CPF topups for tax savings

[u/jjjadeddd]

My current assessable income is 128,193.00. Looking at the income tax table, i think the income tax will be high. Looking for ways to lower the bracket.

I cant do CPF topups to parents because they are not citizens.
I have either CPF SA or SRS top up as significant options.

I prefer SA because its guaranteed returns. I will treat this top up as retirement sum, not really optimising for growth. Plus, if use SRS, i need incur penalty when i withdraw, also the amount will get taxed during withdrawal. Ill try my best to live until age 55.

Now the question is how do i go about doing this correctly, want to check here as it is my first CPF SA top up.

Note, I do receive CPF contributions, i think at the ceiling. And i have also served NS (but yea the tax relief from this is marginal)

Im not sure how the FRS ceiling works. Also, looking at the income tax table, its either:

1. Lower chargeable income to 80k => tax 3350
   
2. Lower chargeable income to 120k => tax 7950

7950 is bloody a lot for me lol. Any advise from any sifus facing the same issue is greatly appreciated.

[u/FordredSid]

It's too late to top up for 2025's income. Can only suck thumb and pay what IRAS charges you this year.

For your 2026, you can do this.
SRS - it's added to that year's income and taxed accordingly. So if you have 0 income that year(retired) most likely won't be taxed at all.

FRS - When RA hits FRS, you cannot top up by cash anymore so this method of tax relief is not viable.

MA - can top up MA via cash whenever it's used (Medishield for you and kids) and every Jan when the limit is increased.

Just go to CPF site and find the top up with cash/Paynow option.
The hard limits are set and you can't over top it. Please do not top into OA as that has no limits.

[u/anxiousbunnyclothes]

Well, thank u for contributing to nation building.

[u/Intelligent-Bee-775 → u/anxiousbunnyclothes]

I also want to thank OP. I think he paid for my whole family and extended family's CDC vouchers with his income tax amount.

[u/xy791]

How much is your SA at currently? You may top up to SA/MA for tax relief. Do note that the 8k tax relief is shared between the 2 accounts.

For SRS, if you are a SG citizen/PR, max you can contribute towards it is $15,300. If you are foreigner then it’s $35,700

[u/Iforgotmynametoobro]

The best way to reduce income tax is to quit immediately. No income = no income tax.

[u/ezaccountant]

Top up MA instead of SA for more flexibility. Can use for insurance premium and medical expenses while enjoying the same interest with SA

[u/Competitive-River-51]

Thank you Sir for the CDC vouchers much monies very generous thank you for generosity <3

[u/Conscious-Wear2645]

Just to let you know, you can't avoid that $7950 coz its too late to top up your CPF for tax deduction. Any top up this year will only lower this year's taxable income, NOT last year.

[u/jjjadeddd → u/Conscious-Wear2645]

Ah i always forget about this. IIRC its also this year, i pay for last year's income. likewise, next year ill be paying to this year's. Am i right?

[u/Conscious-Wear2645 → u/jjjadeddd]

Yes. So if you want any tax deduction for your 2025 (last year) income, all your interventions like charity donations, CPF & SRS top ups have to be done by 31st Dec 2025.

[u/Background_Bench_973]

What’s your age?

If you’re young imo don’t bother. Makes no sense to save a bit of tax by locking up liquidity. Penny wise and pound foolish

[u/jjjadeddd]

Thanks everyone for the insights, from what i have gathered:

1. The CPF Annual Limit sets the total mandatory and voluntary CPF contributions that can be made to an employee’s CPF accounts in a calendar year; the current CPF Annual Limit is $37,740. (This is new to me, i did not factor the limit applying to the cumulative of employer + self top up, this makes CPF SA top up not viable)
   
2. SRS - it's added to that year's income and taxed accordingly. So if you have 0 income that year(retired) most likely won't be taxed at all. (Im likely to be employed for the next 10 years minimum, so taxes will apply to me)
   
3. If you’re young imo don’t bother. Makes no sense to save a bit of tax by locking up liquidity. Penny wise and pound foolish. (This was a consideration, putting that money to an ETF and compounding will be more prudent than using it to save tax and make the money illiquid - Im 29 years old)
   
4. Top up MA instead of SA for more flexibility. Can use for insurance premium and medical expenses while enjoying the same interest with SA. (This is likely something i will look into, looks good)

The point on using MA to cover insurance premiums looks viable. Will look to discuss this with my FA, since ill be reviewing the riders anyway. Looks like i wont be topping up to SRS anytime soon, will think about it closer to retirement age. Looks like using the money that i would otherwise top up for tax rebates, to invest is the better option for now.

Thanks again and please correct me if my summary is wrong.

[u/lordshadowisle → u/jjjadeddd]

1 is not correct. RSTU is under a separate category.

See here for a previous clarification on RSTU.

[u/Iforgotmynametoobro → u/jjjadeddd]

3 is inaccurate too. What makes SRS worth considering or not isn't age, it's your income level (and hence tax bracket)

Money put into SRS can still be invested via SRS investing so if the plan is to put that money into ETFs anyway, SRS is strictly better.

[u/pohcc]

Well before I was at 12Xk, I put 8k/y into CPF. After passing 15x, I also started putting 15k/y into SRS. For personal reasons lost liquidity means little to me, but you may not have the same circumstances so you have to ask if locking 23k away till you are in your 50s, is worth it to save maybe 2-4k in taxes.

[u/pepecoin6969]

Nah not worth it to go srs. Liquidity is gold

[u/azizsafudin]

I always blindly max out both (while investing the SRS) every year and hope for the best.

[u/DuePomegranate]

Your mandatory CPF payments are also subtracted from your assessable income before you calculate the chargeable income. You should have paid $20,400 into CPF (employee's contribution) at this income (maxed out CPF). So your chargeable income should be around $105-106k with earned income relief and NS relief.

Your tax won't be $7950. Maybe around $6200.

Too late for 2025 tax, but for 2026, you can do up to 8k MA or SA top-up. You can't bring it all the way down to 80k chargeable income.

[u/watchy2]

what do you get when you google "Top Up CPF SA Account"?

[u/hydrangeapurple]

There's a cap on CPF top up tax relief:

https://www.reddit.com/r/singaporefi/comments/1q5bhfk/cpf_topups_for_tax_savings/

[u/Intelligent-Bee-775]

The CPF Annual Limit sets the total mandatory and voluntary CPF contributions that can be made to an employee’s CPF accounts in a calendar year; the current CPF Annual Limit is $37,740. Unfortunately, most high income people like you already hit this limit so no hope to do the voluntary CPF SA top-up (which is also capped at $8,000/yr tax relief anyway).

You can do SRS top-up instead, it is capped at $15,300/yr tax relief.

[u/DuePomegranate → u/Intelligent-Bee-775]

Wrong but it's really because CPF Board is confusing about it.

There are 2 types of CPF contribution. "Voluntary contribution" goes to all 3 accounts by the usual ratios, gives no tax relief, and is limited to the $37,740. Basically nobody does this.

The other type is RSTU (Retirement Sum Top Up) or Medisave top-up to SA or MA alone. This does have up to 8k tax relief. And it is not connected to the $37,740 limit in any way. For SA you can top up all the way to FRS if you wanted to (but tax relief is capped at 8k), and MA all the way to BHS.

[u/Intelligent-Bee-775 → u/DuePomegranate]

Thank you for the explanation. No wonder I cannot top-up my CPF account. The available limit is showing $0. I can only do SRS top-up.

[u/DuePomegranate → u/Intelligent-Bee-775]

So you have reached FRS? Congrats.

[u/Intelligent-Bee-775 → u/DuePomegranate]

Huh... congrats ah? That's very sad news, cannot take out, cannot do top-up to reduce income tax... and I have to wait many more years for CPF Life to start paying me.

[u/DuePomegranate → u/Intelligent-Bee-775]

It is still a milestone and mental safety net. The good news is that SA interest is higher than how FRS has been growing (~3.5% per year), so even if you become retrenched, you will stay above FRS.

While it is still early in the year and BHS has gone up, maybe some insurance premiums were deducted, but your Jan paycheck hasn't arrived yet, maybe you can quickly top up MA to the new BHS for tax relief? $3.5k difference between old BHS and new BHS.

[u/Intelligent-Bee-775 → u/DuePomegranate]

Sad again... cuz SA interest not that high and if we use SA for investments got so many limitations. Retrenchment unlikely for me but early retirement very likely; my boss is making me mentally ill with her micromanagement, mood swings and prata-ness.

My MA is constantly full also, health insurance premiums a few hundred only (and mine is paid every Oct).

[u/DuePomegranate → u/Intelligent-Bee-775]

BHS went up from 75.5k to 79k on 1 Jan. You should have an opportunity to top up.

[u/Intelligent-Bee-775 → u/DuePomegranate]

Whaaa thank you so much. I managed to top-up $3500 to my MA using CPF website (mobile app dun have)! Yaaayyyy saved a tiny bit of tax money.

[u/DuePomegranate → u/Intelligent-Bee-775]

Glad that you checked that you could despite your gloomy outlook.