Please note that there will be a personal income tax relief cap of $80,000, which will apply from the Year of Assessment (YA) 2018. This cap applies to the total amount of all tax reliefs claimed, including any relief on compulsory/ voluntary CPF contributions made on or after 1 Jan 2017. There will be no refund for accepted voluntary CPF contributions. As such, taxpayers who make voluntary CPF contributions on or after 1 Jan 2017 should take note of the overall personal income tax relief cap. You should evaluate whether you would benefit from tax relief on your voluntary CPF contributions, and make an informed decision accordingly.
CPF Relief is capped by the amount of compulsory employee CPF contributions made on Ordinary Wages and Additional Wages under the CPF Act.
Ordinary wages are wages due or granted for employment. They include allowances (e.g. food allowance and overtime payments) earned by an employee in the month. Ordinary wages must be paid before the due date for payment of CPF contributions for that month.
Additional wages are wage supplements which are not granted wholly and exclusively for the month. These include your annual bonus and leave pay.
You can only claim CPF Relief if your employee CPF contributions have not exceeded the Ordinary Wage Ceiling and Additional Wage Ceiling.
From 1 Sep 2011 to 31 Dec 2015
$5,000 per month
From 1 Jan 2016
$6,000 per month
$85,000 less Total Ordinary Wages subject to CPF ($85,000 = 17 months x $5,000)
$102,000 less Total OW subject to CPF ($102,000 = 17 months x $6,000)
For more information on OW Ceiling and AW Ceiling, please refer to CPF Board's website.
When employee or employer CPF contributions have exceeded the OW Ceiling or AW Ceiling, the excess amount is considered voluntary CPF contributions.
These do not qualify for CPF Relief.
These are taxable as your employment income because they constitute gains or profits from employment. You need to report this under 'Employment - Others' in your tax form. Excess / Voluntary Contributions while on Secondment or Overseas
If the excess / voluntary amount of employer CPF contributions is made while you are seconded or posted overseas for work, this amount is not taxable.
Mr Lim is 40 years old. His compulsory employee CPF contribution rate is 20%. He received the following income in 2017:
Total wages for 2017
$5,000 x 12 months = $60,000
$45,000
OW & AW Ceiling
$6,000 x 12 months = $72,000
$102,000 - (A) = $102,000 - $60,000 = $42,000
Wages subject to compulsory CPF contributions
$60,000 (A) The OW ($60,000) is subject to compulsory CPF contributions as the total OW for the year has not exceeded the OW Ceiling ($72,000).
$42,000 The AW ($45,000) exceeds the AW Ceiling ($42,000). The AW subject to compulsory CPF contribution is capped at $42,000 .
Mr Lim's CPF Relief for the Year of Assessment (YA) 2018 is computed as follows:
Amount
OW
$60,000 x 20% = $12,000
AW
$42,000 x 20% = $8,400
Total CPF Relief allowed for YA 2018
= $20,400 ($12,000 + $8,400)
Mr Heng is 61 years old. His compulsory employee CPF contribution rate is 7.5%. He received the following income in 2017:
$7,000 x 12 months = $84,000
$10,000
$102,000 - (A) = $102,000 - $72,000 = $30,000
$72,000 (A) The OW ($84,000) has exceeded the OW Ceiling ($72,000). OW subject to compulsory CPF contribution is capped at $72,000 .
The AW ($10,000) is subject to compulsory CPF contributions as the AW has not exceeded the AW Ceiling ($30,000).
Mr Heng's CPF Relief for YA 2018 is computed as follows:
$72,000 x 7.5% * = $5,400
$10,000 x 7.5% * = $750
= $6,150 ($5,400 + $750)
*Mr Heng is subject to 7.5% employee CPF contribution rate as he is between 60 to 65 years old.
Ms Cheong is 29 years old. Her compulsory employee CPF contribution rate is 20%. Her last date of employment was 30 Nov 2017. She received the following income in 2017:
Employment Period:
$7,000 x 11 months = $77,000
Jan to Nov 2017 = $6,000 x 11 months =$66,000 (A)
$102,000 - (A) = $102,000 - $66,000 = $36,000
$66,000 (A) The OW ($77,000) has exceeded the OW Ceiling ($66,000). The OW subject to compulsory CPF contribution is capped at $66,000 .
$36,000 The AW ($45,000) has exceeded the AW Ceiling ($36,000). The AW subject to compulsory CPF contribution is capped at $36,000 .
Ms Cheong's CPF Relief for YA 2018 is computed as follows:
$66,000 x 20% = $13,200
$36,000 x 20% = $7,200
= $20,400 ($13,200 + $7,200)
Mr Tan is 35 years old. His compulsory employee CPF contribution rate is 20%. His last date of employment was 31 Aug 2017. He received the following income in 2017:
Total wages for the year 2017
$7,000 x 8 months = $56,000
$19,000
OW & AW ceiling
Jan to Aug 2017
= $6,000 x 8 months
= $48,000
$102,000 - (A)
= $102,000 - $48,000
= $54,000
$48,000 (A)
The OW ($56,000) has exceeded the OW Ceiling ($48,000). The OW subject to compulsory CPF contribution is capped at $48,000 .
The AW ($19,000) is subject to compulsory CPF contributions as it has not exceeded the AW Ceiling ($54,000).
His CPF Relief for the Year of Assessment 2018 is computed as follows:
$48,000 x 20% = $9,600
$19,000 x 20% = $3,800
= $13,400 ($9,600 + $3,800)
Andrew is 30 years old. He made voluntary contributions to his Medisave Account in 2017. His CPF Relief for the Year of Assessment 2018 is computed as follows:
$95,000
Compulsory CPF contributions made by Andrew's employer
17% x $95,000 cap
= $16,150
Compulsory CPF contributions by Andrew as an employee
20% x $95,000 cap
= $19,000
Total Contribution by Andrew and his employer
= $35,150
($16,150 + $19,000)
Annual CPF contribution cap
$37,740
Voluntary cash contribution directed by Andrew to his Medisave Account
$3,500
Maximum tax relief allowed on voluntary contribution made by Andrew to his Medisave Account
$2,590
($37,740 - $35,150)
Total CPF Relief allowable to Andrew
= $21,590
($19,000 + $2,590)
No
Yes
If your employer is one of the participants of the Auto-Inclusion Scheme for Employment Income , you do not need to claim this relief.
We will automatically grant you this relief based on the information sent to us by your employer.
Form B1
Complete item 6(f) on page 2 of Form B1.
Form B
Complete item 6(f) on page 3 of Form B.
If you have filed online, you may re-file within 14 days of your previous submission or by 18 Apr 2018, whichever is earlier. You can only re-file once.
When you re-file, you must include all your income details and expenses, donations and relief claims, where applicable. Once you have re-filed successfully, your new submission will override the previous submission.
If you could not re-file or you filed a paper tax return, please email us, with the following details/documents:
IRAS will automatically grant you this relief based on the information sent to us by your employer.
Please file an objection within 30 days from the date of your tax bill using the “Objection to Assessment” e-Service in myTax Portal.
If you are unable to use the e-Service, you may email us, with the following details/documents:
There will be no refund for accepted voluntary CPF contributions. As such, taxpayers who make voluntary CPF contributions on or after 1 Jan 2017 should note that the overall personal income tax relief cap of $80,000 applies from YA 2018 (when the income earned in 2017 is assessed to tax). Hence, you should evaluate whether you would benefit from tax relief on your voluntary CPF contributions, and make an informed decision accordingly.