Skip to content
English
BrioHR Website
  • There are no suggestions because the search field is empty.

Self-Help Group (SHG) Proration in BrioHR

This article explains how employee salaries should be prorated for Singapore Self-Help Group (SHG) contributions when Permanent Resident status takes effect mid-month, including CPF and SHG compliance requirements.

Audience & Scope

Audience: HR Admin

Module: Payroll

Country: Singapore

 

Self-Help Groups (SHGs) are mandatory monthly contributions deducted together with Central Provident Fund (CPF) contributions for eligible employees. These contributions are calculated based on predefined tables that consider factors such as salary bands, race, or religion. This applies specifically to employees who obtain Singapore Permanent Resident (PR) status partway through a calendar month.

1. What Are Self-Help Groups (SHGs)?

Singapore’s SHGs are community-based funds established to support various social, educational, and welfare initiatives. The main SHGs include:

  • ECF (Eurasian Community Fund)

  • CDAC (Chinese Development Assistance Council)

  • MBMF (Mosque Building and Mendaki Fund)

  • Cinda (Singapore Indian Development Association)

The applicable SHG contribution amount is determined using contribution tables, which vary based on the employee’s monthly wages and community affiliation.

2. Proration Requirement for New Permanent Residents

For employees who become Singapore Permanent Residents during the middle of a month, special treatment is required for payroll calculations:

  • SHG contributions only apply from the PR effective date onwards.

  • If the PR effective date does not fall on the first day of the month, the employee’s salary portion subject to CPF and SHG contributions must be prorated.

  • The prorated salary is then used to determine the applicable SHG contribution amount based on the relevant contribution table.

This ensures compliance with CPF and SHG regulations and prevents over- or under-deduction of contributions for the month in which PR status takes effect.

3. Why This Matters

Accurate proration is essential to:

  • Ensure statutory compliance with CPF and SHG contribution requirements

  • Avoid payroll discrepancies and audit issues

  • Maintain transparency and fairness in employee salary deductions

Employers should review their payroll processes to ensure that PR effective dates are correctly captured and that salary proration is applied consistently for CPF and SHG calculations.

Common Issues/FAQ

Q: When are SHG contributions applicable to an employee?

A: SHG contributions are applicable once an employee is subject to CPF contributions, including Singapore Citizens and Permanent Residents.

Q. Which Self-Help Groups are covered under SHG contributions?

A: The main SHGs include ECF, CDAC, MBMF, and Cinda, each with contribution rates based on specific eligibility criteria and salary bands.

Q. What happens if an employee becomes a PR in the middle of the month?

A: If the PR effective date falls mid-month, the employee’s salary subject to CPF and SHG contributions must be prorated from the PR effective date to the end of the month.

 

Related Articles

Salary Proration for Singapore Payroll: A Complete Guide

Importance of PR Effective Date & How It Impacts CPF Calculation (SG)

 

Last Updated & Ownership

Last Updated: 29 January 2026

By: Arveena