Income Tax in Singapore: Calculating Your CPF Relief (2020)

This entry is one of three Income Tax Guides for Singaporeans on Wiki.sg. Part One explains how you should calculate your income tax. Part Two complies the Income Tax Reliefs that can potentially reduce how much tax you pay. Part Three explains how to calculate your CPF Reliefs.

The CPF savings scheme is a state-initiated retirement fund for Singaporeans. Kua Chee Siong / ST PHOTO.

Tax residents in Singapore who make compulsory contributions to their CPF accounts are eligible for CPF Reliefs. This entry highlights the Terms and Conditions of the CPF relief and how to calculate the claimable amount.

CPF Relief for Employees

This relief is for employed individuals who have made the compulsory monthly contributions to their CPF accounts. How much CPF relief you get is based on your (i) Ordinary Wage (OW) and (ii) Additional Wage (AW). The following sections illustrate the steps in calculating CPF reliefs.

Step 1. Calculate Your Ordinary & Additional Wages

Your Ordinary Wage is how much you made in a year before CPF deduction. Additional Wage consists of extra payments that are not your monthly salary - for example, year-end bonuses.

For Example

Catelyn is 29 years old. In 2019, she earned $7,000 a month (before CPF) in 2019. That year, she received a year-end bonus of $14,000. Her OW and AW for 2019 are as such.

	Ordinary Wage	Additional Wage
Amount	$84,000	$14,000
Formula	$7,000 x 12 months (No. of Months Worked)	-

Step 2. Find Out Your Annual Wage Ceilings

This will affect whether your relief will be limited to the wage ceiling. If your OW or AW exceed their respective wage ceilings, you are limited to a CPF relief amounting to 20% of the annual wage ceiling.

(i) Ordinary Wage Ceiling: $6,000 a month

(ii) Additional Wage Ceiling: Differs based on your salary

For Example

Considering that Catelyn worked for the whole of 2019, her OWC and AWC are as such.

	Catelyn's Ordinary Wage	Ordinary Wage Ceiling	Catelyn's Additional Wage	Additional Wage Ceiling
Amount	$84,000	$72,000	$14,000	$18,000
Formula	-	$6,000 x 12 months (No. of Months Worked)	-	$102,000* - $84,000 (Catelyn's Ordinary Wage) *This amount is the same for everyone
Conclusion	OWC exceeded		AWC not exceeded

With an OW of $84,000, Catelyn exceeded the $72,000 OWC. However, she did not surpass the AWC.

Step 3. Calculate Your Total Relief Amount

Your total CPF relief amount is the sum of what you can claim for your OW and AW.

For Example

	Ordinary Wage		Additional Wage
Terms	Catelyn's Ordinary Wage exceeds the Ordinary Wage Ceiling		Catelyn's Additional Wage did not exceed the Additional Wage Ceiling.
Amount Claimable	$14,400		$2,800
Formula	20% x $72,000 (Ordinary Wage Ceiling)		20% x $14,000 (Catelyn's Additional Wage)
Gross Amount Claimable	Under the above conditions, Catelyn is allowed to claim a CPF Relief valued at $17,200.
Formula	$14,400 (Amount Claimable for OW) + $2,800 (Amount Claimable for AW)

CPF Relief for Self-employed - Up to S$37,740*

* The CPF relief cap for self-employed persons are capped at 37% of S$102,000.

Self-employed persons will be automatically considered for this relief if they have an accessible net income for the year.

Type of Self-Employed Person	Terms	Can Claim	Cannot Claim
Fully Self-employed	CPF/ Medisave Contribution	Must have contributed to their employee CPF and/or Medisave	If you have no net income for the Year of Assessment.
	Claimable Amount	Amount to be capped at whichever is lower: (i) 37% of net trade income (ii) 37% of $102,000 - $37,740 (iii) Amount contributed to CPF/Medisave in cash
Self-employed but also an employee	CPF/ Medisave Contribution	Must have contributed to the following: (i) Compulsory employee CPF contribution (ii) Compulsory Medisave contribution as self-employed person (iii) Voluntary CPF contributions	-
	Claimable Amount	Up to $37,740	If your: Compulsory employee CPF contribution + Compulsory Medisave contribution (as a self-employed person) is more than $37,740.