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Topping Up To Medisave For More Tax Relief!

As your income gets higher, the tax bill starts becoming bigger.

Hence, tax relief ideas start to benefit you more. Do note also that the max tax personal relief cap is $80,000. 

Recent CPF changes

One key change from CPF rule changes announced in dec2021 is that From Jan 1, 2022, Voluntary Contributions to MediSave Account will only depend on the Basic Healthcare Sum (BHS). Previously, it also depended on the CPF Annual limit.


In addition, the Voluntary contribution to medisave account now shares the $8,000 limit for tax relief for voluntary contributions.


All in all, this means that everyone will be entitled to do TOP up on 1jan2022 because employers haven't paid CPF yet. 

Read Article: Are The CPF Rule Changes Good Or Not?

What is medisave Basic Healthcare Sum BHS?

The medisave basic healthcare sum (BHS) is $66,000 for year 2022 which is a $3,000 step up from 2021 BHS limit. Hence, there are opportunities for everyone to top up to Medisave For tax relief.

Once you have the BHS, any new medisave will flow to your SA and if that is also full, it will flow to your OA.


Hence, there isn't anybody with $100,000 in medisave simply because of BHS.

How much medisave can you top up?

If you hit the BHS of $63,000 in 2021, you may top up $3,000 to $66,000 due to the BHS limit increment.


However, if you employer has already contributed, you can top up only the remaining amount to $66,000 and not $3,000.


On the other hand, if your medisave is NOT near BHS yet, you may top up medisave with any amount up to the BHS. The tax relief is capped at $8,000 and this amount is shared with Retirement sum topping up RSTU that is to your CPFSA.

Once I've hit the BHS, when can I still top up to Medisave?

There are deductions to your medisave account.

These include careshield life and medishield life premium and each person's deduction period is different.


Simply check your CPF transaction history last year to know when is your premium deduction. These will be periods when your medisave will be again below BHS and opportunities to top up for tax relief.

How to top up to medisave?

Simply log in to your CPF.

Then go to e-cashier and choose contribute to my medisave account (tax deductible).

Transfer can be via a QR code and will be reflected into your CPF instantly.

Hope it helps and share with someone who wants to know more on tax deductions ideas!

Also check video below "SHOULD YOU TRANSFER OA TO SA"?

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://theastuteparent.com/josh-tan Practising financial planner with Promiseland Independent Pte Ltd. TJL100057681 EXPERIENCE: More than 14years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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