You will be able to tell whether your work makes you a self-employed person and what follows from that.
A friend tells you she has started doing wedding photography on weekends, on top of her office job. Someone else drives private hire in the evenings. A third left her agency job last year and now takes design projects from three clients. Ask any of them whether they are self-employed and you will probably get a shrug. It sounds like a label, but in CPF terms it is a status with rules attached, and the rules apply whether or not you know about them.
The CPF Board uses the term self-employed person for someone who earns income from their own trade, business, profession or vocation. The test is how you are engaged. An employee works under a contract of service: someone employs you, directs how you work and pays you a salary, and the employer pays CPF on your wages. A self-employed person works under a contract for service: a client pays you for work or results, and nobody pays CPF on that income for you.
Freelancers, sole proprietors, partners in a partnership, commission-based agents who are not employees, and many tutors, coaches, photographers and designers fall into this group. Ride-hail, taxi and delivery platform workers were treated as self-employed for a long time, and the Platform Workers Act has now changed parts of that, which lesson 3.3 covers. If you are unsure which side of the line your work sits on, the CPF Board and the Ministry of Manpower both publish guidance on employees and self-employed persons.
What you call yourself does not decide it, and neither does whether you have registered a business. A designer who has never registered anything with ACRA can still be a self-employed person, because the income comes from her own trade.
Many people are an employee in one job and self-employed in another. Your friend with the office job and the weekend photography is a good example. Her salary is employment income. Her employer deducts her share of CPF and pays its own share, and her housing and retirement savings grow every month without her doing anything. Her photography fees are self-employment income. Nobody deducts anything from them.
The two streams follow different CPF rules. The employment side runs through payroll. The self-employed side is assessed separately, once a year, from what she declares to IRAS. Treat them as two separate sets of money with two separate duties. A common mistake is to assume the CPF on your salary covers your side income as well. It does not.
As an employee, CPF is the savings plan you never had to think about. Each month, your contribution and your employer's go into your accounts, and part of that money builds towards a home and retirement.
As a self-employed person, that stops. The CPF Board does not collect contributions for your housing or retirement from your trade income. The only part that may be compulsory is MediSave, which pays for healthcare. Your other CPF accounts only grow if you choose to put money in, which is the subject of module 3. Plenty of freelancers discover years later that their CPF balances barely moved after they left their last job.
Whether you must contribute to MediSave depends on your net trade income for the year: your trade income after allowable business expenses, as lesson 2.2 explains. If your yearly net trade income is above a threshold set by the CPF Board, you have to contribute. Below it, you do not, although you can still contribute voluntarily.
The threshold can change, so check the current figure on the CPF Board website rather than relying on what a friend remembers, and check it again each year you file.
Your contribution is worked out from the net trade income you declare in your tax return, so tax and MediSave are linked. A freelancer who does not file, or files late, does not escape MediSave. It usually means the bill is worked out on an estimate, and module 4 shows why accurate filing is the cheaper route.
Here is how Mei, the designer from module 1, sorts her own year, with figures made up for the example. She earned S$61,600 from design clients, all invoiced by her directly. That is self-employment income. She also earned S$1,200 for teaching two weekend workshops at a design school, which paid her as a part-time employee and deducted CPF. That is employment income. And she received S$180 of interest on her savings, which is neither. She lists all three and marks them, which tells her exactly which income the MediSave rules apply to.
Your list will look different, and some items may be hard to place. A one-off payment from a friend's company, a referral fee, a prize from a design competition: write each down and note your best guess. Where you are genuinely unsure, mark it with a question for the CPF Board or IRAS, and keep going. Getting the main streams sorted is what matters now.
Take last year as your starting point and go through every source of money that came in, one line each, ready to mark.
List every source of income you had last year and mark each as employment, self-employment or something else.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).