What is the amount I can contribute to SRS? Is there a limit?

You may contribute any amount to your SRS account up to your SRS contribution cap.

How is my SRS contribution cap determined?

Your SRS contribution cap is determined by multiplying the appropriate SRS contribution rate by an absolute income base of 17 months multiplied by the prevailing CPF monthly salary ceiling.

SRS contribution rate

The SRS contribution rate for Singaporeans and Singapore Permanent Residents (SPRs) is 15% while the SRS contribution rate for foreigners is 35% in view of the fact that they do not enjoy tax relief on their CPF contributions. If you are a foreigner, you are required to give a written declaration of your foreign status for the calculation of your SRS contribution cap. You must make such a declaration whenever the SRS Operator calculates your SRS contribution cap.

Income base

For 2007, the absolute income base is $76,500 per annum (17 times the prevailing CPF monthly salary ceiling of $4,500).

Contribution cap

For 2007, the SRS contribution cap for a Singaporean or a Singapore Permanent Resident is $11,475, calculated as 15% x 17 x $4,500 CPF monthly salary ceiling.

The SRS contribution cap for a foreigner is $26,775, calculated as 35% x 17 x $4,500 CPF monthly salary ceiling.

I am currently contributing to the SRS at the rate of 35% as a Foreigner. Is my SRS contribution cap still valid if I obtain Singapore Permanent Resident (SPR) status in the latter part of the year?

No. You should contact the SRS operator to have your contribution cap recalculated.

Do I need to contribute regularly to SRS?

No. You may contribute to SRS at any time and as often as you wish on or before 31 December each year* but your total annual contributions cannot exceed the SRS contribution cap.

(* Please note however, that you may no longer contribute to SRS after you start withdrawing from your SRS account at or after your retirement, or after you reach the prevailing statutory retirement age, whichever is earlier. Please see Q.18.)

15.

What documents do I need to submit to the SRS operator when I wish to make SRS contributions?

If you are a Singaporean Citizen or Singapore Permanent Resident, no documents are needed.

If you are a foreigner, you are required to give a written declaration of your foreign status for the calculation of your SRS contribution cap. You must make such a declaration whenever the SRS Operator calculates your SRS contribution cap.

Can I make SRS contributions in the form of investments (i.e. transfer investments into my SRS account)?

No. All SRS contributions must be made in cash.

Under what situations am I not allowed to contribute to my SRS account?

You may no longer contribute to SRS after you start withdrawing from your SRS account at or after your retirement, or after you reach the prevailing statutory retirement age *, whichever is earlier.

(*This is determined by the date on which you attain the prevailing statutory retirement age.)

Why is there a cap on SRS contribution?

SRS is meant to help employees and self-employed to save part of their income, on top of their CPF contributions, for retirement, not give asset-rich or high-income individuals an undue tax advantage. There is hence a cap on the SRS contributions. The 15% cap for locals’ contributions was decided after a public consultation in the early part of year 2000. The absolute income base is similar to that for CPF contributions (i.e. capped at a salary of $4,500 per month from 1 January 2006).

If I have made a withdrawal from my SRS account, can I still make SRS contributions?

If you withdraw funds from your SRS account before retirement, you can still continue to contribute to SRS after the withdrawal.

However, if you start withdrawing from your SRS account at or after retirement, or after you reach the prevailing statutory retirement age *, whichever is earlier, you may no longer contribute to SRS.

(*This is determined by the date on which you attain the prevailing statutory retirement age.)

Why can’t I contribute to SRS beyond the statutory retirement age?

In deciding the age limit for participation in the SRS, the Government has to weigh the desire of those who want to withdraw their SRS savings as early as possible with the tax benefits, against those who want to contribute to the SRS for as long as they wish.

A fair solution is to peg the age limit to the prevailing statutory retirement age *, currently 62. This means that beyond age 62, the SRS account will be closed to contributions but the SRS savings can be freely withdrawn without penalty, and the taxpayer will enjoy the concession of being taxed only on 50% of the sum withdrawn.

The date on which SRS participants can start withdrawing their SRS savings is also the date new contributions will stop. Otherwise there will be ''round-tripping'' simply for the purpose of gaining the tax benefits without subjecting the contributions to the investment risks which justify the 50% tax concession on sums withdrawn.

The age limit for participating in SRS will rise along with any rise in the statutory retirement age in the future.

(*This is determined by the date on which you attain the prevailing statutory retirement age.)

Note: There will be some changes with effect from 1 Oct 2008. Please refer to the MOF SRS website for more details.

If employees of a company want to contribute to SRS, can the company facilitate the contribution by deducting from their payroll and make payment to their SRS accounts? On the same note, these employees have payments made to them via cheques from the company. Are they able to deposit these cheques into their SRS accounts?

An employee may deposit his pay cheque into his SRS account, subject to the SRS contribution cap. An employee may also authorise his employer to deposit part of his salary into his SRS account (again subject to the SRS contribution cap), just as he may authorise his employer to deposit his salary into any bank account. However, direct employer's contribution to one's SRS account is strictly prohibited.

Since the Ministry says that an SRS contribution made on or before 31 December* would qualify for tax relief in the following Year of Assessment, can an SRS operator stop accepting an SRS contribution before 31 December?

The cut-off date for SRS contribution (at any SRS operator) is a commercial decision. SRS members should ask their SRS operator about the cut-off date for SRS contributions.

(*Except if you have started withdrawing from your SRS account at or after your retirement, or if you have reached the prevailing statutory retirement age, whichever is earlier. Please see Q.18.)

Can a retiree who is under the statutory retirement age of 62 years open an SRS account with the money that he has withdrawn from his CPF account?

Anybody can open an SRS account as long as he has not reached the statutory retirement age. However only those who earned employment income (excluding directors’ fees) and who were self employed in the preceding year are allowed to contribute to SRS in the current year.

If a person is a non-PR in 2001 but is a PR in 2002, what will be his SRS contribution cap in 2002?

If a person is a non-PR in 2001 but is a PR in 2002, his SRS contribution cap in 2002 should be computed at the rate of 15%, which is the rate applicable to a PR.

After the SRS operator has computed my SRS contribution cap for the year, is it mandatory for me to make a contribution up to the cap set?

You can contribute any amount up to your SRS contribution cap.