CPF Changes for the Self-Employed in 2003 and 2004 Changes To Tax Deduction Limit For The Self-employed Change In Maximum Medisave Contributions Payable for 2004 Request Your SingPass Online Now! Contact us   CPF Changes for the Self-Employed in 2003 and 2004   Due to the change in the CPF contribution rate in October 2003 and the lowering of the salary ceiling in January 2004, the tax deduction limit for 2003 and 2004 will be revised. The maximum amount of compulsory Medisave contributions payable for 2004 will also be lowered.   Changes To Tax Deduction Limit For The Self-employed   The self-employed currently enjoy tax relief on their compulsory and voluntary CPF contributions, based on their annual net trade income. The maximum tax relief has been $25,920, which was based on the employer and employee contribution rate and the salary ceiling [i.e. 36% x 12 months x $6,000 = $25,920]. With the CPF contribution rate cut from 36% to 33% on 1 October 2003, the tax relief limit on CPF contributions from self-employed persons will be adjusted to reflect this. The maximum tax relief for 2003 is $25,380 [i.e. 36% x 9 months x $6,000 + 33% x 3 months x $6,000]. The tax relief limit will also be lowered in 2004 to take into account the lower CPF salary ceiling for that year. The tax relief limits for 2003 and 2004 are as follows:   Tax relief limit Rationale Original Limit 36% x 12 x $6,000 = $25,920   1 Jan – 31 Dec 2003 36% x 9 x $6,000 + 33% x 3 x $6,000 = $25,380 The mandatory CPF contribution rate has been reduced from 36% to 33% on 1 Oct 2003. 1 Jan – 31 Dec 2004 33% x 12 x $5,500 = $21,780 The CPF salary ceiling will be reduced from $6,000 to $5,500 on 1 Jan 2004.   Change In Maximum Medisave Contributions Payable for 2004   The maximum amount of compulsory Medisave contributions payable is based on the contribution rate to the Medisave Account and the salary ceiling. As the salary ceiling will be lowered from the current $6,000 to $5,500 on 1 January 2004, the maximum Medisave contributions payable will be adjusted to reflect this. Please refer to the table below for the maximum Medisave contributions payable for 2003 and 2004. Period Age Below 35 years 35 to below 45years 45 years and above Jan - Dec 2003 6% x 12 x $6,000 = $4,320 7% x 12 x $6,000 = $5,040 8% x 12 x $6,000 = $5,760 Jan - Dec 2004 6% x 12 x $5,500 = $3,960 7% x 12 x $5,500 = $4,620 8% x 12 x $5,500 = $5,280   Example   Please see below for an example on how the maximum Medisave payable and tax relief limit will apply in 2003 and 2004.   Mr Lim, 28 years old Mr Wong, 50 years old Annual net trade income $25,000 $80,000 2003 Compulsory Medisave contributions 6% x $25,000 = $1,500 8% x $80,000 = $6,400 However the maximum amount of compulsory Medisave contributions for 2003 is $5,760 Tax relief limit (36% x 9/12 x $25,000) + (33% x 3/12 x $25,000) = $8,812.50 (36% x 9/12 x $80,000) + (33% x 3/12 x $80,000) = $28,200 However the maximum tax relief for 2003 is $25,380 2004 Compulsory Medisave contributions 6% x $25,000 = $1,500 8% x $80,000 = $6,400 However the maximum amount of compulsory Medisave contributions for 2004 is $5,280 Tax relief limit 33% x $25,000 = $8,250 33% x $80,000 = $26,400 However the maximum tax relief for 2004 is $21,780     Request Your SingPass Online Now!   Request your SingPass from the comfort of your home or office! SingPass stands for Singapore Personal Access, and is the online equivalent of your NRIC. It is an alphanumeric password of 8 to 24 characters, which allows you to transact with the Government online. You can apply for your SingPass online at the eCitizen website or the Central Provident Fund Board (CPFB) website . A new password will be mailed to you upon successful verification of your personal particulars. You can also check the status of your SingPass request online. The SingPass online request service is available to Singapore citizens and Permanent Residents, and Employment and Dependant pass holders. If you remember your CPF PAL PIN, you do not need to get a SingPass. Upon successful login to Government e-services using your CPF PAL PIN, you will be prompted to enter your preferred SingPass.     CONTACT US   Visit our Website: www.cpf.gov.sg for more information   or call the CPF Employer Call Centre : 1800-226 3877 (Code 2)