What the self-employed should know about their CPF contributions

Under the Self-Employed Scheme, self-employed individuals in Singapore have to fulfil several CPF contributions-related obligations. In this article, we cover:

1. The two CPF contribution schemes specific to the self-employed
2. Why you should make CPF contributions
3. Considerations before making a voluntary contribution

Understanding CPF contributions for self-employed individuals and freelancers

Unlike salaried employees, self-employed individuals do not have employers contributing to their CPF accounts. However, under the CPF Act, self-employed persons earning more than $6,000 in Net Trade Income (NTI) are legally required to contribute to their MediSave Account (MA), while other contributions, such as to the CPF Ordinary Account (OA) and Special Account (SA), remain voluntary.

Failure to contribute to MediSave can result in legal consequences under the CPF Act, including fines and possible imprisonment for first-time offenders, as well as restrictions on registering or renewing business licences with ACRA. 

Two CPF contribution schemes specific to the self-employed

1. Mandatory contributions into your MediSave Account (MA)
2. Voluntary CPF contributions

What are the mandatory MediSave contributions for self-employed persons?

The Government mandates self-employed MediSave contributions once you earn more than $6,000 in Net Trade Income (NTI) for the year. For many self-employed people, this means contributing as much as their employed peers. If you're unsure whether you have any MediSave payable, CPF's payable-status checker confirms this directly.

What is Net Trade Income (NTI)?

The Net Trade Income is derived from taking your gross trade income and deducting all allowable business expenses—examples of which are salaries and compulsory CPF contributions by the employer, and insurance policy premium for employees. The NTI is the figure you declare to IRAS in your annual income tax return, and this is also the same figure used to determine your mandatory MediSave contribution.

Here are the calculations for the CPF MA mandatory contributions based on two examples:

Example 1:

Age: 30 years old, NTI: $60,000, CPF MA mandatory contribution rate: 8%

CPF MA mandatory contribution = NTI × Contribution rate

= $60,000 × 8%

= $4,800

Example 2:

Age: 45 years old, NTI: $70,000, CPF MA mandatory contribution rate: 10%

CPF MA mandatory contribution = NTI × Contribution rate

= $70,000 × 10%

= $7,000

The principle behind this policy is that if you were to make a reasonable salary ($18,000 per annum, or $1,500 a month), you will have to contribute as much into your own MediSave as your peers who are employees, so that you squirrel away a sum of money for your own Integrated Shield Plan Premiums and any healthcare costs that you may incur. To find out your payable amount, simply use CPF's Self-Employed MediSave Contribution Calculator.

Benefits of mandatory MediSave contributions

One key advantage of mandatory MediSave contributions is the healthcare subsidies and support it provides. Contributions to MediSave ensure you have sufficient funds to cover medical expenses, including hospitalisation, surgery, and premiums for Integrated Shield Plans.

Additionally, MediSave contributions enable you to benefit from healthcare schemes such as MediShield Life, which offers comprehensive coverage for large hospital bills. This not only protects you in emergencies but also helps you avoid significant out-of-pocket costs in the future.

What are voluntary CPF contributions for self-employed persons?

Any voluntary CPF contributions made to CPF by the self-employed have to be allocated across all 3 CPF accounts (OA, SA and MA). The allocation ratios are the same as for employed CPF members.

Let’s say you are a 25-year-old self-employed person who decides to top up $10,000 through a voluntary CPF contribution. The money will be channeled to your CPF accounts in the following proportions:

• CPF OA: ~$6,217
• CPF SA: ~$1,621
• CPF MA: ~$2,162

Benefits of voluntary CPF contributions

Voluntary CPF contributions allow you to build up your savings for housing, retirement, and medical costs—mirroring the benefits enjoyed by salaried employees.

Earning annual interest of at least 2.5%, your OA can be used for housing schemes, such as financing your mortgage, while your SA accumulates savings for retirement at about 4% interest p.a.

Additionally, voluntary contributions grant tax relief, enabling you to lower your taxable income and thus reduce the amount of taxes owed.

Why should the self-employed make voluntary CPF contributions?

1. You get tax relief on voluntary CPF contributions

Voluntary CPF contributions qualify for tax relief, capped at the lowest of three limits: 37% of your assessed NTI, the CPF annual limit, or the actual amount you contribute. This limit is shared with your mandatory MediSave contributions — it isn't a separate allowance just for voluntary top-ups.

• 37% of your NTI assessed; or
• CPF annual limit of $37,740, less any relief already claimed on your mandatory MediSave contributions; or
• The actual amount you voluntarily contribute.

Here's how this plays out for a 30-year-old with $102,000 in net trade income (NTI), assuming no other tax reliefs.

Your mandatory MediSave contribution comes first: 8% of $102,000 works out to $8,160, but this is capped at $7,680 for the under-35 age band. That $7,680 is fully tax-deductible on its own, whether or not you make any voluntary top-up—it brings your taxable income down to $94,320, and your tax bill to around $4,997.

To reach the full $37,740 CPF annual limit—and unlock the rest of the available relief—you will need to voluntarily contribute a further $30,060, not $37,740. That's because your mandatory contribution has already used up part of the shared limit.

With that top-up, your taxable income falls to $64,260 and your tax bill to around $2,248 — a total saving of $3,632 compared to paying no CPF contributions at all. Measured against just the $30,060 you're voluntarily choosing to set aside — rather than the full $37,740, most of which you'd pay regardless — that's roughly a 9.1% in tax savings alone. That is on top of the other benefits stated below.

2. You can get higher interest rates on the CPF monies compared to bank rates

The monies in CPF yield attractive interest rates relative to bank interest rates. Also, for the first $60,000 in your CPF monies (with up to $20,000 from the OA), you will get an additional 1% interest for your CPF monies. That means you could get up to 3.5%–6% p.a. risk-free interest, compared to 0.05% p.a. interest of saving accounts. 

3. You will use the monies for housing, retirement, medical or investment purposes anyway

Most self-employed people have the same housing, retirement and medical needs as their employed peers, wanting to own a house, save up for retirement, and pay for their Integrated Shield Plan Premiums. It should not matter whether they do it with cash, or with CPF monies.

From that perspective, it makes more sense to do a voluntary contribution into your own CPF since the monies earn risk-free interests and can be used for housing, retirement, medical and investment purposes regardless, while enjoying tax reliefs. As the monies contributed is on a voluntary basis, the self-employed CPF member can have full control of the amount contributed.

4. Your CPF monies will be safe from debtors

As a business owner, you may be taking significant personal liability in your work and could be sued for Liquidated Damages. Any savings in the CPF are protected from creditors and/or the Official Assignee, regardless of how much you may have been sued for.

You will still be able to apply for the withdrawal of your CPF savings as an undischarged bankrupt when you turn 55 or under medical grounds. Putting money into your CPF is a great way to protect your retirement money from the risk of your own business.

Considerations before making a voluntary contribution

1. You could face liquidity concerns

When you have transferred money into your CPF, you cannot reverse the decision. For CPF OA and SA monies, the earliest you can withdraw it in cash is when you reach 55, and there are certain restrictions tied to it. Any transfer to CPF MA cannot be reversed, you can only use the MediSave funds for healthcare purposes.

If you plan to contribute to your CPF accounts, be very sure that you have sufficient liquid cash for short or mid-term expenses. Have your emergency funds in place, and be comfortable with the stability of your income before you commit to putting cash into your CPF.

2. Your ability to capitalise on business opportunities is reduced

Being a business owner and managing your business' finances may mean that you have opportunities to invest in equipment and working capital to grow your business more. Some of these opportunities may sporadically present itself and potentially yield higher returns than CPF’s.

Planning for retirement as a self-employed person

Being self-employed means more flexibility over how and when you work—but you also don’t get steady flows to your OA and SA each month. Beyond mandatory MediSave, it is worth considering making voluntary contributions to build your retirement nest egg.

Income is also less predictable, which makes it tempting to defer saving until things settle down. It is important to have the discipline to set aside separate pots of money for near-, mid-, and long-term use.

More freedom day-to-day means more discipline required to build the same retirement foundation an employee gets by default. Starting early, even modestly, is what closes that gap. To get started on your investing journey, feel free to speak to our MAS-licensed client advisors.

Frequently asked questions about CPF for self-employed persons

Do self-employed persons need to contribute to CPF?

Yes, if you are self-employed and earn more than S$6,000 in net trade income (NTI), you are required to contribute to your MA. Contributions to other CPF accounts (OA and SA) are voluntary but can be beneficial for retirement savings.

How do self-employed individuals contribute to CPF?

Self-employed individuals contribute to CPF first through their MA. This can be done electronically through the e-CPF portal or by setting up GIRO for a seamless process. The required contribution is based on your NTI, and voluntary contributions to other CPF accounts are also possible.

How much should I contribute to CPF as a self-employed person?

The required contribution to MediSave is determined by your NTI and age, starting at 4% for NTIs over S$6,000. Voluntary contributions to OA and SA are encouraged for those planning for retirement, as they offer additional savings opportunities.

What is the minimum CPF contribution for self-employed individuals in 2026?

The minimum MediSave contribution is 4% of your NTI once you earn above S$6,000, rising with income and age. Exact 2026 rates are set out in the CPF contribution table above.

What is a composition offer for self-employed individuals?

A composition offer is a settlement option provided to self-employed individuals who have defaulted on MediSave contributions. It allows them to resolve their outstanding payments by paying a reduced fine or penalty, thus avoiding legal action.