The Annual Wage Supplement (AWS) — the 13th-month bonus — is a single annual payment, usually around one month's salary. The key point many employers get wrong: it is not legally mandatory. You must pay it only if the employment contract or collective agreement says so. When you do pay it, CPF applies as an Additional Wage.
This guide covers whether AWS is required, how CPF treats it, and how it differs from a performance bonus.
Is AWS mandatory?
No. The Employment Act does not require employers to pay AWS. It is payable only if it is written into the employment contract or a collective agreement. Many Singapore employers pay a 13th-month AWS by custom, and the Tripartite Guidelines encourage rewarding employees — but it is not a statutory entitlement you owe by default. Confirm the current position with the Ministry of Manpower.
AWS vs a performance bonus
| AWS (13th-month) | Performance bonus | |
|---|---|---|
| Amount | Usually fixed (≈ one month's wage) | Variable |
| Basis | Contract / custom | Company or individual performance |
| Discretion | Low (if contractual) | Discretionary |
| CPF | Additional Wage | Additional Wage |
Both are Additional Wages for CPF — the difference is contractual certainty, not CPF treatment.
How CPF applies to AWS
AWS is an Additional Wage (AW), so it attracts CPF, but only up to the Additional Wage ceiling for the year:
AW ceiling = S$102,000 − total Ordinary Wages subject to CPF for the year.
In other words, CPF on bonuses is capped once an employee's total wages for the year reach the S$102,000 annual ceiling. For the full mechanics and the 2026 rates, see our CPF contribution rates guide.
When AWS is paid
AWS is typically paid once a year, often in December, but the timing is whatever the contract specifies. Because it is CPF-liable, it flows through your normal monthly run in the month it is paid — see the monthly payroll cycle.
How AimmPayroll handles AWS
AimmPayroll treats AWS and bonuses as Additional Wages, applies CPF correctly against the Additional Wage ceiling, and itemises them on the payslip — so a 13th-month payment is calculated and CPF'd accurately without manual workarounds. Start free for up to three employees.