Finances

CPF Contributions 101 for Singapore Freelancers

All you need to know about this whole CPF scheme as a freelancer in Singapore.

Featured image for the "CPF Savings 101 for Singapore Freelancers" post. It features a pile of coins with shoots growing out of the top. Next to the coins are an alarm clock and a wooden toy house.

I don’t know about you, but the last time I really paid attention to CPF stuff was in secondary school social studies classes.

Even then, I think we only went very briefly into how there were 3 different accounts and what they were used for.

And like most other things you mug for exams, what we learnt went out the window after our exams ended.

But those happy carefree days have long passed. Now, as freelancers who have to fend for yourselves in the Real World, this “CPF stuff” is now a real thing for you.

And you have to know how to navigate it, because your retirement may depend on it.

So in this comprehensive guide, I’ll be giving you a crash course on Singapore’s CPF scheme – tailored specially for freelancers. You’ll learn:

  • How does being a freelancer affect the contributions to your CPF accounts?
  • Is it compulsory for freelancers to top up their CPF accounts? If it isn’t, should you?
  • How can you top up your CPF accounts?
  • What other miscellaneous CPF things will you need to take note of, as a freelancer?

And of course, along the way you’ll also learn about the 3 types of CPF accounts, what they’re for and what their interest rates are. #BackToSecondarySchool

Ready? Let’s get started.

Content Menu

  1. As a Freelancer, You’ll Need to Top Up Your CPF Accounts Yourself
  2. Must You Top Up Your CPF Accounts?
  3. Should You Make Contributions to Your Ordinary and Special Accounts?
  4. How to Top Up Your Ordinary and Special Accounts
  5. Miscellaneous Things to Take Note Of

As a Freelancer, You’ll Need to Top Up Your CPF Accounts Yourself

Here’s the first thing you need to know:

Unlike your employee friends, you will not have any CPF contributions from your employer.

I mean, as a self-employed person, you don’t even have an employer in the first place.

Therefore, you will need to top up your CPF accounts by yourself.

Must You Top Up Your CPF Accounts?

Everyone starts off with 3 CPF accounts:

Name of CPF AccountWhat It’s Used For
Ordinary AccountPay for housing, insurance, investment and education
Special AccountPay for financial products relating to old age and retirement
Medisave AccountPay for hospitalisation and approved medical insurance

The 2 rules when it comes to CPF contributions for freelancers are:

  1. RULE 1: Contributing to your Ordinary and Special Accounts is optional.
  2. RULE 2: Contributing to your Medisave Account is compulsory as long as you are earning more than $6,000 a year.

Unless you’re freelancing on an ad hoc basis, you’re likely to be making more than $6,000 a year and will therefore need to contribute to your Medisave Account.

How much must you contribute to your Medisave Account?

Your Medisave contribution amount is calculated based on:

You can find the calculation formulas used on the CPF Board website. However, you’ll probably find it more convenient to use their Self-Employed Medisave Contribution Calculator.

Alternatively, you can check your actual outstanding Medisave liability using the CPF Board’s “Check your outstanding Medisave Liabilities and Payment Status” e-Service.

What’s the deadline for making your Medisave contribution?

  • If the Inland Revenue Authority of Singapore (IRAS) has previously sent you a Notice of Assessment (i.e. your tax bill), you will have to make your Medisave contribution within 30 days of receiving a Notice of Computation of CPF Contributions (Medisave) from IRAS.
  • If IRAS hasn’t previously sent you a Notice of Assessment, then you will have to make your Medisave contribution by 31 May of the following year.

How can you make your Medisave contributions?

To make your compulsory Medisave contribution, log into the my cpf online service and select “My Requests > Self-Employed Matters > Make contributions to 3 CPF Accounts or Medisave Account”. You will need to use your SingPass to login.

You will then be able to make the contribution through eNETS debit payment. Be sure to select “Contribute to my Medisave” in the “Payment for” field.

If you see “Contribute to my Medisave (Tax deductible)” instead, this means that you haven’t selected “Self-Employed” in the “Paying as a” field. Be sure to change the selection from “Member” to “Self-Employed”!

Screenshot of the Medisave contribution page in the my cpf online service.

If you’d rather not make payment via eNETS, you can also make payment via:

  • GIRO
  • NETS
  • Cheque
  • Cash (at SingPost branches)

For more information on each of these payment methods, check out the CPF Board’s Self-Employed Scheme webpage and click on the “What are the payment modes available?” question.

Must you pay the entire Medisave contribution in one shot?

If you’re unable to make your Medisave contributions in full, you can pay them in monthly instalments. Use the Self-Employed Medisave Instalment Calculator on the CPF Board website to calculate the monthly instalment amount.

To pay your Medisave contribution in instalments, log into the my cpf online service and select “My Requests > Self-Employed Matters > Contribute to my Medisave in instalments”.

Screenshot of the Medisave instalment payment page in the my cpf online service.

Should You Make Contributions to Your Ordinary and Special Accounts?

To recap the 2 rules of CPF contributions for freelancers:

  1. RULE 1: Contributing to your Ordinary and Special Accounts is optional.
  2. RULE 2: Contributing to your Medisave Account is compulsory as long as you are earning more than $6,000 a year.

Since you’re free to decide whether to contribute to your Ordinary and Special Accounts, should you do so? Let’s weigh the pros and cons. Pros first:

Benefit #1: You help yourself save for retirement

Apart from your Ordinary, Special and Medisave Accounts, you will also get a Retirement Account when you turn 55. When this happens:

  • You can transfer money from your Ordinary and Special Accounts to your Retirement Account. This amount of money is known as the Retirement Sum and will be returned to you through monthly cash payouts.
  • You can withdraw the money in your Ordinary and Special Accounts. How much you can withdraw depends on whether you have already transferred the Retirement Sum to your Retirement Account.

For more details on the Retirement Sum amount, refer to the CPF Board’s Retirement Sum Scheme webpage.

As much as you may love your work, there will come a time where you’ll have to retire. You’ll need to ensure you have sufficient savings to pay for your daily expenses when that happens.

Therefore by making contributions to your Ordinary and Special Accounts, you will be setting aside money for retirement. This is especially since money deposited into your CPF accounts is very difficult to spend before you turn 55, as I’ll discuss later.

Benefit #2: You get better interest rates than leaving your money in the bank

I haven’t mentioned this yet, but the money in your CPF accounts earn interest.

The current interest rates are:

Name of AccountYearly Interest Rate
Ordinary AccountUp to 3.5%
Special AccountUp to 5%
Medisave Account
Retirement Account

If you’re above 55 years old, you’ll get an extra 1% interest on the first $60,000 of your combined account balances too.

Read more about CPF interest rates here.

Now, check the interest rate your bank is giving you for your savings account.

It’s probably not even 1%, right?

So if you were to park your money in your CPF accounts, you would be able to earn more interest compared to if you were to put the same amount of money in the bank!

Benefit #3: You can use your CPF contributions to reduce your income tax liability

The IRAS has a CPF Relief for Self-Employed scheme where freelancers can reduce their income tax liability by the amount that they’ve contributed to their 3 CPF accounts.

To be eligible, you must have made:

  • Your compulsory Medisave contributions
  • Voluntary CPF contributions

You can read more about this scheme here.

Think of it this way: whether you choose to make voluntary contributions to your Ordinary and Special Accounts or to pay the same amount as income tax, your money will still be going to the government.

BUT you can choose whether to use the money to pay for your retirement expenses (i.e. through making CPF contributions), or to fund government expenditure (i.e. through paying income tax).

Note: there is a cap on the maximum amount of income tax you can offset using this scheme. More details on the limits can be found on IRAS’ CPF Relief for Self-Employed scheme webpage.

Now let’s discuss the possible cons of making contributions to your Ordinary and Special Accounts:

Drawback #1: You cannot withdraw your contributions as and when you please

Once you put money into your CPF accounts, you can’t just withdraw it for spending whenever you like. You can only start cashing it out when you turn 55.

Until then, you can use the money in your Ordinary and Special Accounts to pay for only certain specific items. For example:

  • Ordinary Account money to pay for housing
  • Special Account money to pay for Singapore government bonds

If you waltz into an IMAX 3D cinema and try to pay for your movie tickets with your Ordinary or Special Account money, you’ll be out of luck.

Therefore if you intend to contribute to your CPF accounts, be very sure that you can afford to do so.

For example, if you need the extra cash to tide yourself over the next few months or pay for your upcoming holiday, perhaps you want to hold off contributing to your Ordinary and Special Accounts for the time being.

Drawback #2: You may be able to obtain better interest rates elsewhere

This drawback applies if you intend to use your CPF accounts as a means of investing your money.

As mentioned earlier, your CPF accounts’ interest rates are likely to be better than what banks are offering their savings account schemes. However, you may be able to obtain even better interest rates if you put your money in other investments.

Common investment schemes include investments in:

  • Shares
  • Real estate
  • Gold

That said, with such higher potential rates of return come potentially higher risks. Unlike putting your money in your CPF accounts, the chances of you losing your money in such investments are much higher. Are you able to take on such risk?

You will need to have some knowledge and skill in order to manage your investments properly. This is not to mention the time (and possibly “tuition fees”) you’ll likely need to spend in order to acquire such knowledge and skill.

This will take time away from your freelancing business, so think about whether you can afford to do so.

In short, using your CPF accounts as a mode of investment could be a good option if you:

  • Want a very hands-off approach to investing (because you don’t need to do anything apart from putting your money in), and/or
  • Are not comfortable with taking on more risk

But if you think you have the talent and time to make your money work even harder for you, go for it.

How to Top Up Your Ordinary and Special Accounts

To recap the pros and cons discussed above, consider carefully before deciding whether to voluntarily top up your Ordinary and/or Special Accounts.

Doing so is a huge commitment and you will not be able to readily spend money in your CPF accounts should you need to do so, even if you are getting higher interest rates for it.

For now, let’s assume you’ve decided to go ahead. There are 2 main schemes for doing so:

  1. Topping Up All 3 Accounts at One Go
  2. Topping Up Just Your Special Account

1. Topping Up All 3 Accounts at One Go

If you were thinking of topping up just your Ordinary Account and not your Special Account, unfortunately that’s not possible.

If you want to top up your Ordinary Account, you’ll have to also top up your Special Account AND your Medisave Account. The CPF Board calls this the Voluntary Contribution scheme.

How much can you contribute to each CPF account?

So first, you decide how much money you want to deposit into all 3 of your CPF accounts as a whole. This sum of money will then be split among your 3 CPF accounts.

You can’t decide how much should go into each account as this will be determined by the current allocation rates for your age group. You can check the allocation rates here.

Generally however, money is allocated to your Medisave Account first, followed by your Special Account. The balance is channelled to your Ordinary Account.

You can use the CPF Contribution Allocation Calculator on the CPF Board website to calculate how your voluntary contribution will be split among your 3 CPF accounts.

What’s the maximum contribution that you can make?

Currently, the max amount of money that you can put in your CPF accounts (through both compulsory and voluntary contributions) is $37,740.

In other words, the total amount of money you can voluntarily contribute is $37,740 minus the amount of compulsory contributions you have already made.

How to top up all 3 CPF accounts

To make the voluntary contribution, you first have to apply to make voluntary contributions to your CPF accounts.

To do so, log into the my cpf online service and select “My Requests > Self-Employed Matters > Make / Cancel voluntary contributions to My CPF Accounts”.

After you have successfully applied to make voluntary contributions, you can then start topping up your CPF accounts. From the my cpf online service, select “My Requests > Self-Employed Matters > Make contributions to 3 CPF Accounts or Medisave Account”.

You will then be able to make your contributions through eNETS debit payment. Be sure to select “Contribute to my three CPF accounts” in the “Payment for” field.

If you see “Contribute to my three CPF accounts (Non-tax deductible)” instead, this means that you haven’t selected “Self-Employed” in the “Paying as a” field. Be sure to change the selection from “Member” to “Self-Employed”!

Screenshot of the CPF account contribution page in the my cpf online service.

2. Topping Up Just Your Special Account

If you want to top up just your Special Account, you can do so via the Retirement Sum Topping-Up Scheme. You don’t need to prepare any supporting documents when making the top-up.

How to top up your Special Account

To top up your Special Account, log into the my cpf online service and select “My Requests > Building Up My / My Recipient’s CPF savings > Using Cash > Contribute to my / my recipient’s Special Account via”. You can make payment via:

  • eNETS debit payment
  • OCBC Internet Banking
  • Cheque

Screenshot of the Special Account contribution page in the my cpf online service.

Alternatively, you can also make payment through ATM card at an AXS machine, or GIRO. For more information on these payment modes, go to the CPF Board’s Retirement Sum Topping-Up Scheme webpage and click on the “How do I make a CPF or cash top-up to build up my retirement savings?” question.

How to check whether your Special Account top-up is successful

You will not receive any acknowledgement after making the application to top up your Special Account.

However, you can check your transaction records via the my cpf online service after 5 working days (for e-transactions) or 7 working days (for manual transactions).

From the my cpf homepage, select “My Statement” and navigate to Section B: “Transaction and Contribution History”.

Screenshot of the check transaction history section in the my cpf online service.

Pro tip: top up earlier in the year

Top-ups made earlier in the year will earn more interest compared to top-ups made later in the year.

This is because your Special Account money will earn interest every month. So the earlier you put your money into your Special Account, the more interest you’ll earn. (This is even though the interest is only credited to your account, and compounded, in December.)

TL;DR: Make your top-up earlier in the year if you can.

Topping up your Special Account is a one-way transaction

You cannot undo any top ups made to your Special Account under the Retirement Sum Topping-Up Scheme, so be very sure that you want to proceed!

Miscellaneous Things to Take Note Of

Register Yourself with the CPF Board If You Aren’t Already Registered

Freelancers are required to register with the CPF Board as a self-employed person when they begin freelancing.

You’ll know if you aren’t registered if you try to carry out any CPF transaction for self-employed persons (such as those mentioned above) in the my cpf online service and you get an error message telling you that you haven’t registered.

Screenshot of the error message in the my cpf online service stating that the user has not registered as a self-employed person. It reads "You are not registered as a self-employed person with the Board. To continue with this transaction, please click here to register as a self-employed person."

To register yourself, log into the my cpf online service and select “My Requests > Self-Employed Matters > Register as a Self-Employed”.

Screenshot of the Self-Employed Person registration page in the my cpf online service.

If you need a certain licence(s) in order to carry out your freelancing business, you don’t need to register yourself. The CPF Board will automatically register you. You’ll be informed of the registration in writing.

What if you decide to stop freelancing?

If you’ve decided to stop freelancing, de-register yourself as a self-employed person with the CPF Board.

You can do so by logging into the my cpf online service and selecting “My Requests > Self-Employed Matters > Declare my non Self-Employed / Informal worker status”.

Screenshot of the Self-Employed Person de-registration page in the my cpf online service.

Apart from Contributing to Your CPF, Continue to Keep Saving

Settling your CPF contribution strategy doesn’t mean you can let go and spend all of the remaining money you earn.

You’ll need to save for rainy days, or for that big-ticket item you’re eyeing, or in case work temporarily dries up and you’ll need some savings to dip into.

Remember that money put into your CPF accounts is very difficult to take out early!

Recap

Phew, this has been a massive article. Here’s a recap of what we’ve covered in it:

  • Your situation. As a freelancer, you don’t have an employer who will help contribute to your CPF accounts. You’ll need to make the contributions yourself.
  • Must you top up your CPF accounts? Contributing to your Medisave account is compulsory (if you earn more than $6,000 a year). However, contributing to your Ordinary and Special Accounts is optional.
  • Should you contribute to your Ordinary and Special Accounts? This really depends. Do you want the income tax savings? Can you afford to set aside the money? Do you think you’ll think you’ll be able to get better interest rates elsewhere? These are questions which you’ll have to answer yourself.
  • How to top up your Ordinary and Special Accounts. There are 2 schemes: topping up all 3 accounts (Ordinary, Special and Medisave) together, or just your Special Account. Take your pick.
  • Miscellaneous info. For example, if you aren’t already registered with the CPF Board, be sure to do so. And do continue to build your own pool of savings apart from what you’ve deposited into your CPF accounts.

Now that you know what Your CPF Situation as a Freelancer is, you should be more aware of your compulsory obligation to contribute to your Medisave and how you can make the contribution.

You should also have a better idea of how you can leverage on your Ordinary and Special Accounts to save for retirement (or not, if you decide to put your money in other investment schemes instead!)

But having all this knowledge isn’t going to help unless you put what you know into action. Take some time off your freelance work schedule to decide on your CPF strategy moving forward, and then set up your contributions as necessary.

After all, complying with your contribution obligations is only one part of the picture. You’re also safeguarding your retirement.

Do you have any CPF contribution tips to share? Leave a comment!

Tan Siew Ann
I’m a freelance writer for some of the most amazing software businesses in the world. On this blog, I share tips on how you, too, can run a sustainable and meaningful freelance business. Let’s forge your freedom. 💪

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