From the payroll item list, add a deduction payroll item type for CPF Employee payroll item.
In the Agency for employee-paid liability window, you need to select an agency name (CPF Board) and select a Payroll Liability account (usually, I use CPF Payable account).
Select ‘None’ for Tax tracking type and uncheck the selection for PAYG Tax from the Taxes window.
In the Calculate based on quantity window, you have an option of:
For CPF Employee, we can select the ‘Neither’ radio button.
Gross vs. Net window, we can leave the option as default – net pay.
Under the Default rate and limit window, you can enter CPF Rate such as 20% for employee who are below 55 (Usually, I leave it blank. It is because in Singapore we round up the CPF payable to a dollar. So if we were to fix a percentage in here; then, monthly we have to edit it during the creation of payroll; I would rather fix the rate in the individual employee default).
Besides, we shall also uncheck the check box for ‘This is an annual limit’.