What are the compulsory MediSave contribution rules for self-employed persons in Singapore?

All self-employed persons (SEPs) in Singapore who earn a net trade income (NTI) exceeding S$6,000 per year are legally required to contribute to their CPF MediSave Account. This ensures SEPs have healthcare savings for medical needs.

How contributions are computed:

Your MediSave contribution is calculated based on your age and NTI. The NTI is your gross trade income minus allowable business expenses and capital allowances.

Contribution rates by age (applied to NTI):

• Below 35 years: 8% of NTI
• 35 to below 45 years: 9% of NTI
• 45 to below 50 years: 10% of NTI
• 50 and above: 10.5% of NTI

Contribution caps:

• The maximum MediSave payable is subject to the applicable CPF contribution cap.
• MediSave contributions are capped when your MA balance reaches the Basic Healthcare Sum (BHS) of S$71,500 (for those turning 65 in 2024).

When to pay:

• IRAS computes your MediSave liability based on your filed income tax return and issues a Notice of Computation of CPF Contributions alongside your tax assessment.
• Payment is due within 30 days of the notice.
• You can pay via GIRO, PayNow, or at AXS/SAM machines.

Consequences of non-payment:

• Late payment attracts interest of 1.5% per month on the outstanding amount.
• The CPF Board may take enforcement action, including recovering contributions through your bank accounts or referring the case for prosecution.
• Persistent defaulters may face fines and imprisonment.

Tax deduction benefit: Compulsory MediSave contributions are automatically deducted from your assessable income when computing income tax, reducing your tax liability.