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For sole-proprietors/self-employed (freelancers, commission agents, taxi drivers,hawkers...)

Who needs to Contribute Compulsory Medisave Contributions 

  • How much Compulsory Medisave to Contribute
  • When to Contribute
  • How to Contribute
  • Voluntary Contributions to Medisave Account (VC-MA)
  • Amount of relief allowed for Voluntary Contribution to Medisave Account (VC-MA)
  • Illustration on Tax Relief for Voluntary Contributions to Medisave Account
  • Voluntary Contribution to Medisave Account (VC-MA) by companies
  •  

    Who needs to Contribute Compulsory Medisave Contributions

    It is compulsory for you to make Medisave contributions if you are:

    1. a self-employed person; and
    2. a Singapore citizen or Singapore permanent resident; and
    3. earning a yearly net trade income# of more than $6,000.

    # Net Trade Income is your gross trade income minus all allowable business expenses, capital allowances and trade losses as determined by IRAS.

     

    How Much Compulsory Medisave to Contribute

    The amount of Medisave that you have to contribute for the year depends on your age and income level.

    Table 1 & 2 below shows the Medisave contribution rates for self-employed persons for year 2014 and year 2015:

    Table 1 (For Year 2014)

    Yearly Net Trade Income

    Age as at 1 January

      Below 35 years 35 to below 45 years 45 to below 50 years 50 years and above

    Above $6,000 to $12,000

    3.50%

    4.00%

    4.50%

     4.75%

    Above $12,000 to $18,000

     3.50% to 7.00%

    4.00% to 8.00%

    4.50% to 9.00%

    4.75% to 9.50%

    Above $18,000

    7.00%

    8.00%

    9.00%

    9.50%

    Maximum

    $4,200

    $4,800

    $5,400

    $5,700

    Table 2 (For Year 2015) 

    Yearly Net Trade Income

    Age as at 1 January

      Below 35 years 35 to below 45 years 45 to below 50 years 50 years and above

    Above $6,000 to $12,000

    4%

    4.5%

    5%

     5.25%

    Above $12,000 to $18,000

     4% to 8%

    4.5% to 9%

    5% to 10%

    5.25% to 10.5%

    Above $18,000

    8%

    9%

    10%

    10.5%

    Maximum

    $4,800

    $5,400

    $6,000

    $6,300

    For example : If you are 37 years old as at 1 Jan 2015 and your net trade income is $65,000, you are required to contribute $5,400 (i.e. 9% x $65,000 BUT subjected to a capped at the max of $5,400) to your Medisave account.

     

    For more details on the Medisave contribution rates for other years, please refer to the CPF Board website.

     

    When to Contribute

    You have to make contributions to your Medisave account 30 days from the date you receive a "Notice of Computation of CPF Contributions (Medisave)" (NOC) from IRAS if you are not on the GIRO payment scheme with the CPF Board. If you have an arrangement with the CPF Board to pay your Medisave contributions by GIRO, then the payment will be according to the instalment plan issued by the CPF Board.

    Generally, you will receive the NOC from IRAS after your total income for the relevant Year of Assessment (YA) has been assessed.

    You may also contribute to your Medisave account at any time during the year.

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    How to Contribute

    Please contact the CPF Board to arrange for the payment of your Medisave.

    Voluntary Contributions to Medisave Account (VC-MA)

    You may claim tax relief in respect of voluntary contributions to your Medisave Account (VC-MA) if:

    1. You are a Singapore Citizen / Singapore PR; and
    2. You have made voluntary contributions to your Medisave Account in the previous year.

    This relief is allowed to any individual deriving any type of income (e.g. rental income, director's fees, etc.) in the year in which such voluntary cash contributions are made.

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    Amount of relief allowed for Voluntary Contribution to Medisave Account (VC-MA)

    The tax relief is limited to the lowest of the following:

    • Voluntary cash contribution directed specifically to Medisave Account;
    • Annual CPF contribution cap for the year less Mandatory Contribution (MC).
      MC refers to compulsory contribution by employee and his employer and compulsory Medisave Account for self-employed individuals;
    • Prevailing Basic Healthcare Sum (BHS)^, less the balance in Medisave Account before the voluntary cash contribution.

    Basic Healthcare Sum (BHS)^     

    With effect from

    Basic Healthcare Sum (BHS)^

     1 Jan 2016     

    $49,800

    1 Jul 2014

    $48,500

    1 Jul 2013

    $45,500

    1 Jul 2012

    $43,500

    1 Jul 2011

     $41,000

    1 Jul 2010

    $39,500

    1 Jul 2009

    $37,000

    Back to Top  ^ With effect from 01 January 2016, the Medisave Contribution Ceiling (MCC) would be renamed as Basic Healthcare Sum (BHS). To find out more about BHS, please refer to CPF Board Website

    Illustrations on Tax Relief for Voluntary Contributions to Medisave Account

    Example 1: Employee making voluntary contribution to Medisave Account

     

    Andrew is an employee who is 30 years old

    YA 2013 to YA 2015

    Total Wages

    $80,000

    Compulsory CPF contributions made by Andrew's employer

    16% x $80,000
    = $12,800

    Compulsory CPF contributions by Andrew as an employee

    20% x $80,000
    = $16,000

    Total Contribution by Andrew and his employer

    $12,800 + $16,000 = $28,800

    Annual CPF contribution cap $30,600
    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

    $1,800
    ($30,600 - $28,800)

    Total CPF relief allowable to Andrew $17,800
    ($16,000 + $1,800)


    Example 2: Self-employed individual making voluntary contribution to Medisave Account

     

    Bernard is a self-employed person who is 30 years old.

    YA 2013 to YA 2015

    Net trade income assessed by IRAS

    $60,000

    Compulsory Medisave contributions by Bernard as a self-employed individual based on his age and income

    $4,200
    Lower of $4,200 or ($60,000 x 7%)

    Annual CPF contribution cap

    $30,600

    CPF relief cap for Bernard as a self-employed individual

    $21,600
    Lower of $30,600 or (36% x $60,000)
    Voluntary cash contribution directed by Bernard to his Medisave Account
    $18,400

    Maximum tax relief that Bernard can claim on his voluntary cash contribution to Medisave Account

    $17,400
    ($21,600 - $4,200 = $17,400)

    Tax relief allowable on voluntary cash contribution made by Bernard to his Medisave Account $17,400
    Total CPF relief allowable to Bernard $21,600
    ($4,200 + $17,400)


    Example 3: Individual who is both employee and self-employed, making voluntary contribution to Medisave Account

     

    Charlie is an employee who is also a self-employed person who is 30 years old.

    YA 2013 to YA 2015

    Total Salary

    $40,000

    Net trade income assessed by IRAS

    $20,000

    Compulsory CPF contributions made by Charlie's employer

    $6,400
    (16% x $40,000)

    Compulsory CPF contributions by Charlie as an employee

    $8,000
    (20% x $40,000)

    Compulsory Medisave contributions by Charlie as a self-employed individual based on his age and income

    $1,400
    Lower of $4,200 or ($20,000 x 7%)

    Annual CPF contribution cap $30,600


    Voluntary contributions to CPF by Charlie as a self-employed individual

    $14,800
    ($30,600 - $6,400 - $8,000 - $1,400)
    Voluntary cash contribution directed by Charlie to his Medisave Account
    $5,000

    CPF relief cap for Charlie as a self-employed individual

    $7,200
    Lower of $30,600 or (36% x $20,000)

    Tax relief allowable on voluntary contribution to CPF made by Charlie as a self-employed individual

    $5,800
    restricted to ($7,200 - $1,400 = $5,800) or amount contributed ($14,800), whichever is lower

    Total CPF relief allowable to Charlie $20,200
    ($8,000 + $1,400 + $5,800 + $5,000)

     

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    Voluntary Contribution to Medisave Account (VC-MA) by companies

    Companies (e.g taxi companies) who have qualifying contracts (see FAQ 3) with self-employed persons (e.g taxi drivers) may make and claim tax deduction on, qualifying voluntary cash contribution to the Medisave Accounts (VC-MA) of the self-employed persons, subjects to conditions.

    For the tax treatment and filing requirements in respect of:

    (a) the self-employed person, see FAQs 5, 6 and 13; and
    (b) the company, see FAQs 5, 12 and 14.

    For more information on VC-MA made by companies, read the FAQ.

     

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    Last Updated on 6 May 2015


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