂

Here’s an Infographic that neatly summarizes this blogpost:

CPF Infographic

Feel Free To Share It With A Link Back To This Post🙂

~ Brought to you by the Labour Movement ~

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