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    Central Provident Fund (CPF) Non-Payment and/or Delay by Employer in Singapore

    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.

    What happens when your CPF contribution is not paid or delayed?

    When an employer fails to make the contribution on time, it leads to a chain of events:

    • Firstly, the Central Provident Fund Board will identify employers who have been delinquent and with the help of a computerised system, a list of defaulting employers will be made. This list is handed over to investigation officers for them to follow up.

    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.

    • Secondly, even after receiving a notice if the employers fail to make their contributions, they will be asked to appear for a court hearing. The court will then order the employers to pay the pending contributions and interest, along with a court fine. They may be sent to jail as well.
    • Thirdly, even after a court hearing if employers fail to pay the pending provident fund contributions, a legal warrant will be released. This warrant will authorise the legal authorities to take over and sell the assets of employers. As a last resort, settlement proceedings or bankruptcy might also be initiated against the employers.
    • Employers who have been declared guilty for late payment offence are liable to pay penalties. The penalties include:
      • A court fine of up to S$5,000. For every offence, a court fee that is no less than S$1,000 needs to paid in addition to or instead of imprisonment for up to 6 months on the first conviction.
      • A court fine of up to S$10,000. For every offence, a court fee that is no less than S$2,000 needs to paid in addition to or instead of imprisonment for up to 12 months on any further convictions.

    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.

    CPF Late Payment Interest Calculator

    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:

    • Year and month of contribution
    • Amount contributed
    • Date of payment made

    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.

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