The Central Provident Fund is a compulsory savings plan in Singapore that is funded via contributions made by both the employee and employer. It is a scheme that has been introduced by the government of Singapore with an aim to provide citizens with monetary benefits after they retire.
You are eligible for a CPF account if you are an employee who is either a Singapore citizen or a permanent resident. CPF contributions are to be paid when there is a contract of service between an employer and employee. Both the employee’s and employer’s monthly contribution needs to be paid by the employer. The employer will retrieve the employee’s share of the provident fund from the latter’s monthly wages.
When an employer fails to make the contribution on time, it leads to a chain of events:
A legal notice will be sent to this set of employers via registered post in order to notify them that a strict legal action will be enforced if the pending contributions, composition amount, and interest are not paid within the due date.
In a situation where in an employer has retrieved an employee’s share of CPF contribution but has failed to pay it to the Board, the employer will be liable to pay a fine that can go up to S$10,000 in addition to or instead of imprisonment for up to 7 years.
The Late Payment Interest Calculator helps you to estimate how much CPF late payment interest you are liable to pay. The mandatory fields that are required in order to calculate the interest include:
It is best if you remain vigilant as an employer and ensure that you are doing your duty of making contributions for your employees on a regular basis.