Can I Put Money Into A Defined Contribution Fund In Order To Lower Myincome And Taxes?
Claim tax relief for topping up your own CPF Special/Retirement Account or those of your family members to meet basic retirement needs.
On this page:
Qualifying for relief
CPF Cash Top-up Relief is given to encourage Singaporeans and Permanent Residents to set aside money for retirement needs either in their own CPF accounts or those of family members.
To qualify for the tax relief for Year of Assessment 2022, you must:
1. be a Singapore Citizen/Permanent Resident; and
2. have made cash top-ups in 2021 under the CPF Retirement Sum Topping-Up Scheme.
| Cash top-ups made to | Other condition(s) |
|---|---|
| Self (By you and/or your employer)
| Not applicable |
* Incapacitated because of physical or mental infirmity. | Not applicable |
| Spouse/Siblings must not have an annual income** of more than $4,000 in the year preceding the year of top-up (i.e. 2020). ** Annual income includes:
|
For each Year of Assessment, a personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed (including any relief on cash top-ups made).
There will be no refund for accepted cash top-up monies. Please evaluate whether you would benefit from tax relief on your cash top-up before you make an informed decision on whether to make a cash top-up.
Top-up through transfer of funds
The tax relief is only for cash top-ups. The relief does not apply when the top-up is carried out by transferring funds from your own CPF Account to your own or a family member's Special/Retirement Account.
For more information on the procedures for topping-up the Special/Retirement Accounts under the CPF Retirement Sum Topping-Up Scheme, please visit the CPF website.
Example 1: Income threshold of spouse
In 2021, Mr Lee made a CPF cash contribution of $7,000 to his wife's Special Account. His wife's annual income in 2020 was $5,000. Mr Lee will not be able to claim for CPF Cash Top-up Relief as his wife had an annual income of more than $4,000 in the preceding year (i.e. 2020) to the year of top-up (i.e. 2021).
| Top-up amount to wife's Special Account in 2021 | $7,000 |
|---|---|
| Wife's annual income in 2020 | $5,000 |
| CPF Cash Top-up Relief for Year of Assessment 2022 | $0 |
Amount of relief
The maximum CPF Cash Top-up Relief per Year of Assessment is $14,000 (maximum $7,000 for self, and maximum $7,000 for family members).
| Amount of cash top-up to own or family members' CPF Special/Retirement Account | Maximum allowable relief Allowable relief amount will also be subjected to Full Retirement Sum (FRS) |
|---|---|
| Below $7,000 | Exact amount of cash top-up |
| $7,000 or more | $7,000 |
Limit on cash top-up amount for computing tax relief
In addition, there is a limit on the amount of cash top-up that qualifies for tax relief.
| Age of recipients | Limit on cash top-up amount for computing tax relief |
|---|---|
| For recipients below age 55 | Current Full Retirement Sum (FRS) – Special Account (SA) savings – Amount withdrawn from SA for investments* * Net SA savings withdrawn under CPF Investment Scheme (CPFIS) for investments that have not been completely disposed of |
| For recipients aged 55 years and above | Current Full Retirement Sum (FRS) – Retirement Account (RA) savings** ** RA savings refers to the cash set aside in the RA (excluding amounts such as interest earned, any government grants received) plus amounts withdrawn |
For more information on your SA/RA savings, please refer to CPF e-Services.
For the Years of Assessment 2021 and 2022, the applicable Full Retirement Sum amounts are as shown in the table below. For more information, please refer to CPF Board's website.
| Year of Assessment | Applicable Full Retirement Sum (FRS) Amount |
|---|---|
| 2021 (i.e. for CPF cash top-up made in 2020) | $181,000 |
| 2022 (i.e. for CPF cash top-up made in 2021) | $186,000 |
You may refer to this quick summary of CPF Cash Top-up Relief (PDF, 2MB).
Example 2: Amount of cash top-up does not exceed the limit on cash top-up amount for computing tax relief
Mr Tan is under 55 years old. He makes cash top-ups of $5,000 to his own CPF Special Account and $10,000 to his mother's CPF Retirement Account in 2021 to enjoy tax relief for Year of Assessment 2022.
For Year of Assessment 2022, Mr Tan may claim a total CPF Cash Top-up Relief of $12,000 ($5,000 + $7,000).
Example 3: Amount of cash top-ups for multiple family members do not exceed the limit on cash top-up for computing tax relief
Mr Tan wishes to make cash top-ups of $5,000 to both his father's and mother's CPF Retirement Account in 2021 to enjoy tax relief for Year of Assessment 2022.
| Top-up amount to father's CPF Retirement Account in 2021 | $5,000 |
| Top-up amount to mother's CPF Retirement Account in 2021 | $5,000 |
| Total CPF Cash Top-up Relief | $7,000 |
Note: The maximum CPF Cash Top-up Relief per Year of Assessment is capped at $7,000 in total for family members.
For Year of Assessment 2022, Mr Tan may claim a total CPF Cash Top-up Relief of $7,000.
Example 4: Amount of cash top-up exceeds the limit on cash top-up amount for computing tax relief
Mr Ong is under 55 years old. He wishes to top-up $7,000 in cash to his own CPF Special Account and his mother's CPF Retirement Account in 2021 to enjoy tax relief for Year of Assessment 2022. His total Special Account savings, including net Special Account savings withdrawn under CPFIS is $184,000, and his mother's Retirement Account savings is $186,000.
For cash top-ups to Mr Ong's own account:
| Full Retirement Sum (FRS) in 2021 | $186,000 |
| Total Special Account (SA) savings and Net SA savings withdrawn under CPFIS for investments that have not been completely disposed of | $184,000 |
| Amount of cash top-up allowed in 2021 (As Mr Ong is under 55 years old, the maximum top-up amount he can receive in his SA is an amount determined by "Current FRS – SA savings – Net SA savings withdrawn under CPFIS for investments that have not been completely disposed of") | $2,000 ($186,000 - $184,000) |
| CPF Cash Top-up Relief for Year of Assessment 2022 | $2,000 |
While Mr Ong made a cash top-up of $7,000 to his own CPF Special Account, only $2,000 will be eligible for tax relief in view of the limit on the amount of cash top-up that qualifies for tax relief.
For cash top-ups to his mother's account:
| Enhanced Retirement Sum in 2021 | $279,000 |
| Full Retirement Sum in 2021 | $186,000 |
| Mother's Retirement Account savings [Refers to the cash set aside in the Retirement Account (excluding amounts such as interest earned, any government grants received) plus the amounts withdrawn.] | $186,000 |
| Amount of cash top-up allowed in 2021 | $7,000 |
| CPF Cash Top-up Relief for Year of Assessment 2022 (mother's account) | $0 (No tax relief for cash top-up as the recipient's Retirement Account savings has already reached the Full Retirement Sum.) |
For Year of Assessment 2022, Mr Ong may claim a total CPF Cash Top-up Relief of$2,000.
As Mr Ong's mother is above 55 years old, cash top-up will be allowed up to the Enhanced Retirement Sum. However, no tax relief is given for cash top-up as her Retirement Account savings has already reached the Full Retirement Sum.
The maximum top-up amount a recipient aged 55 years and above can receive in his/her Retirement Account is determined by the "Current Enhanced Retirement Sum – Retirement Account savings". This is to allow such recipients to commit higher amounts to CPF LIFE (i.e. up to the Enhanced Retirement Sum), if they choose to receive higher payouts under CPF LIFE.
However, to keep tax benefits focused on supporting basic retirement needs, there is no tax relief for any amount of cash top-up which exceeds the limit on cash top-up amount for computing tax relief (i.e. Current Full Retirement Sum – Retirement Account savings).
Please refer to CPF Board's website for information on the Full Retirement Sum and Enhanced Retirement Sum.
How to claim
You do not need to claim the CPF Cash Top-up Relief as it is granted automatically to those who are eligible based on records sent to us by the CPF Board.
FAQs
I have received my tax bill for Year of Assessment 2021. The amount of CPF Cash Top-up Relief is incorrect. What should I do?
Please check through your eligibility for the CPF Cash Top-up Relief as follows:
- For contributions made in 2021, CPF Cash Top-up Relief will be granted in the Year of Assessment 2022.
- For cash top-up made to spouse's and/or sibling's CPF account, please check that their annual income does not exceed the threshold.
- You will not be eligible for the CPF Cash Top-up Relief if your CPF savings have reached the Full Retirement Sum (FRS).
You may also wish to seek advice from the CPF Board directly.
Can I obtain a refund of the cash top-ups that I have made, if the total amount of personal reliefs which I can claim is more than $80,000, even without any tax relief on cash top-ups I made?
There will be no refund for accepted cash top-up monies. As such, please take note of the overall personal income tax relief cap and evaluate whether you would benefit from the tax relief on your cash top-ups before you make an informed decision on whether to make a cash top-up.
My sibling has also topped up to the same family member. Will I still be eligible for the CPF Cash Top-up Relief?
Yes. Both you and your sibling will be eligible for the tax relief if the member receiving the top-up meets the qualifying criteria. The maximum cap of S$7,000 will be applied individually.
My employer has contributed to my Special/Retirement Account on my behalf. Will I be eligible for the relief?
Yes. However, do note that you will be subjected to tax on the contributions made by your employer as a source of employment income.
When is the latest I can make the cash top-up to be eligible for the tax relief?
Can I Put Money Into A Defined Contribution Fund In Order To Lower Myincome And Taxes?
Source: https://www.iras.gov.sg/taxes/individual-income-tax/employees/deductions-for-individuals/personal-reliefs-and-tax-rebates/cpf-cash-top-up-relief
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