Self-employed persons who may also be employees are allowed relief on contributions made to their CPF accounts to reduce tax payable.
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Qualifying for CPF relief
To qualify, the self-employed person (who may also be an employee) must have contributed to any of the following in the year preceding the Year of Assessment:You will be automatically allowed self-employed CPF relief if you have assessable net trade income.
Amount of CPF relief
CPF relief cap for self-employed persons
| Year of Assessment | 2013 to 2015 | 2016 | 2017 to 2024 |
|---|---|---|---|
Net trade income ceiling | $85,000 | $85,000 | $102,000 ($6,000* x 17 mths) |
CPF contribution rate | 36% | 37% | 37% |
CPF relief cap | $30,600 | $31,450 | $37,740* (37% x $6,000 x 17 mths) |
*As announced in Budget 2023, the current CPF monthly salary ceiling of $6,000 will be increased to $8,000 in four phases starting from 1 September 2023.
| Period | CPF monthly salary ceiling |
| 1 September 2023 to 31 December 2023 | $6,300 |
| 1 January 2024 to 31 December 2024 | $6,800 |
| 1 January 2025 to 31 December 2025 | $7,400 |
| On or after 1 January 2026 | $8,000 |
Notwithstanding the increases to the CPF monthly salary ceiling starting from 1 September 2023, the CPF annual salary ceiling will remain at $102,000. The CPF annual limit will also remain at $37,740 (37% x $102,000).
CPF contributions by a self-employed person
You are a self-employed person who has made compulsory MediSave contributions and voluntary CPF contributions in the year 2023.
For YA 2024, your tax relief for your MediSave and voluntary CPF contributions will be capped at the lowest of:
- 37% of your net trade income assessed; or
- CPF relief cap of $37,740; or
- Actual amount contributed by you in the year 2023.
No CPF relief will be allowed in respect of your compulsory MediSave or voluntary CPF contributions made in 2023 if you have no assessable net trade income for the Year of Assessment 2024.
CPF contributions by a self-employed person who is also an employee
You are an employee as well as a self-employed person who has made the following contributions in the same year:
- Compulsory CPF contributions as an employee;
- Compulsory MediSave contributions as a self-employed person; and
- Voluntary CPF contributions.
If your total compulsory CPF contributions as an employee and your compulsory MediSave contributions as a self-employed person is less than the CPF relief cap for self-employed persons, your tax relief for the voluntary CPF contributions will be capped at the prevailing CPF contribution rate for the year.
If your total compulsory CPF contributions as an employee and compulsory MediSave contributions as a self-employed person is more than the CPF relief cap for self-employed persons, no tax relief will be allowed for your voluntary CPF contributions, as the total compulsory CPF contributions as an employee and compulsory MediSave contributions as a self-employed has exceeded the CPF relief cap.
Claiming relief
CPF relief is allowed based on the date of payment. For example, to claim for the CPF relief in the Year of Assessment 2024, you must have made the contribution by 31 Dec 2023.
If you have made MediSave contributions or voluntary CPF contributions during the year, the relief will be automatically allowed in the following year.
If you are both a self-employed person and an employee, please make your own MediSave contributions as a self-employed person separately by using the online form 'E-Payment to Medisave Account'.
For more information on how to make MediSave contributions or voluntary CPF contributions, please visit CPF Board website.
A personal income tax relief cap of $80,000 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. You should therefore evaluate whether you would benefit from tax relief on your voluntary CPF contributions and make an informed decision accordingly.
There will be no refund for accepted voluntary CPF contributions. You should therefore evaluate whether you would benefit from tax relief on your voluntary CPF contributions and make an informed decision accordingly.