CPFB | Calculating net earnings for platform workers

PLATFORM OPERATOR OBLIGATIONS

Calculating net earnings

CPF contributions are calculated based on platform workers’ net earnings.

Net earnings

How to calculate net earnings

Net Earnings = Gross Earnings minus Fixed Expense Deduction Amount

Platform operators must apply the Fixed Expense Deduction Amount (FEDA) on platform workers' gross earnings, to derive the net earnings.

CPF contribution rates are then applied on the platform workers’ net earnings. Platform operators must submit accurate net earnings information of their platform workers to CPF Board, for verification of CPF contributions.

Gross earnings

All payments or benefits which are meant to supplement platform workers’ earnings will attract CPF contributions. Gross earnings should be reflected in platform workers’ monthly earnings slip.

Fixed Expense Deduction Amount

The Fixed Expense Deduction Amount (FEDA) depends on the platform workers’ mode of transport and reflects expenses for the majority of platform workers.

You will apply FEDA based on the platform worker's mode of transport for the job.

Mode of transport	FEDA
Cars, vans, lorries, trucks	60%
Motorcycles, power-assisted bicycles, motorised personal mobility devices	35%
Bicycles, walkers (including use of public transport)	20%

For payments or benefits not tied to one specific mode of transport (e.g. incentive for completion of 20 jobs, where some jobs were done using a car, and others on a bicycle), the lowest FEDA will be applied.

Examples on how to calculate net earnings:

Platform worker A is working as a Private Hire Car Driver.

She earned $4,000 for the month.

Gross earnings: $4,000

FEDA for a car: 60%

Net earnings: $4,000 * (1-60%) = $1,600

Platform worker B initially used a motorbike for food delivery, and subsequently switched to a bicycle.

He earned multiple payments for the month:

Earnings from jobs completed on bicycle= $1,000 [FEDA: 20%]
Earnings from jobs completed on motorbike = $2,000 [FEDA: 35%]
Bonus payment for completing a certain number of jobs (using both bicycle and motorbike) = $1,000 [FEDA: 20%, i.e. lower of FEDA for bicycle and motorbike]

Net earnings: $1,000 * (1-20%) + $2,000 * (1-35%) + $1,000 * (1-20%) = $2,900

What are the next steps after calculating net earnings?

After computing your platform worker’s net earnings, apply the CPF contribution rate applicable to your platform worker to calculate the amount of CPF contributions you need to make.

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