Paying CPF contributions for self-employed vendors under Contribute-As-You-Earn
Contribute-As-You-Earn (CAYE) enables self-employed vendors to continue growing their MediSave as they earn. As a Corporate Service Buyer (CSB), you’ll need to deduct a portion of the service fee paid to the vendor and credit it into their MediSave Account.
Updates on 20 Apr 2021
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Help self-employed vendors build healthcare savings
Pilot programme for government agencies
All government agencies are required to implement CAYE for payment of service fees to self-employed vendors. Government agencies include ministries, departments, organs of state, and statutory boards.
How does the CAYE scheme work?
When your organisation engages the service of a self-employed vendor (i.e. freelancer, sole proprietor), you need to deduct a portion of their service fee and credit it into their MediSave Account before paying the remainder to their bank account.
This portion to be credited into their MediSave Account is the CAYE contribution required for the self-employed vendor. It is automatically calculated when you process their payment invoice.
Benefits of participating in CAYE
Once onboarded, your organisation can submit invoices for your self-employed vendors.
No computation required
CAYE contributions are automatically computed and deducted when you process the invoice.
Easy access to records
Payment records to self-employed vendors can be conveniently viewed and downloaded to facilitate finance reconciliations.
How to implement CAYE
Apply for access to CAYE digital services
Using CAYE digital services
To access CAYE digital services, your organisation’s Corppass Administrator will need to add and assign CAYE digital service ID via the Corppass website.
Complete and mail the GIRO Direct Debit Authorisation (GIRO DDA) form for processing, at least 1 month prior to the desired payment date as the bank may take up to 21 working days to process the DDA application. Once you have done so, please inform the CPF Board via email at firstname.lastname@example.org.
After we receive your GIRO DDA form, we will contact you to select one of two available CAYE payment modes.
All taxable payments to self-employed vendors are subject to CAYE contributions.
Service fees exempted from CAYE
Not all service fees are subject to CAYE deductions. The following are excluded:
Fees, remuneration or allowances payable to board directors
Payment to self-employed vendors via factoring companies, which are considered to be business-to-business transactions
Payments to a partnership
Payments to self-employed vendors providing their services as a collective
Honoraria paid to academia/experts with no invoices
Payments in foreign currency
Payments through a service intermediary platform used by the CSBs to engage services from self-employed vendors
Fees, remuneration or allowances paid to a Member of Parliament
Payments to self-employed vendors from public-private partnership projects
Reimbursement by the Government to a provider under a Government voucher programme
Reimbursements made to self-employed vendors for expenses
Jobs subcontracted by CSBs
Electronic invoices from self-employed vendors participating in CAYE are identifiable with a CAYE indicator. Your system will identify such invoices automatically.
You need to manually identify whether a hardcopy invoice is eligible for CAYE contributions. For sole proprietors, check the self-employed vendor's business type using their Unique Entity Number (UEN) through the Enterprise Data Hub (EDH). For freelancers, the invoice should reflect the NRIC used to transact with you.
For more details, you can check the EDH guide and Input list guide.