IRAS has observed the following instances of unacceptable practices where employers engage in arrangements to alter their CPF contribution data, such that the data do not correspond with employees’ wages. As JSS payouts are automatically computed based on CPF contribution data, these employers then stand to gain a higher
amount of the cash subsidy than due to them.
Example 1: Making mandatory CPF contributions for non-genuine employees

This is a fraudulent arrangement. Employers should not make any mandatory CPF contributions to individuals who are not their genuine employees.
Individuals are reminded that providing their personal information to some employers to facilitate such schemes may make them accomplices to the fraud, resulting in criminal liability for the individuals.
Individuals should not give out their personal information such as NRIC, SingPass or bank account details in exchange for CPF contributions and/or money.
Example 2: Continuing mandatory CPF contributions for employees whose employment has been ceased or put on no-pay leave

Employers should stop making mandatory CPF contributions for employees who have been retrenched or are on no-pay leave.
However, employers can continue to make voluntary CPF contributions to the CPF accounts of employees on no-pay leave by applying for a separate CPF submission number with CPF Board.
(For more details on making voluntary CPF contributions for employees, please find out more at the
CPF Board website).
Example 3: Maintaining mandatory CPF contribution amounts based on past wages for employees who have suffered wage cuts

CPF mandatory contributions are based on employees’ wages, age and citizenship. A wage cut on the employees’ part should see a corresponding decrease in the CPF contribution.
However, employers can continue to make voluntary CPF contributions to the CPF accounts of employees whose wages have been cut by applying for a separate CPF submission number with CPF Board.
(For more details on making voluntary CPF contributions for employees, please find out more at the
CPF Board website)
Example 4: Increasing CPF contributions for employees without any actual wage increase

CPF mandatory contributions are based on employees’ wages, age and citizenship. The prevailing CPF contribution rates can be found on the CPF website.
Example 5: Inflating mandatory CPF contributions and deducting these excess contributions from employees’ wages in cash

This is a fraudulent arrangement. Employers should only make the correct amount of mandatory CPF contributions based on the actual wages paid to their employees.
Example 6: Artificially splitting wages of employees across multiple business entities
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*CPF contributions for wages exceeding $4,600 are excluded in the computation of JSS payouts.
Employers should only make mandatory CPF contributions to employees for the business entities they are working for, instead of artificially splitting the wages of its employees across related business entities to circumvent the $4,600 salary ceiling.
Example 7: Making purported mandatory
CPF contributions for purported wages paid without expectation of any work to
be done (e.g. solely to fulfill regulatory requirements or quotas, or family
members who are not involved in the business)

Employers should only make mandatory CPF contributions to employees for wages paid for work performed as part of a contract of service.
Example 8: Making purported mandatory CPF contributions for wages that are not
commensurate with the volume or nature of work of the employees

Employers should only make mandatory
CPF contributions to employees for wages paid that are commensurate with the
volume or nature of work of the employees, instead of making purported
mandatory CPF contributions based on inflated wages to increase the amount of
JSS subsidy.
The above examples of unacceptable
practices for JSS also apply to JGI. Some additional examples of unacceptable
practices specific to JGI are provided below.
Similar to JSS, JGI payout is
automatically computed based on CPF contribution data. Hence, employers who engage
in arrangements to alter their CPF contribution data such that the data does
not correspond with employees’ wages will stand to gain a higher amount of the cash
subsidy than due to them.
Example 1: Wilfully
delaying or omitting mandatory CPF contributions for existing employees in the
month of August 2020 / February 2021 to reduce the firm’s baseline headcount as
of August 2020 / February 2021

CPF contributions are payable for Singaporeans and Singapore PRs who are
employed under a contract of service, including part-time and casual employees
and employees on term employment contracts.
It is a criminal offence under the CPF Act for late and/non-payment of
CPF contributions. For more details on CPF compliance matters, please find out
more at the CPF Board
website)
Example 2: Excessive firing or retrenchment of existing employees and
subsequent replacement with new employees

Employers are encouraged to take a long-term view of their manpower
needs, including the need to maintain a strong Singaporean core.
When managing excess manpower, retrenchment should always be the last
resort after all options have been considered and found to be unworkable.
Example 3: Transferring employees
across business entities

Employers should not transfer employees without any genuine or
commercial basis. The JGI is only for genuine new hires.
In general, employee transfers across
business entities would not qualify for JGI payments. Any appeals would be granted on a
case-by-case basis, and would only be given if IRAS is satisfied that the
purpose or effect of any arrangement is not abusive or avoidable, e.g. due to cessation of business
operations/functions, where the transferred employee would have been retrenched
if not for the transfer.
Example 4: Artificially splitting the wages of
employees across multiple related business entities

*CPF contributions for wages
exceeding $5,000 are excluded in the computation of JGI payouts.
Employers should only make mandatory
CPF contributions to employees for the business entities they are working for, instead
of artificially splitting the wages of its employees across related business
entities to circumvent the $5,000 salary ceiling.