Compulsory MediSave on trade income.
Compulsory MediSave
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Effective rate
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Your breakdown
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The one CPF bill freelancers cannot skip
If you draw income from a trade, a gig, or your own one-person business in Singapore, you are not on the payroll, so no employer is paying CPF for you and you make no Ordinary Account or Special Account contributions by default. What you cannot avoid is MediSave. Once your annual net trade income passes $6,000, the CPF Board levies a compulsory MediSave contribution, and IRAS will not finalise your tax assessment until it is settled. This tool tells you that figure for the current year so there are no surprises when the bill lands.
Net trade income, not revenue
The single most common mistake I see is people applying the rate to their gross billings. The contribution is charged on net trade income, which is revenue after allowable business expenses. A designer who invoices $90,000 but spends $30,000 on software, a co-working desk, and subcontractors has net trade income of $60,000, and that $60,000 is the base. Get your expense claims right first, because over-stating income here costs you real money, and under-stating it invites questions from IRAS later.
A 36-year-old consultant earning $60,000 net
Take a self-employed consultant in the 35 to 44 band with $60,000 of net trade income. The rate that applies is 9 percent. Because $60,000 sits well below the income level at which the contribution would hit the annual ceiling, the calculation is the straight product, and the effective rate equals the headline 9 percent.
Why the rate climbs with age
The rate steps up from 8 percent below 35 to 10.5 percent from 50, and it is deliberate. MediSave funds your share of hospital bills, MediShield Life premiums, and approved outpatient treatment, and older members have fewer working years left to top it up, so the system front-loads less and asks more later. Above a certain income the contribution is capped at the annual MediSave ceiling, currently $37,740, which is also the wider CPF annual limit, so a very high earner does not pay an unbounded amount. The money is genuinely yours: it sits in your MediSave account and earns the CPF MediSave interest rate, currently a floor of 4 percent a year.
Two questions freelancers ask
Can I pay it monthly instead of one lump sum?
Yes. Many self-employed people set up the GIRO arrangement with the CPF Board and contribute throughout the year as income comes in, which spreads the cost and avoids a single large debit after you file. If you under-pay during the year, the balance is reconciled once your net trade income is assessed. Paying as you go also makes cash-flow planning far easier than scrambling for the full amount at filing time.
Does the MediSave I pay reduce my income tax?
It does. Compulsory MediSave paid as a self-employed person qualifies for tax relief, unlike an employee whose CPF is simply excluded from taxable wages. So the $5,400 above is both a contribution to your own medical savings and a deduction against your trade income. If you have spare cash you can also make voluntary contributions to all three accounts up to the CPF annual limit for additional relief, which a separate calculator on this site works through.
What happens if I do not pay?
MediSave is a legal obligation, not an optional top-up, so it cannot simply be ignored. The CPF Board can recover unpaid contributions, and because IRAS and CPF share self-employed income data, an outstanding MediSave liability can hold up your tax matters and your ability to renew certain business or work-related approvals. If your income has dipped and you genuinely cannot pay the full amount at once, the right step is to contact the CPF Board about an instalment plan rather than letting it lapse. The obligation is sized to your assessed net trade income, so an honest, accurate income declaration is also what keeps the bill fair.