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 following CPF reliefs 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). This section outlines how to calculate your CPF relief.

Step 1. Calculate Your Ordinary & Additional Wages

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

Step 2. Find Out Your Annual Wage Ceilings

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 (OWC): $6,000 a month / $72,000 a year

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

*Refer to the following section below for an example of how to calculate your 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.

Case study: Catelyn ($7,000 per month before CPF)

OW & AW

Catelyn is 29 years old. In 2019, she earned $7,000 a month (before CPF). That year, she also received a year-end bonus of $14,000. The following table shows Catelyn's OW, AW and their respective ceiling amounts.

	Ordinary Wage (OW)	Ordinary Wage Ceiling (OWC)	Additional Wage (AW)	Additional Wage Ceiling (AWC)
Amount	$84,000	$72,000	$14,000	$18,000
Formula	$7,000 x 12 months (No. of Months Worked)	$6,000 x 12 months (No. of Months Worked)	-	$102,000* - $84,000 (Catelyn's Ordinary Wage) *This amount is the same for everyone

(i) With an OW of $84,000, Catelyn exceeded the $72,000 OWC.

Hence, she can only claim 20% of $72,000.

(ii) Catelyn's Additional Wage did not surpass the $18,000 AWC.

Hence, she can claim 20% of her Additional Wage amount.

Gross Amount Claimable

The following table shows how much Catelyn is entitled to claim.

	Ordinary Wage		Additional Wage
Gross Amount Claimable	Catelyn can claim a CPF Relief valued at $17,200.
Amount Claimable	$14,400		$2,800
Formula	20% x $72,000 (Ordinary Wage Ceiling)		20% x $14,000 (Catelyn's Additional Wage)

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 a 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.