If you’re self-employed in Singapore, you probably already know the hustle of managing your work, your invoices, your taxes… and yes, your MediSave contributions.
Mess up your MediSave and it’s not just a slap on the wrist, we’re talking fines, license renewal issues, and missed tax reliefs that could’ve saved you thousands.
In this post, you’ll learn:
- Who’s considered a self-employed person under CPF rules
- How much you actually need to contribute
- What MediSave can be used for
- The benefits you’re probably missing out on
And how to stay compliant with CPF rules (without draining your cash flow).
Who is considered a self-employed person under the CPF system?
If you work for yourself, chances are, you fall under the Self-Employed Scheme (SEP).
According to CPF’s definition, a self-employed person is someone who runs their own business or does freelance work, and earns money not as an employee, but from the sale of goods or services.
The key thing here?
You have the ability to make a business profit or a loss.
So, what kind of work counts?
Think along the lines of:
- Freelance writers, designers, or photographers
- Ride-hailing or delivery drivers
- Tutors or home-based bakers
- Property agents, insurance agents (with commission-based income)
- Sole proprietors or partners in a small business
Basically, if you issue invoices, manage your own clients, and aren’t drawing a fixed salary from an employer, you’re likely considered a self-employed person by the CPF Board.
That said, if you’re both employed and self-employed, your situation gets a little more complex.
For instance, you may be working a full-time job with CPF contributions, but also run a side hustle or freelance gig.
In that case, you’ll still need to contribute to MediSave based on the net trade income from your self-employed work.
And just to be clear, CPF contributions for the self-employed aren’t the same as what salaried employees get.
You don’t have to contribute to your Ordinary or Special Accounts unless you choose to.
But MediSave contributions are compulsory once your net trade income crosses $6,000 for the year.
What can MediSave be used for?
Here’s a quick breakdown of what MediSave can help cover:
1. Insurance premiums
You can use your MediSave savings to pay for:
- MediShield Life – the basic health insurance that covers big hospital bills and selected outpatient treatments
- Integrated Shield Plans – if you’ve upgraded your coverage with a private insurer
- ElderShield or CareShield Life, which provide long-term care payouts in the case of severe disability
2. Hospital stays and surgeries
Got to stay in the hospital?
MediSave can be used to pay for hospitalisation and day surgery costs for you or your approved dependants.
This includes things like wisdom tooth surgery or unexpected admissions, as long as it’s done at a MediSave-accredited facility.
3. Outpatient treatments especially if you have chronic conditions
Under the MediSave500 and MediSave700 schemes, you can claim for outpatient care such as:
- Treatments for chronic diseases (like diabetes or high blood pressure)
- Vaccinations
- Health screenings, e.g. mammograms and colon cancer tests
These schemes offer $500 to $700 a year in support, depending on whether your condition is simple or complex.
So if you’re dealing with long-term health issues, MediSave helps take a bit of the financial load off.
4. Long-term and home-based care
This part often gets overlooked, but MediSave can also help if you or a loved one needs:
- Palliative care in a hospice or at home
- Day rehabilitation services
- Home nursing care
There’s also MediSave Care, which allows monthly withdrawals (up to $200/month) if you’re severely disabled and need help with basic daily activities.
If you’re supporting elderly parents or dealing with long-term health issues yourself, these options can be a financial lifesaver.
Why does a self-employed person need to contribute to MediSave?
Under the Central Provident Fund (Self-Employed) Regulations, once your annual net trade income (after allowable business expenses, capital allowances, and trade losses) exceeds $6,000, you must contribute a percentage of that income to your MediSave Account.
It’s a legal requirement because MediSave forms the foundation of Singapore’s healthcare financing system.
And since you don’t have an employer chipping in to your CPF like salaried employees do, the government places the responsibility squarely on you to contribute, so you’re not left in a bind when medical costs come up.
The amount depends on your age and income level, and the CPF Board will calculate the exact figure after you file your income tax.
You’ll then receive a Notice of CPF Contributions for Self-employed Persons, and from there, you’ve got 30 days to make payment either in full or through an instalment plan via GIRO.
Failing to contribute? That’s where things get serious.
Not contributing is a breach of the CPF Act, and you could be fined up to $5,000, or even face 6 months in jail for a first offence.
Repeat it and the penalty doubles up to $10,000 or a 12-month jail term, or both.
Plus, non-payment can also affect your ability to renew business licences, especially if you’re registered with ACRA or LTA.
So not only does it affect your healthcare savings, it might also disrupt your ability to keep working.
How much do self-employed persons have to contribute to their Medisave?
This depends on 2 things: your age and your Net Trade Income (NTI).
Your NTI is basically what’s left after you take your total business income and deduct allowable business expenses, capital allowances, and any trade losses.
Once that’s calculated by IRAS when you file your taxes, CPF uses it to determine how much you need to contribute to your MediSave.
The higher your income and the older you are, the higher your MediSave contribution rate.
That’s because as you age, the assumption is that your medical needs (and costs) will probably increase, so you’ll need a bigger buffer.
To give you an idea of what this looks like, here are the 2024 MediSave contribution rates for self-employed persons:
(Source: IRAS MediSave Contribution Page)
These rates might change, so be sure to check the latest amounts.
Now, here’s the good news: you don’t need to manually work this out with a calculator and a headache.
The CPF Board provides a handy Self-Employed MediSave Contribution Calculator that’ll show you exactly how much you need to contribute based on your age and income.
When should self-employed individuals contribute to MediSave?
If you’re self-employed, your MediSave contributions don’t happen automatically you’ll need to trigger them yourself after doing one important thing:
File your income tax return.
Each year, when you declare your Net Trade Income (NTI) to IRAS either because you’ve been notified to, or because your income exceeds filing requirements, IRAS will assess your figures.
Once that’s done, your income details are passed to the CPF Board, who then work out how much you need to contribute.
How to make your MediSave contributions?
Step 1: Receive your notice
If your NTI is more than $6,000, the CPF Board will send you a Notice of CPF Contributions for Self-Employed Persons.
This notice spells out how much you need to contribute to your MediSave account, based on your age and income.
Step 2: Make payment
You’ve got 2 options:
- Pay the full amount upfront within 30 days of receiving the notice.
- Or, if the full payment is a stretch, you can opt for a GIRO instalment plan, which lets you make smaller monthly payments over a period of time.
The GIRO option is especially useful if your income fluctuates or if you’re still building up savings just make sure your account has enough to cover the deductions each month.
If you’re planning ahead, you can even contribute in advance for future work years, as long as your current MediSave is up to date.
Bottom line: Don’t wait.
Once you get your notice, set aside time to either pay it off or apply for GIRO.
Because if you miss the deadline, you could face fines and/or even delays in renewing your business licence.
What is the Contribute-As-You-Earn (CAYE) scheme?
If you’re a self-employed person working with government agencies, say, you take on projects for a ministry, you might’ve already come across the Contribute-As-You-Earn (CAYE) scheme.
This is a government initiative that helps you manage your MediSave obligations on the go, instead of waiting for tax season and getting hit with a big lump sum to pay.
How does it work?
Whenever you get paid for a job or project, a small portion of that payment is automatically set aside and sent to your MediSave account before the rest hits your bank account.
In other words, your MediSave contributions are made as you earn, not months later, which is great if you want to avoid a sudden cash crunch at the end of the year.
Key features
- Auto-enrolment: If your client (e.g. a government agency) uses CAYE, you’ll usually be enrolled automatically.
- Flexible contribution rates: You can adjust your contribution rate anytime through CPF’s portal, based on your cash flow.
- Auto payments: Once you’re in, the contributions are deducted automatically from each payment – no action needed from your side.
A couple of caveats to note
- CAYE doesn’t change your actual MediSave payable amount for the year.
- Which means, if you end up contributing less than required, you’ll still need to top up the shortfall.
- If you over-contribute, you may get a refund, though that depends on CPF’s policies at the time.
Think of CAYE as a helpful tool rather than a replacement for your usual obligations.
It works best if you have regular government-linked freelance work and want to avoid last-minute scrambling.
If you don’t fall into that category, or most of your clients are from the private sector, CAYE won’t apply but it’s still worth knowing about in case things change.
You can also apply this formula to calculate your CAYE contribution rate:
(Source: https://www.cpf.gov.sg/member/growing-your-savings/cpf-contributions/contribute-as-you-earn )
Benefits of contributing to your Medisave account if you’re a self-employed person
Access to tax reliefs
One of the biggest perks of contributing to your MediSave account is that you can enjoy tax reliefs on your contributions.
Here’s how it works:
When you contribute to your MediSave whether it’s your compulsory contribution or voluntary top-ups you can claim personal income tax relief.
For most people, this helps lower your taxable income, which means you’ll pay less tax at the end of the year.
But of course, there are some limits.
For 2025, your tax relief is capped at the lower of:
- 37% of your net trade income,
- The CPF annual limit of $37,740, or
- Your actual contribution amount for the previous year.
So, for example, if your NTI is $65,000 and you contributed $20,000 to your MediSave and other CPF accounts, you’ll only be able to claim relief on up to $24,050 (which is 37% of $65,000).
Just remember that the total personal income tax relief you can claim across all categories is capped at $80,000 per year.
And nope, there are no refunds for CPF contributions once they’re made so make sure your top-ups make sense for your income and cash flow before committing.
Still, if you’re looking for ways to optimise your tax bill legally, MediSave is one of the better tools available for self-employed folks.
Ensure healthcare preparedness over the long-term
As a self-employed person, you don’t get employer-sponsored health benefits. There’s no HR team handling your insurance or medical costs.
Which means it’s all on you.
That’s where your MediSave account comes in.
By contributing regularly, you’re building a dedicated pool of savings specifically for healthcare.
And the best part?
It’s not just for the short-term.
MediSave is designed to help cover medical costs well into your golden years, when those expenses start to pile up.
Think of it as your healthcare emergency fund, but one that earns interest (currently up to 4% per annum, with an extra 1% on the first $60,000 across your CPF accounts).
Not bad, especially when most regular bank accounts give you close to nothing.
It also works in tandem with MediShield Life, CareShield Life, and other approved insurance plans.
So when something big hits, like a surgery or a long hospital stay, MediSave steps in to reduce your out-of-pocket cost.
Access to government subsidies and schemes through MediSave
Here’s something many self-employed folks overlook: your MediSave account is the gateway to unlocking a bunch of government support schemes.
By staying up to date with your contributions, you get access to various subsidies, support programmes, and schemes that are designed to make healthcare more affordable, especially for those without employer support.
Some of these include:
- Workfare Income Supplement (WIS) – If your average monthly income is below $3,000, you could receive up to $4,900 a year in cash and CPF top-ups. But to qualify, your MediSave must be fully paid or on a GIRO plan.
- Subsidised outpatient treatment – Programmes like MediSave500/700 and Flexi-MediSave let you use your MediSave for chronic disease management, vaccinations, and screenings — all at lower cost, and without having to pay fully out-of-pocket.
- MediSave Care – for the severely disabled, this scheme allows monthly withdrawals of up to $200, helping cover home care or long-term support.
- Day rehabilitation, palliative, and nursing services – You’ll need an active MediSave account to tap into these, especially if you’re applying support for family members too.
Bottom line?
Making your MediSave contributions opens the door to practical help when you need it most.
And for self-employed individuals, that safety net can make a world of difference.
SEPs who are part of the Drive and Save (DAS) scheme can receive up to $20 monthly co-contribution.
If you’re a self-employed person in the point-to-point transport sector like a taxi driver or private hire driver the Drive and Save (DAS) scheme might already be on your radar.
Here’s how it works: when you make MediSave contributions, the government may give you a little boost in the form of monthly co-contributions of $20 per month.
It’s essentially a top-up to reward you for staying consistent with your MediSave savings.
Not bad, considering you’re already expected to contribute anyway.
But take note, this isn’t automatic for everyone.
You’ll need to be in the eligible group and actively contribute to MediSave to receive the support.
Earn interest
Currently, MediSave earns 4% per annum, which is way more than what most regular bank savings accounts offer (we’re talking 0.05% to 0.15%, if you’re lucky).
And on top of that, CPF gives you an extra 1% on the first $60,000 of your combined CPF balances, capped at $20,000 from your Ordinary Account.
If you’re 55 and above?
You get an additional 2% on the first $30,000, and another 1% on the next $30,000.
In other words, your MediSave funds are not just locked up, they’re growing quietly in the background compounding over time while staying earmarked for your healthcare needs.
Frequently Asked Questions
Can I claim tax relief for MediSave contributions?
Yes, you can claim tax relief for MediSave contributions if you’re eligible.
Tax relief for MediSave contributions is available to self-employed persons who make mandatory or voluntary contributions, provided your net trade income is above $6,000.
The tax relief you can claim is the lower of: 37% of your assessed income, the CPF annual limit ($37,740), or your actual contribution amount.
Just keep in mind that there’s also an overall personal income tax relief cap of $80,000, which includes all types of reliefs you may be claiming.
What happens to unused funds in my MediSave account?
Unused funds in your MediSave account will remain there and continue to earn interest currently up to 4% per annum, plus an additional 1% on the first $60,000 of your combined CPF balances.
The funds stay untouched until they’re needed for approved medical expenses, insurance premiums, or long-term care.
If you hit the Basic Healthcare Sum (BHS), any excess contributions will be redirected to your Special Account (if you’re under 55) or Retirement Account (if you’re 55 and above) so your money keeps working for your future, even if you don’t use it right away.
Conclusion
So, here’s what we’ve covered.
We talked about what MediSave is and how it works, especially if you’re self-employed.
You now know who qualifies as a self-employed person, what your MediSave contributions are used for, when to contribute, and even how schemes like CAYE and DAS can make things easier (and a bit more rewarding).
Plus, we broke down the benefits from tax reliefs and interest, to access to subsidies and long-term care support.
But as a self-employed person, there’s more to think about than just MediSave contributions. Here are some questions to ask yourself:
- Do you have healthcare savings should something happen to you?
- Are you covered for your hospitalisation bills?
- What about if you get into an accident?
- What if you get hit by a critical illness?
- What happens to your loved ones when you pass away?
Making sure you are fully covered is even more crucial for self-employed individuals than salaried employees – so be sure to take these into consideration.
If you’d like to speak with someone who can walk you through your situation, we’ve partnered with a team of trusted, licensed financial advisors who can help you with your healthcare planning.
From one self-employed individual to another.
References
- https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/tax-reliefs-rebates-and-deductions/tax-reliefs/compulsory-and-voluntary-medisave-contributions
- https://www.cpf.gov.sg/member/growing-your-savings/cpf-contributions/saving-as-a-self-employed-person
- https://www.3ecpa.com.sg/resources/human-resource-immigration/medisave-contribution-for-self-employed-individuals/
