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Anonymous
Is the compulsory CPF contribution taxable?
E.g. Salary of $5000, 20% contribution = $1000. Is taxable income $60,000 ($5,000 12), or $48,000 ($4,000 12)?
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Hello, Compulsory CPF Contributions relating to employment are not taxable.
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Hariz Arthur Maloy
28 Mar 2021
Independent Financial Advisor at Promiseland Independent
CPF contribution is a tax deductible. So your chargeable income would be less CPF contribution or 48...
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@ sprunki phase 4 : contributions made by both the employee and employer are not taxable. The taxable income is calculated before CPF contributions are deducted.
Using your example:
Monthly Salary: $5,000 Employee CPF Contribution (20%): $1,000 Taxable Income Calculation: Annual Salary: $5,000 × 12 = $60,000 Taxable Income: $60,000 (since CPF contributions are not deducted from taxable income) Therefore, your taxable income would be $60,000. The CPF contribution does not reduce your taxable income.