CPF Top-up Limit and Tax Relief Limit
Tony
January 01, 2019
Singaporeans and PRs are compulsory to contribute to CPF. For employees, it is mandatory to contribute to CPF together with the employer every month. For self-employed persons, it is mandatory to contribute to CPF Medisave account every year, according to the person’s net trade income in the year. Asides from these mandatory contributions, people can voluntarily contribute to their own CPF accounts, with the purpose such as to relief income tax. There are three ways to top up to your CPF accounts. Here is a summary of the top-up limit and tax relief limit of these three methods. Except specific indications, all the information below is updated as of 31 Dec 2018.
Method 1: Top up to CPF Ordinary Account, Special Account and Medisave Concurrently
If you are an employee, the annual top-up limit of this method is:
$37,740 – The Mandatory Contribution from You and Your Employer This Year
There is no tax relief for this top-up method.
If you are a self-employed person, the annual top-up limit of this method is:
$37,740 – The Mandatory Contribution to Your Medisave This Year
For this top-up method, the tax relief limit for your contributed amount is:
37% of Your Net Trade Income This Year – The Mandatory Contribution to Your Medisave This Year
Method 2: Top up to CPF Medisave Only
The annual top-up limit is the lower of (a) and (b) below:
(a).$37,740 – Your Mandatory Contribution to CPF This Year
(b).Basic Healthcare Sum – Your Current CPF Medisave Balance
Note: For CPF members aged 65 and below, the Basic Healthcare Sum is $57,200 in 2019.
The top-up amount with this method is all tax deductible.
Method 3: Top up to CPF Special Account or Retirement Account Only
Before your age 55, you can top up to your CPF Special Account only. The top-up limit is:
Current Full Retirement Sum – Special Account savings – Amount withdrawn from Special Account for investments
Note: The Full Retirement Sum in 2019 is $176,000.
The annual tax relief under this top-up method is up to $7,000.
On and after your age 55, you can top up to your CPF Retirement Account only. The top-up limit is:
Current Enhanced Retirement Sum – Retirement Account savings
The annual tax relief under this top-up method is up to $7,000, or (Current Full Retirement Sum – Retirement Account savings), whichever is lower.
Note: The Enhanced Retirement Sum in 2019 is $264,000. The Full Retirement Sum in 2019 is $176,000.
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