Every month, a chunk of your salary gets deposited into your CPF Medisave Account. If you’re self-employed, you can’t escape this either as you’re forced to make Medisave contributions every time tax season rolls around. There are no two ways around it—the government says you have to, and so it must be.
Ultimately, that cash in your Medisave account is your money. So it pays to know when you can use it and how, so you can squeeze as much utility as you can out of every cent you put in.Contents That means that if your salary is officially $4,500, $900 of that money will be deducted every month and deposited into your CPF accounts. Your take-home pay will thus be $3,600.
You are also entitled to late payment interest at a rate of 1.5% for every day after the end of the month your employer is late by. But guess what, Medisave contributions are compulsory so long as you earn more than $6,000 in a year .[[600+0.2000]x100/NTI 5.25% to 10.5 %As you can see, the Medisave contribution rates for self-employed persons earning $18,000 and above per year are the same as those for employees.
Your Medisave balance currently earns interest at a rate of 4% per annum. This is an extremely good rate, considering it is completely risk-free.What is the Medisave limit and what happens when you exceed it?So maybe you’ve got a huge income and actually want to deposit more money into your Medisave account.
The Basic Healthcare Sum is designed to be a ceiling rather than a floor, so it does not affect how much you can withdraw. Even if you don’t meet the Basic Healthcare Sum, you can still use Medisave for approved purposes, or withdraw your CPF RA savings when you reach the age of 55.What can you use Medisave for?So this is the question we all have on our lips.
HospitalisationMedisave can be used to pay medical bills, but the catch is that your condition must be serious enough to warrant a withdrawal. And hospitalisation is one indicator that you’re ill enough.There are several types of institutions you can make a withdrawal at, such as the following: You get to use up to $250 a day for daily hospital charges, including $30 for doctor’s daily attendance fees. You’re allowed to claim up to $5,000 a year for stays at community hospitals.
The amount you can claim for the surgical procedure depends on the type and complexity of the operation. This can range anywhere from $250 to $7,550. Be sure to ask your healthcare provider how much of the cost of any surgical procedure you’ll be able to pay for using Medisave.
Source: Education Headlines (educationheadlines.net)
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