Why does CPF look different in a resignation month?

When an employee resigns, HReasily must switch from Projected Estimates to Actual Totals.

During the year, the system projects the employee will work for 12 months to calculate the Additional Wage (AW) ceiling. When they resign, the work year is shortened. This "shrinking" of the work year actually increases the "room" available for bonuses (AW), often triggering a "shortfall" or "catch-up" payment from earlier months.

Step 1: The Logic Shift

• January to Month Prior: CPF is calculated on a Projected OW (assuming 12 months of salary).

• Resignation Month: CPF is calculated on Actual OW (total salary earned from Jan to the last day of work).

Result: Because the total annual Ordinary Wage is now lower, the AW Ceiling ($102,000 - Total OW) becomes higher.

Step 2: 2026 Case Study (April Resignation)

Scenario: * Employee: Under 55, Singapore Citizen (EE: 20% / ER: 17%).

• Monthly Salary (OW): $9,000 (Capped at $8,000 per 2026 rules).

• Bonuses (AW): $10,000 in January and $10,000 in April.

• Resignation: End of April.

The Math:

1. Total Actual OW (Jan-Apr): 4 months × $8,000 = $32,000.

2. Final AW Ceiling: $102,000 – $32,000 = $70,000.

3. Total AW Paid: $20,000. (Since $20k < $70k, the full amount is subject to CPF).

Step 3: The Shortfall Audit Table

In January, the system capped the bonus contribution at $6,000 because it projected a full year of salary. Now that the employee is leaving in April, we must "catch up" on the remaining $4,000 from January.

*In Jan, CPF was only paid on $8k (OW) + $6k (Projected AW Cap) = $14,000.

Step 4: Final April Paycheck Calculation

The final CPF deducted in April is the sum of the current month's liability plus the shortfalls detected from previous months.

How the System Handles It Automatically

You do not need to calculate these shortfalls manually. HReasily's compliance engine automatically:

1. Detects the Resignation: Once a resignation date is set, the projection logic is disabled.

2. Re-evaluates YTD Math: It looks back at every month from January to ensure no "room" was missed in the AW ceiling.

3. Consolidates the Payment: It adds any discovered shortfalls to the final payslip to ensure the employee’s CPF contributions are 100% compliant before they depart.